Person:
Damania, Richard

Sustainable Development Practice Group, The World Bank

Fields of Specialization

Development Economics, Environmental Economics, Natural Resource Economics, Agricultural Economics, Water Economics, Game Theory

Last updated: November 29, 2023

Biography

Richard Damania is the Chief Economist of the Sustainable Development Practice Group. He has held several positions in the World Bank including as Senior Economic Advisor in the Water Practice, Lead Economist in the Africa Region’s Sustainable Development Department, in the South Asia and Latin America and Caribbean Regions of the World Bank. His work has spanned across multiple sectors and has helped the World Bank become an acknowledged thought-leader on matters relating to environment, water and the economy. Prior to joining the World Bank he held positions in academia and has published extensively with over 100 papers in scientific journals.

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Now showing 1 - 10 of 30

Detox Development: Repurposing Environmentally Harmful Subsidies
(Washington, DC : World Bank, 2023-06-15) Damania, Richard; Balseca, Esteban; de Fontaubert, Charlotte; Gill, Joshua; Kim, Kichan; Rentschler, Jun; Russ, Jason; Zaveri, Esha
Clean air, land, and oceans are critical for human health and nutrition and underpin much of the world’s economy. Yet they suffer from degradation, poor management, and overuse due to government subsidies. "Detox Development: Repurposing Environmentally Harmful Subsidies" examines the impact of subsidies on these foundational natural assets. Explicit and implicit subsidies—estimated to exceed US$7 trillion per year—not only promote inefficiencies but also cause much environmental harm. Poor air quality is responsible for approximately 1 in 5 deaths globally. And as the new analyses in this report show, a significant number of these deaths can be attributed to fossil fuel subsidies. Agriculture is the largest user of land worldwide, feeding the world and employing 1 billion people, including 78 percent of the world’s poor. But it is subsidized in ways that promote inefficiency, inequity, and unsustainability. Subsidies are shown to drive the deterioration of water quality and increase water scarcity by incentivizing overextraction. In addition, they are responsible for 14 percent of annual deforestation, incentivizing the production of crops that are cultivated near forests. These subsidies are also implicated in the spread of zoonotic and vector-borne diseases, especially malaria. Finally, oceans support the world’s fisheries and supply about 3 billion people with almost 20 percent of their protein intake from animals. Yet they are in a collective state of crisis, with more than 34 percent of fisheries overfished, exacerbated by open-access regimes and capacity-increasing subsidies. Although the literature on subsidies is large, this report fills significant knowledge gaps using new data and methods. In doing so, it enhances understanding of the scale and impact of subsidies and offers solutions to reform or repurpose them in efficient and equitable ways. The aim is to enhance understanding of the magnitude, consequences, and drivers of policy successes and failures in order to render reforms more achievable.
Quality Unknown: The Invisible Water Crisis
(Washington, DC: World Bank, 2019-08-20) Damania, Richard; Desbureaux, Sébastien; Rodella, Aude-Sophie; Russ, Jason; Zaveri, Esha
Water quantity—too much in the case of floods, or too little in the case of droughts—grabs public attention and the media spotlight. Water quality—being predominantly invisible and hard to detect—goes largely unnoticed. Quality Unknown: The Invisible Water Crisis presents new evidence and new data that call urgent attention to the hidden dangers lying beneath water’s surface. It shows how poor water quality stalls economic progress, stymies human potential, and reduces food production. Quality Unknown examines the effects of water quality on economic growth and finds upstream pollution lowers growth in downstream regions. It reveals that some of the most ubiquitous contaminants in water, such as nitrates and salt, have impacts that are larger, deeper, and wider than has been acknowledged. And it traces the damage to crop yields and the stark implications for food security in affected regions. An important step toward tackling the world’s water quality challenge is recognizing its scale. The world needs reliable, accurate, and comprehensive information so that policy makers can have new insights, decision making can be evidence based, and citizens can call for action. The report calls for a paradigm shift that emphasizes safer, and often more cost-effective remedies that prevent pollution by combining smarter policies with newer technologies. A key message of Quality Unknown is that such solutions exist and change is possible.
The Impact of Water Quality on GDP Growth: Evidence from Around the World
(World Bank, Washington, DC, 2019-12-10) Desbureaux, Sebastien; Damania, Richard; Rodella, Aude-Sophie; Russ, Jason; Zaveri, Esha
Declining water quality can impact the economy in various ways. Impacts can be found in the health sector, where labor productivity can be affected, in agriculture, where the quality and quantity of food produced can be reduced, and in tourism, real estate, aquaculture/fisheries and other sectors which rely on environmental quality and ecosystem services. Despite these well-known impacts, finding economy-wide affects of water quality on economic activity can be elusive. In this paper we attempt to fill this gap by using a conventional empirical approach in contemporary environmental economics and new data on economic activity and water quality for nineteen countries from 1990-2014. The authors find that when rivers become very heavily polluted, regions downstream see reductions in economic growth, losing between 0.8 and 2.0 percent of economic growth. These losses imply that in many places, the costs of environmental degradation are severely under-estimated and well above efficient levels.
Uncharted Waters: The New Economics of Water Scarcity and Variability
(World Bank, Washington, DC, 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
(Washington, DC: World Bank, 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.
Ebb and Flow, Volume 1: Water, Migration, and Development
(Washington, DC: World Bank, 2021-08-23) Zaveri, Esha; Russ, Jason; Khan, Amjad; Damania, Richard; Borgomeo, Edoardo
Migration shapes the lives of those who move and transforms the geographies and economies of their points of departure and destinations alike. The water sector, and the availability of water itself, implicitly and explicitly shape migration flows. Ebb and Flow, Volume 1. Water, Migration, and Development presents new global evidence to advance our understanding of how fluctuations in water availability, as induced by rainfall shocks, influence internal migration, and hence regional development. It finds that cumulative water deficits result in five times as much migration as water excess does. But there are important nuances in why and when these events lead to migration. Where there is extreme poverty and migration is costly, water deficits are more likely to trap people than induce them to migrate. Water shocks can also influence who migrates. Workers leaving regions because of water deficits are often less advantaged than typical migrants and bring with them lower skills, raising important implications for the migrants themselves and receiving regions. Cities are the destination of most internal migrants, but even here, water scarcity can haunt them. Water shortages in urban areas, which lead to so-called day zero events, can significantly slow urban growth and compound the vulnerability of migrants. No single policy can be completely effective at protecting people and their assets from water shocks. Instead, the report puts forth a menu of overlapping and complementary policy options that target both people and places to improve livelihoods and turn water-induced crises into opportunities for growth. A key message is that policies that focus on reducing the impacts of water shocks must be complemented by strategies that broaden opportunities and build the long-term resilience of communities. Doing so will give individuals more agency to determine the best outcome for themselves and to thrive wherever they may choose to locate.
Ebb and Flow, Volume 2: Water in the Shadow of Conflict in the Middle East and North Africa
(Washington, DC: World Bank, 2021-08-23) Borgomeo, Edoardo; Zaveri, Esha; Russ, Jason; Khan, Amjad; Damania, Richard
The Middle East and North Africa Region encapsulates many of the issues surrounding water and human mobility. It is the most water-scarce region in the world and is experiencing unprecedented levels of forced displacement. Ebb and Flow: Volume 2. Water in the Shadow of Conflict in the Middle East and North Africa examines the links between water risks (harmful outcomes related to water, from droughts and floods to lack of sanitation), conflict, and forced displacement. It aims to better explain how to address the vulnerabilities of forcibly displaced persons and their host communities, and to identify water policy and investment responses. Contrary to common belief, the report finds that the evidence linking water risks with conflict and forced displacement in the region is not unequivocal. Water risks are more frequently related to cooperation than to conflict at both domestic and international levels. But while conflict is not necessarily a consequence of water risks, the reverse is a real and concerning phenomenon: conflict amplifies water risks. Since 2011, there have been at least 180 instances of intentional targeting of water infrastructure in conflicts in Gaza, Libya, the Syrian Arab Republic, and the Republic of Yemen. Forcibly displaced persons and their host communities face myriad water risks. Access to safe drinking water is a daily struggle for millions of forcibly displaced Iraqis, Libyans, Palestinians, Syrians, Yemenis, and international migrants in the region, heightening public health risks. Tanker trucks often help fill the gap; however, significant issues of water quality, reliability, and affordability remain. Host communities also face localized declines in water availability and quality as well as unplanned burdens on water services following the arrival of forcibly displaced persons. The reality of protracted forced displacement requires a shift from humanitarian support toward a development approach for water security, including structured yet flexible planning to deliver water services and sustain water resources for forcibly displaced persons and their host communities.
Highways to Success or Byways to Waste: Estimating the Economic Benefits of Roads in Africa
(Washington, DC: World Bank; and Agence Française de Développement, 2015-10) Ali, Rubaba; Barra, A. Federico; Berg, Claudia; Damania, Richard; Nash, John; Russ, Jason
Roads are the arteries through which the world’s economies pulse. Roads connect sellers to markets, workers to jobs, students to education, and the sick to hospitals. Yet in much of the developing world—and particularly in Africa—adequate roads are lacking. Accordingly, investment in transportation remains a key strategy for development agencies. Roughly $6.8 billion per year is spent in Sub-Saharan Africa on paving roads, and the World Bank invests more on roads than on education, health, and social services combined. Despite the large sums spent on transportation, there have been no assessments to determine whether these significant investments help or hinder outcomes, and the methodologies for evaluating which road projects to fund or not to fund have been disjointed and unreliable. Highways to Success or Byways to Waste: Estimating the Economic Benefits of Roads in Africa hopes to establish a new methodology for prioritizing funding that can be applied to diverse scenarios, regions, and projects. This book demonstrates how modern econometrics and geospatial techniques can be combined to analyze the latest available geo-referenced datasets at the smallest possible scale to answer some of the most important questions in development. Aimed at researchers from across the spectrum of international development, this book seeks to be a reference guide for all who seek new tools and insights into the many issues, both technical and nontechnical, of this important field.
Is Natural Capital a Complement to Human Capital?: Evidence from 46 Countries
(World Bank, Washington, DC, 2023-11-29) Herrera Garcia , Luis Diego; Damania, Richard; Kim, Hyungju; Viotti, Leonardo; Zaveri, Esha; Onder, Stefanie; Pantoja, Chrissie
The environment has long been the foundation of human flourishing, but its continued degradation is threatening to reverse recent development gains, especially in human health. This paper analyzes the possible complementarity between natural and human capital by linking high-resolution deforestation data with health outcomes for 0.7 million children across 46 countries. Forest loss is often a consequence of economic activities that may confer market and other benefits. At the same time, it can adversely affect the provision of forest ecosystem services and reduce the associated socioeconomic and environmental benefits for rural communities. The net effect is thus ambiguous. The paper focuses on the hydrological services provided by forests and exploits quasi-random variation in deforestation upstream to assess the impacts on waterborne disease outcomes for rural households downstream. The results not only indicate increases in diarrheal disease incidence among children under 5 years old, but also offer new evidence of early-life exposure to deforestation on childhood stunting, a well-known indicator of later-life productivity. A case study for Peru shows similar results for diarrheal disease, but a weaker effect of forest loss on stunting. The paper concludes that maintaining natural capital has the potential to generate meaningful improvements in long-run human capital.
Transport Infrastructure and Welfare: An Application to Nigeria
(World Bank, Washington, DC, 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.