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- Volume 11, 2019
Annual Review of Resource Economics - Volume 11, 2019
Volume 11, 2019
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Agglomeration: Economic and Environmental Impacts
Vol. 11 (2019), pp. 419–438More LessUrbanization is taking place at an unprecedented pace and scale in China, India, and many other emerging economies. This will have profound impacts on the world economy and environment. This review provides a critical assessment of the current understanding of the intertwined relationships between agglomeration, economic growth, and environmental quality. We start by providing a brief overview of the extensive literature on the drivers of agglomeration and its economic impact. We then discuss the opposing views on the environmental impact of agglomeration and illustrate the trade-offs involved when choosing among different levels and forms of agglomeration. Finally, we discuss challenges for environmental management in a rapidly urbanizing economy and some lessons learned from history and experiences of urban development and their policy implications. The review concludes with a discussion of key knowledge gaps and future research directions.
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Impacts of Hosting Forced Migrants in Poor Countries
Vol. 11 (2019), pp. 439–459More LessMost of the world's displaced people are hosted in low-income countries. Focusing on evidence from poor countries, we review the literature on the economic consequences of hosting refugees or internally displaced people. In the short run, violence, environmental degradation, and disease propagation are major risks to the host populations. In the long run, infrastructure, trade, and labor markets are key channels that determine the impacts on host communities. These impacts can be positive or negative and often unequally distributed among different hosts. We discuss policy options for building resilience in the light of this evidence. Investments in road infrastructure and deepening trade with refugees’ countries of origin are strategies worth exploring for enhancing resilience and transitioning from humanitarian assistance toward development. Finally, we identify key knowledge gaps in this literature and formulate a research agenda for the near future.
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Migration Out of Rural Areas and Implications for Rural Livelihoods
Vol. 11 (2019), pp. 461–481More LessDespite the fact that migration out of agriculture has always been a part of the economic development process, policy makers have long feared that migration from rural areas reduces agricultural production. This article reviews the growing microeconomic literature with more credible statistical identification that evaluates the effects of migration on agricultural production and other outcomes among rural households. By and large, migration does not negatively affect agricultural production, as households shift on one of several margins to reduce the lost labor impact. Through migrant remittances, migration can lead to one of several different types of investment. When investment occurs, the type of investment depends upon relative local returns to investments in agriculture, nonagriculture, or human capital. Some innovative recent work also documents the role of migration in catalyzing technical change. Future policy related to rural out-migration should focus on enhancing its positive effects and mitigating any negative ones.
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Farmers’ Demand and the Traits and Diffusion of Agricultural Innovations in Developing Countries
Vol. 11 (2019), pp. 483–499More LessInternational agricultural research is often motivated by the potential benefits it could bring to smallholder farmers in developing countries. A recent experimental literature has emerged on why innovations resulting from such research, which often focuses on yield enhancement, fail to be adopted due to either external or internal constraints. This article reviews this literature, focusing on the traits of the different technologies and their complexity and distinguishing between yield-enhancing, variance-reducing, and water- or labor-reducing technologies. It also discusses how farmers’ reallocation of inputs and investments when external constraints are lifted suggests that they often do not seek to increase yield or input intensity. The article further reviews evidence indicating that a technology's potential as observed in agronomical trials is not necessarily a good predictor for smallholder farmers’ demands for the technology in real-life conditions. The last section derives conclusions for the research and policy agenda.
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Economics of Farm Input Subsidies in Africa
Vol. 11 (2019), pp. 501–522More LessFertilizer and other input subsidies have been prominent components of agricultural policies in many Asian and African countries since the 1960s. Their economic and political rationale is scrutinized with emphasis on the second generation of targeted input subsidy programs that were scaled up in Sub-Saharan Africa after 2005. The extent to which they fulfill the goal of being market smart is assessed after inspecting the potential for such subsidies in Sub-Saharan Africa. The new fertilizer subsidy programs do not live up to the market-smart principles and suffer from severe design and implementation failures. While a clear exit strategy was one of the key principles, this has been neglected, with the result that most current programs are more sticky than smart. They have only partially achieved the intended impacts and have resulted in a number of unintended negative impacts. Subsidy program redesign should start from a pilot stage testing basic mechanisms.
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