Person:
Larson, Donald F.
Author Name Variants
Fields of Specialization
Rural Development Policy; Natural Resource Policy; Agricultural Productivity and Growth; Climate Change Policy and Markets; Commodity Markets and Risk
Degrees
External Links
Departments
Development Research Group, World Bank
Externally Hosted Work
Contact Information
Last updated
January 31, 2023
Biography
Donald F. Larson is a Senior Economist with the World Bank’s Development Research Group. He holds a B.A in economics from the College of William and Mary, an M.A. in economics from Virginia Tech, and a Ph.D. in Agricultural and Resource Economics from the University of Maryland.
With colleagues, he has authored or edited five books, including An African Green Revolution: Finding Ways to Boost Productivity on Small Farms, a forthcoming volume from Springer, and The Clean Development Mechanism: An Early History of Unanticipated Outcomes, a forthcoming volume from World Scientific. He has published numerous book chapters and journal articles, with an emphasis on agricultural productivity and growth; food and rural development policies; natural resource policies; the institutions and markets related to climate change; and the performance of commodity futures and risk markets.
During his time with the World Bank, Don has participated in policy discussion in Africa, Eastern Europe, Central Asia, East Asia, Latin America, and the Caribbean. He was a member of the team that launched the World Bank’s Prototype Carbon Fund.
Publication Search Results
1 - 6 of 6
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Publication
A Conceptual Model of Incomplete Markets and the Consequences for Technology Adoption Policies in Ethiopia
(World Bank, Washington, DC, 2013-10)In Africa, farmers have been reluctant to take up new varieties of staple crops developed to boost smallholder yields and rural incomes. Low fertilizer use is often mentioned as a proximate cause, but some believe the problem originates with incomplete input markets. As a remedy, African governments have introduced technology adoption programs with fertilizer subsidies as a core component. Still, the links between market performance and choices about using fertilizer are poorly articulated in empirical studies and policy discussions, making it difficult to judge whether the programs are expected to generate lasting benefits or to simply offset high fertilizer prices. This paper develops a conceptual model to show how choices made by agents supplying input services combine with household livelihood settings to generate heterogeneous decisions about fertilizer use. An applied model is estimated with data from a panel survey in rural Ethiopia. The results suggest that adverse market conditions limit the adoption of fertilizer-based technologies, especially among resource-poor households. Farmers appear to respond to market signals in the aggregate and this provides a pathway for subsidies to stimulate demand. However, the research suggests that lowering transaction costs, through investments in infrastructure and market institutions, can generate deeper effects by expanding the technologies available to farmers across all pricing outcomes. -
Publication
Aligning Climate Change Mitigation and Agricultural Policies in Eastern Europe and Central Asia
(World Bank, Washington, DC, 2012-06)Greenhouse gas emissions are largely determined by how energy is created and used, and policies designed to encourage mitigation efforts reflect this reality. However, an unintended consequence of an energy-focused strategy is that the set of policy instruments needed to tap mitigation opportunities in agriculture is incomplete. In particular, market-linked incentives to achieve mitigation targets are disconnected from efforts to better manage carbon sequestered in agricultural land. This is especially important for many countries in Eastern Europe and Central Asia where once-productive land has been degraded through poor agricultural practices. Often good agricultural policies and prudent natural resource management can compensate for missing links to mitigation incentives, but only partially. At the same time, two international project-based programs, Joint Implementation and the Clean Development Mechanism, have been used to finance other types of agricultural mitigation efforts worldwide. Even so, a review of projects suggests that few countries in Eastern Europe and Central Asia take full advantage of these financing paths. This paper discusses mitigation opportunities in the region, the reach of current mitigation incentives, and missed mitigation opportunities in agriculture. The paper concludes with a discussion of alternative policies designed to jointly promote mitigation and co-benefits for agriculture and the environment. -
Publication
The Cost Structure of the Clean Development Mechanism
(World Bank, Washington, DC, 2012-11)This paper examines the cost of producing emission reduction credits under the Clean Development Mechanism. Using project-specific data, cost functions are estimated using alternative functional forms. The results show that, in general, the distribution of projects in the pipeline does not correspond exclusively to the cost of generating anticipated credits. Rather, investment choices appear to be influenced by location and project type considerations in a way that is consistent with variable transaction costs and investor preferences among hosts and classes of projects. This implies that comparative advantage based on the marginal cost of abatement is only one of several factors driving Clean Development Mechanism investments. This is significant since much of the conceptual and applied numerical literature concerning greenhouse gas mitigation policies relies on presumptions about relative abatement costs. The authors also find that Clean Development Mechanism projects generally exhibit constant or increasing returns to scale. In contrast, they find variations among classes of projects concerning economies of time. -
Publication
Food Security and Storage in the Middle East and North Africa
(World Bank, Washington, DC, 2012-04)In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps. -
Publication
Incomplete Markets and Fertilizer Use : Evidence from Ethiopia
( 2010-03-01)While the economic returns to using chemical fertilizer in Africa can be large, application rates are low. This study explores whether this is due to missing and imperfect markets. Results based on a panel survey of Ethiopian farmers suggest that while fertilizer markets are not altogether missing in rural Ethiopia, high transport costs, unfavorable climate, price risk, and illiteracy present formidable hurdles to farmer participation. Moreover, the combination of factors that promote or impede effective fertilizer markets differs among locations, making it difficult to find a single production technology that is uniformly profitable -- perhaps explaining the inconsistency between field studies finding large returns to fertilizer use in Ethiopia and survey-based studies finding fertilizer use to be uneconomic. The results suggest that households with greater stores of wealth, human capital and authority can overcome these hurdles. The finding offers some encouragement, but also implies a self-enforcing link between low agricultural productivity and poverty, since low-asset households are less able to overcome these problems. The study suggests that the provision of extension services can be effective and that lowering transport costs can raise the intensity of fertilizer use by lowering the cost of fertilizer and boosting the farmgate value of output. -
Publication
Agriculture and the Clean Development Mechanism
( 2011-04-01)Many experts believe that low-cost mitigation opportunities in agriculture are abundant and comparable in scale to those found in the energy sector. They are mostly located in developing countries and have to do with how land is used. By investing in projects under the Clean Development Mechanism (CDM), countries can tap these opportunities to meet their own Kyoto Protocol obligations. The CDM has been successful in financing some types of agricultural projects, including projects that capture methane or use agricultural by-products as an energy source. But agricultural land-use projects are scarce under the CDM. This represents a missed opportunity to promote sustainable rural development since land-use projects that sequester carbon in soils can help reverse declining soil fertility, a root cause of stagnant agricultural productivity. This paper reviews the process leading to current CDM implementation rules and describes how the rules, in combination with challenging features of land-use projects, raise transaction costs and lower demand for land-use credits. Procedures by which developed countries assess their own mitigation performance are discussed as a way of redressing current constraints on CDM investments. Nevertheless, even with improvements to the CDM, an under-investment in agricultural land-use projects is likely, since there are hurdles to capturing associated ancillary benefits privately. Alternative approaches outside the CDM are discussed, including those that build on recent decisions taken by governments in Copenhagen and Cancun.