Damania, Richard

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 17

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.
The Macroeconomic Impact of Future Water Scarcity: An Assessment of Alternative Scenarios
(Elsevier, 2017-11) Roson, Roberto; Damania, Richard
In this paper we consider some of the economic implications of climate change scenarios as described in the Shared Socioeconomic Pathways (SSPs). By comparing potential water demand with estimates of (sustainable) water availability in different regions, we identify regions that are likely to be constrained in their future economic growth potential by the scarcity of water resources. We assess the macroeconomic impact of water scarcity under alternative allocation rules finding that, by assigning more water to sectors in which it has a higher value, shifting production to less water intensive sectors, and importing more water intensive goods, constrained regions can effectively neutralize these water related climate risks and adapt to a changing water environment. However, this adaptation effort is likely to imply some radical changes in water management policies.
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.
Evaluating Transport Infrastructure Projects in Low Data Environments: An Application to Nigeria
(Taylor and Francis, 2018) Russ, Jason; Damania, Richard; Barra, A. Federico; Nash, John
Transport infrastructure consumes a large fraction of the development assistance envelope. Yet procedures for evaluating transport infrastructure projects are typically ad hoc. This paper proposes an approach to assess the differential impacts of alternative investment proposals in data constrained environments where conducting reliable impact analyses is difficult. We first demonstrate a technique for estimating the cost of transporting products to markets. We then estimate the impact of improving the road network on economic activity. Finally, we perform simulations to demonstrate a methodology for prioritizing alternative investments. The analysis demonstrates a pragmatic, though rigorous, approach for assessing transport infrastructure benefits.
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.
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.
Agricultural Technology Choice and Transport
(World Bank, Washington, DC, 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.
Infrastructure in Conflict-Prone and Fragile Environments: Evidence from the Democratic Republic of Congo
(World Bank, Washington, DC, 2015-05) Ali, Rubaba; Barra, A. Federico; Berg, Claudia N.; Damania, Richard; Nash, John D.; Russ, Jason; Russ, Jason
In conflict-prone situations, access to markets is necessary to restore economic growth and generate the preconditions for peace and reconstruction. Hence, the rehabilitation of damaged transport infrastructure has emerged as an overarching investment priority among donors and governments. This paper brings together two distinct strands of literature on the effects of conflict on welfare and on the economic impact of transport infrastructure. The theoretical model explores how transport infrastructure affects conflict incidence and welfare when selection into rebel groups is endogenous. The implications of the model are tested with data from the Democratic Republic of Congo. The analysis addresses the problems of the endogeneity of transport costs and conflict using a novel set of instrumental variables. For transport costs, a new instrument is developed, the natural-historical path, which measures the most efficient travel route to a market, taking into account topography, land cover, and historical caravan routes. Recognizing the imprecision in measuring the geographic impacts of conflict, the analysis develops a spatial kernel density function to proxy for the incidence of conflict. To account for its endogeneity, it is instrumented with ethnic fractionalization and distance to the eastern border. A variety of indicators of well-being are used: a wealth index, a poverty index, and local gross domestic product. The results suggest that, in most situations, reducing transport costs has the expected beneficial impacts on all the measures of welfare. However, when there is intense conflict, improvements in infrastructure may not have the anticipated benefits. The results suggest the need for more nuanced strategies that take into account varying circumstances and consider actions that jointly target governance with construction activities.
Road Improvement and Deforestation in the Congo Basin Countries
(World Bank, Washington, DC, 2015-05) Wheeler, David; Damania, Richard
Road construction has often been viewed as the precursor to deforestation, especially in tropical forests. Traditional responses to such threats have been reactive, with attempts to mitigate impacts through physical measures, or the establishment of protected areas. These approaches often have not been entirely successful, especially in areas where economic potential is significant. This paper seeks to mitigate such conflicts by proposing a proactive approach to development planning and environmental policy. It develops a high-resolution spatial model of road improvement impacts that includes ecological risks and the economics of forest clearing. The approach is implemented by estimating the potential impact of road upgrading on forest clearing and biodiversity in eight Congo Basin countries. The paper demonstrates how the detailed analysis can identify areas of high ecological priority as well as areas at high risk of forest loss. The paper contributes to several aspects of the literature. First, it provides the most recent and reliable estimates of the drivers of deforestation in the Congo Basin, with the latest high-resolution satellite data on forest cover changes. Second, it presents novel estimates of biodiversity threats by creating an index that combines and synthesizes several measures of biodiversity loss and impacts. It then develops an empirical framework for estimating the ecological impacts of road improvement. Finally, the paper illustrates how the empirical framework can be used to preempt impacts and avoid potential ecological damage.