Person: Russ, Jason
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Transport Infrastructure and Welfare: An Application to Nigeria
2015-05, Ali, Rubaba, Barra, Alvaro Federico, Berg, Claudia N., Damania, Richard, Nash, John, Russ, Jason
Transport infrastructure is deemed to be central to development and consumes a large fraction of the development assistance envelope. Yet there is debate about the economic impact of road projects. This paper proposes an approach to assess the differential development impacts of alternative road construction and prioritize various proposals, using Nigeria as a case study. Recognizing that there is no perfect measure of economic well-being, a variety of outcome metrics are used, including crop revenue, livestock revenue, non-agricultural income, the probability of being multi-dimensionally poor, and local gross domestic product for Nigeria. Although the measure of transport is the most accurate possible, it is still endogenous because of the nonrandom placement of road infrastructure. This endogeneity is addressed using a seemingly novel instrumental variable termed the natural path: the time it would take to walk along the most logical route connecting two points without taking into account other, bias-causing economic benefits. Further, the analysis considers the potential endogeneity from nonrandom placement of households and markets through carefully chosen control variables. It finds that reducing transportation costs in Nigeria will increase crop revenue, non-agricultural income, the wealth index, and local gross domestic product. Livestock sales increase as well, although this finding is less robust. The probability of being multi-dimensionally poor will decrease. The results also cast light on income diversification and structural changes that may arise. These findings are robust to relaxing the exclusion restriction. The paper also demonstrates how to prioritize alternative road programs by comparing the expected development impacts of alternative New Partnership for Africas Development projects.
Uncharted Waters: The New Economics of Water Scarcity and Variability
2017-10-24, Damania, Richard, Desbureaux, Sébastien, Hyland, Marie, Islam, Asif, Rodella, Aude-Sophie, Russ, Jason, Zaveri, Esha
The 21st century will witness the collision of two powerful forces – burgeoning population growth, together with a changing climate. With population growth, water scarcity will proliferate to new areas across the globe. And with climate change, rainfall will become more fickle, with longer and deeper periods of droughts and deluges. This report presents new evidence to advance understanding on how rainfall shocks coupled with water scarcity, impacts farms, firms, and families. On farms, the largest consumers of water in the world, impacts are channeled from declining yields to changing landscapes. In cities, water extremes especially when combined with unreliable infrastructure can stall firm production, sales, and revenue. At the center of this are families, who feel the impacts of this uncertainty on their incomes, jobs, and long-term health and welfare. Although a rainfall shock may be fleeting, its consequences can become permanent and shape the destiny of those who experience it. Pursuing business as usual will lead many countries down a “parched path” where droughts shape destinies. Avoiding this misery in slow motion will call for fundamental changes to water policy around the globe. Building resilience to rainfall variability will require using different policy instruments to address the multifaceted nature of water. A key message of this report is that water has multiple economic attributes, each of which entail distinct policy responses. If water is not managed more prudently—from source, to tap, and back to source—the crises observed today will become the catastrophes of tomorrow.
Nature's Frontiers: Achieving Sustainability, Efficiency, and Prosperity with Natural Capital
2023-06-27, Damania, Richard, Polasky, Stephen, Ruckelshaus, Mary, Russ, Jason, Amann, Markus, Chaplin-Kramer, Rebecca, Gerber, James, Hawthorne, Peter, Heger, Martin Philipp, Mamun, Saleh, Ruta, Giovanni, Schmitt, Rafael, Smith, Jeffrey, Vogl, Adrian, Wagner, Fabian, Zaveri, Esha
The great expansion of economic activity since the end of World War II has caused an unprecedented rise in living standards, but it has also caused rapid changes in earth systems. Nearly all types of natural capital—the world’s stock of resources and services provided by nature—are in decline. Clean air, abundant and clean water, fertile soils, productive fisheries, dense forests, and healthy oceans are critical for healthy lives and healthy economies. Mounting pressures, however, suggest that the trend of declining natural capital may cast a long shadow into the future. "Nature’s Frontiers: Achieving Sustainability, Efficiency, and Prosperity with Natural Capital" presents a novel approach to address these foundational challenges of sustainability. A methodology combining innovative science, new data sources, and cutting-edge biophysical and economic models builds sustainable resource efficiency frontiers to assess how countries can sustainably use their natural capital more efficiently. The analysis provides recommendations on how countries can better use their natural capital to achieve their economic and environ mental goals. The report indicates that significant efficiency gaps exist in nearly every country. Closing these gaps can address many of the world’s pressing economic and environmental problems—economic productivity, health, food and water security, and climate change. Although the approach outlined in this report will entail demanding policy reforms, the costs of inaction will be far higher.
Framework for Conducting Benefit-Cost Analyses of Investments in Hydro-Meteorological Systems
2014-06, Malik, Arun S., Amacher, Gregory S., Russ, Jason, Esikuri, Enos E., Ashida Tao, Keiko
The whitepaper is organized as follows: section two provides an overview of the types of benefits associated with hydromet investments, the process by which the benefits are generated, and their expected development impacts; section three explains the rationale for public sector investment in hydromet systems and involvement by the World Bank; section four discusses the wide range of factors that influence the magnitude of benefits generated by hydromet systems, in particular the value of weather and climate forecasts. The discussion is supplemented by a stylized example presented in annex one; section five provides an overview of approaches that have been used to estimate the value of improved forecasts of routine climate to specific user groups or sectors of an economy; section six then turns to an overview of approaches that have been used to estimate the net benefits of hydromet investments at the country level. The primary benefits estimated by these approaches are those associated with improved forecasts of extreme meteorological events; section seven contains a discussion of the costs of hydromet investments, with particular attention given to the challenges faced in estimating these costs in developing countries; section eight lays out a framework for estimating the expected net benefits of hydromet investments at a country level. The framework builds on existing approaches and is designed to be used with data available from secondary sources. This section will be of central interest to those tasked with conducting economic evaluations of hydromet investments; section nine describes data that can be collected to conduct interim and ex-post evaluations of hydromet investments that supplement and refine ex-ante evaluations of these investments; and section ten offers conclusions and recommendations.
Economic Boom or Ecologic Doom?: Using Spatial Analysis to Reconcile Road Development with Forest Conservation
2016-05-20, Barra, Alvaro Federico, Burnouf, Mathilde, Damania, Richard, Russ, Jason
The natural endowment of the Democrat Republic of Congo, in the form of land, minerals, and forests, is unparalleled. The right mix of policies has the potential to unleash incentives that could transform the economy. However, transport infrastructure in the DRC is amongst the sparsest and most dilapidated in the world, and this lack of infrastructure is likely a significant constraint to growth. This work considerably advances the information that is available to infrastructure planners, and provides methodologies that could be used to make more informed decisions to identify trade-offs between economic growth and environmental endangerment. The approach draws from the state-of the art across a variety of disciplines – spatial (GIS) analysis, spatial econometrics, economic theory, and conservation biology – to create an approach that can guide the location and level of investments by estimating benefits and environmental costs at a highly disaggregated spatial scale. The analysis proceeds in four related phases that combine economic assessments with geospatial analysis. First transport costs are estimated using GIS techniques. A variety of econometric procedures are then used to determine the economic effects of changing transport costs. Second, highly disaggregated spatial data is used to estimate the effects of roads on forest cover, and the resulting biodiversity that would be at risk from local deforestation. Next the two spatial estimates are combined to simulate the effects of different policies. Finally this provides a series of maps that identify regions where there are large trade-offs between economic and ecological goals. Overall the results suggests that the siting of infrastructure needs to consider impacts at the very outset of the planning process. This report presents both new data and new techniques that can be used to identify areas of opportunity, risk, and potential for REDD+ financing. Such upstream planning has been rendered both feasible and cost effective with the availability of geo-referenced information on forest cover and economic data. This report provides the data and easily comprehensible maps for such an exercise.
Agricultural Technology Choice and Transport
2015-05, Ali, Rubaba, Barra, A. Federico, Berg, Claudia N., Damania, Richard, Nash, John D., Russ, Jason
This paper addresses an old and recurring theme in development economics: the slow adoption of new technologies by farmers in many developing countries. The paper explores a somewhat novel link to explain this puzzle -- the link between market access and the incentives to adopt a new technology when there are non-convexities. The paper develops a theoretical model to guide the empirical analysis, which uses spatially disaggregated agricultural production data from Spatial Production Allocation Model and Living Standards Measurement Study survey data for Nigeria. The model is used to estimate the impact of transport costs on crop production, the adoption of modern technologies, and the differential impact on returns of modern versus traditional farmers. To overcome the limitation of data availability on travel costs for much of Africa, road survey data are combined with geographic information road network data to generate the most thorough and accurate road network available. With these data and the Highway Development Management Model, minimum travel costs from each location to the market are computed. Consistent with the theory, analysis finds that transportation costs are critical in determining technology choices, with a greater responsiveness among farmers who adopt modern technologies, and at times a perverse (negative) response to lower transport costs among those who employ more traditional techniques. In sum, the paper presents compelling evidence that the constraints to the adoption of modern technologies and access to markets are interconnected, and so should be targeted jointly.