Title: Environmental management and economic policy in developing countries.

POPLINE Document Number: 075570

Author(s):

Warford JJ

Source citation:

In: Environmental management and economic development, edited by Gunter Schramm and Jeremy J. Warford. Baltimore, Maryland, Johns Hopkins University Press, 1989. :7-22.

Abstract:

Poor resource management has many causes in developing countries. The most critical problems are overgrazing, commercial logging and fuelwood harvesting, land clearance, deforestation, burning of crop residues and dung, soil erosion, sedimentation, flooding, and salinization. Although work is underway to remedy the damage, lack of adequate resources, political and financial vested interests, institutional overlaps, bureaucratic inefficiencies, and myopic decision makers all contribute to an inability to halt and repair the environmental problems. The most compelling constraint is the "sheer difficulty" of dealing with many small-scale natural resource activities contributing to the degradation. Piecemeal solutions, although important, ignore underlying causes in social, macroeconomic, and sector policies. Integration of environmental and natural resource management into economic and social policy is needed to supplement the project approach. Needs include a better understanding of the nature of the problem, the underlying causes, and the range of feasible policy interventions. Topics included for discussion include detailing the cost of natural resource degradation (national accounts, the marginal opportunity cost of resource depletion, and discount rates, irreversible effects, and future generations); describing the causes of natural resource degradation (improvement of data and understanding of behavioral factors); policy interventions (agricultural pricing policies, elimination of subsidies, externalities and common problems and natural events, and administrative costs of incentive systems); and the need for parallel actions (distribution of income and wealth, institutional structures, population, and the role of women). Economic analysis may prove useful in identifying policies that promote sustainable development. However, it is also necessary to improve and refine economic methodologies in a systematic and appropriate fashion, and continually remember that theories are limited. Dynamic models must replace static ones. Consequences may appear downstream or later in time. Value judgments about distributional effects and irreversible effects are necessary. Multidisciplinary approaches are required. National governments need to receive assistance with new technologies, to emphasize the impact on net national product, to estimate the economic and social consequences, to do resource planning carefully, to identify investment programs with broad impacts, to eliminate policies with a negative impact on the environment, to design and introduce interventions such as price, tax, and subsidy policies that have an indirect impact on resource use, and to continue efforts to combat underlying causes.

Keywords:

Developing Countries
Critique
Economic Development
Integrated Programs
Environmental Protection
Development Policy
Social Policy
Resource Allocation
Natural Resources
Income Distribution
Environmental Pollution
Agriculture
Population Pressure
Family Planning Policy
Female Role
Economic Factors
Programs
Organization and Administration
Environment
Policy
Financial Activities
Income
Socioeconomic Factors
Environmental Degradation
Macroeconomic Factors
Carrying Capacity
Family Planning
Population Policy
Social Behavior
Behavior