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In this paper, I propose three strategies to advance institutional analysis in resource and development econometrics: (1) recognition of institutional variables; (2) use of multilevel thinking and estimation; and (3) the adoption of causal graphs
. I illustrate each strategy with examples from three previously published studies: (a) biomass extraction from Ranthambhore National Park by Dayal (2006), (b) air pollution in Goa by Das et al. (2009), and (c) trade-offs and synergies between carbon storage and livelihood benefits from forest commons by Chhatre and Agrawal (2009). As I see it, while there is no explicit institutional content in studies (a) and (b), by recognizing caste as a social norm and the role of norms in household decisions it is possible to further integrate an institutional perspective into these studies. My analysis also demonstrates how multilevel thinking is intrinsic to institutional thinking. Since there can be data at different levels within a study, using study (c) where forests are nested in countries, I show how multilevel statistics can help unpack variation in the data at forest and country levels. Similarly, since causality is vital to policy though extremely difficult to establish with observational data, a phenomenon that leads to disagreements among scholars, using examples from the three studies I show how causal graphs can help separate the disagreements between scholars into disagreements about the underlying causal structure and the correspondence between an agreed to causal structure and the data on hand. The paper examines specific strategies to include institutional analysis in resource econometrics
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This study estimates the transaction costs entailed in maintaining Farmer Managed Irrigation Systems (FMIS) in Nepal based on a case study of 60 irrigation systems in the Kathmandu valley
. It analyzes the factors influencing transaction costs and compares these costs with the production cost in agriculture. The findings show that the main elements in transaction costs are time spent watching, waiting, and negotiating over water use. Time spent on transactions is relatively low for FMIS, amounting to 5 percent of the total time required for the production of crops. Transaction time costs are higher for households cultivating land downstream of a canal compared to households cultivating upstream. A comparison of transaction time costs in terms of crop seasons shows time costs for winter crops to be three times higher than that for summer crops. The total value of output per hectare is significantly affected by transaction costs, reliability of the irrigation facility, and infrastructure quality. However, free riders pose a problem for collective action. Controlling free-riding or deviant behavior would therefore improve institutional efficiency and reduce ex-post transaction costs
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This paper presents a synthesis of four case studies of watershed management experiences in the Philippines, primarily to provide insight on why watershed management approach has not gained wider recognition in the country despite being renowned internationally
. The paper starts by presenting a brief description for each case study involving the watersheds of Maasin, Magat, Manupali, and Balian sub-watershed to account for their critical role as water supply support systems to downstream communities. The paper also provides highlights on various initiatives undertaken by the Local Government Units, NGOs, private sector etc in their effort to protect these watersheds from environmental degradation.
The case studies focus on the elements that are present or absent in the various watersheds as they affect the implementation of watershed management approach. These elements are categorised into:
- legal and institutional infrastructure;
- social capital;
- financial/economic capital as well as technical and administrative capital of the watershed managers.
The results and recommendations of the case studies indicate that:
- water-based economic activities in the lowlands can only be sustained through good watershed management;
- the effective implementation of watershed management requires some level of financial capital, a community or group of communities with good enough level of intellectual and social capitals and the presence of a legal and institutional framework to support the watershed approach;
- the level of these various forms of capital varies across watershed, thereby leading to differences in the level of watershed management implementation as well;
- the sustained flow of high quality water that feeds the household water requirements, fuels the industries and power sector and irrigates farmlands in downstream communitiesc— bare all proofs that watershed protection is a valuable activity;
- understanding the link between watershed protection and water supply services by the watershed populace is of critical importance;
- the need of awareness of watershed protection and good water supply through information, education and communication (IEC) efforts;
- the need for payments of environmental services as previous initiatives undertaken by national forest protection programs and other community-based livelihood activities and reforestation projects are just short-lived management initiatives.
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Community forestry intervention in Nepal is essentially an institution building process that aims for a sustainable and equitable forest management system at the local level
. Operational Guidelines are available which guide the interventionists in terms of the required field procedure. The Operational Guidelines emphasise on 'Interest Group Meetings,' which is actually at the heart of the intervention process. Those meetings aim for genuine consensus building for attaining ultimate sustainability and equity objectives. This work intends to look at the possibilities of non-community forestry institutions that co-exist with the community forestry institutions the forestry interventions create and support. It is argued that a number of non-community forestry institutions might co-exist with the community forestry institutions. Their origin might range from indigenous through induced to sponsored. The thrust of those institutions might range from the production and financial concerns to self-help. Such institutions may be seen as a crystallised form of local 'interest groups' that tend to interact within themselves, between them and the larger community forestry system that tends to embrace them all. It is stressed that community forestry intervention in Nepal tends to overlook such prevailing institutions despite the fact that it itself is an institution building process. Potentiality, however, exists for acknowledging such institutions in a way that local interests are explored in a more holistic and pragmatic way. This essentially means initiating the modification of the existing extension process in a way that fully takes into account other prevailing institutions. The study is based on fieldwork in four community forestry user groups and the corresponding institutions in Gorkha, Tanahun, and Parbat districts during May-Jun 2002. Methodology consisted of participatory rural appraisal (PRA) and a series of informal discussions with concerned executive members, key persons and the rest of the members of the institution concerned. Oral history constituted bulk of the information source
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This case study examines the scaling-up experiences of two microfinance institutions: the Nirdhan Utthan Bank Limited (NUBL) in Nepal and the Self-Help Group (SHG)-Bank linkage programme of the National Agricultural Bank for Agriculture and Rural Development (NABARD) in India
. Both NUBL and NABARD groups use self-regulation (peer selection, peer monitoring and peer enforcement of contracts) as key to gaining access to services not otherwise available to them. The NABARD experience is government-led. NUBL, on the other hand, was established as an alternative to government action. In both cases, government policy in the form of mandatory "priority sector" credit played - and continues to play a critical role in facilitating expansion. The subsidy content (explicit and implicit) of both NUBL and the NABARD programme is quite high and continued expansion of both programmes is highly conditional on whether the policy regime of directed credit continues. Any change in this policy will deal a severe blow to both of these institutions
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Viet Nam has undergone a profound transformation in recent years and, as a result of a series of macroeconomic and institutional reforms since 1986, it has made substantial progress toward becoming a market economy
. As this transition continues, Viet Nam faces the challenge of formulating and implementing a growth strategy which is both economically and politically feasible. Critical to this growth strategy is the role of agriculture and, within agriculture, the development of an efficient rice marketing system.
The emergence of Viet Nam as a major rice exporter has raised a number of important policy questions.
- Will the country be able to continue its impressive growth?
- How far has Viet Nam moved along the path toward a market economy?
- What is the role of the government in the development of a rice market economy?
- What is the best way to promote food security?
The paper addresses these issues and report the results of a study conducted by IFPRI for the Asian Development Bank in collaboration with the Ministry of Agriculture and Rural Development of the Government of Viet Nam. The study is based on extensive data collection from marketing agents (farmers, traders, millers, state owned enterprises, and exporters) conducted during 1995 and 1996
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