Sustainabel management of resources and1

presentations

1. Master
Sustainable Management of Resources and Cultural Heritage
for Local Development: Empowering Higher Education in Africa
A programmesupported by the Italian Higher Education with Africa Foundation and the Ministry of Higher Education and Research in Italy
Tiziana Pagnani, PhD, Università degli Studi di Napoli Federico II
Sustainable development and the Africa challenge

2. Who I am
MynameisTizianaPagnani.IamaPostdoctoralResearchFellowin
AgriculturalEconomicsattheUniversityofNaplesFedericoII(Italy),
DepartmentofAgriculturalSciencesandfromMarchIwillbePostdoctoral
FellowatthePerformance,InnovationandStrategicAnalysisforImpactof
theAllianceofBioversityInternational&CIAT.
MyacademicqualificationsincludeaPh.D.inAgriculturalEconomicsfrom
DepartmentofAgriculturalEconomicsofUniversityofNaples,FedericoII,a
M.Sc.inInternationalDevelopmentStudiesattheWageningenUniversity
andResearch,aM.Sc.inAgriculturalEconomicsandPolicyattheUniversity
ofNaples,FedericoIIandanAdvancedUniversityDegreeinEnvironmental
andDevelopmentEconomicsfromtheSchoolofEconomicsandBusiness
StudiesofRomaTreUniversity.
Ihaveanin-depthknowledgeindevelopmenteconomicsandexperiencein
econometricanalysis.
Mycurrentresearchinterestsarerelatedtonutrition-sensitiveagriculture
interventions,agrobiodiversityandintegratedpestdiseasemanagement.

3. 33
Development and the environment
➢Development andenvironmental problems areoften
connected
▪Naturalresourcesandtheenvironmentaredegraded
becausepeoplearepoor
▪Peoplearepoorbecausetheenvironmentandnatural
resourcesaredegraded
▪Peoplearepoorandtheenvironmentaredegradedbecause
ofpoor/insufficientinstitutions
▪Institutionsshapedbynaturalresourceabundance

4. 44
Development and the environment
➢Theoretical models to
▪formalize problem,
▪analyse comparative statics & dynamics,
▪derive testable hypotheses
➢Econometric approaches to quantify importance of causal
channels, e.g.
▪Instrumental Variable approach (IV)
▪Propensity score matching
▪Randomized control trials (RCTs)

5. 55
Organization of this lecture
▪The Tragedy of the Commons
▪The Resource Curse

6. The Tragedy of the
Commons

7. The Tragedy of the Commons
Thetragedyofthecommonsreferstoasituationinwhich
individualswithaccesstoasharedresourceactintheirown
interestand,indoingso,ultimatelydepletetheresource.
ThissocialdilemmawasintroducedbyWilliamForsterLloydin
1833

8. The Tragedy of the Commons
« Each man is locked into a system
that compels him to increase his
herd without limit -in a world that
is limited. Ruin is the destination
toward which all men rush, each
pursuing his own best interest in a
society that believes in the freedom
of the commons. Freedom in a
commons brings ruin to all»
(Hardin1968)
(Battersby 2017)

9. Some definitions…
Common poolresourcesdescribe
resourcesinwhichitisdifficulttolimit
accessandexcludeotherusersaltogether,
buteachindividualconsumptiveuse
reducestheresourceunitsthatare
availabletoothers(Ostrometal.1994).
ExamplesofCPRare:fisheries,forests,
irrigationsystems,groundwaterbasins,
pasturesandgrazingsystems.Excludable Non-Excludable
Rivalrous
Private Goods
Common-Pool
Resources
Non-
Rivalrous
Club Goods Public Goods

10. Hardin’s dangerous idea
•Tragedyoccursifcommonpoolresourcesarelefttoopenaccess
•Openaccessdescribesaninstitutionalarrangement(norules-everyonecan
participate)
•Hardinattributesthetragedytooverpopulation.
•TragedyoftheCommonshasbecomemainintellectualroadmapfordecades
foroveruseofcommonpoolresources

11. Assumptions (Stillman 1975)
Forthetragedytooccur,threeconditionsmustbefulfilled:
1.Theusersmustbeselfishandtheymustbeabletopursueprivategaineven
againstthebestinterestsofthecommunityasawhole.
2.Theenvironmentmustbelimited,andtheremustbearesourceuse-pattern
inwhichtherateofexploitationexceedsthenaturalrateofreplenishmentof
theresource.
3.Theresourcemustbecollectivelyownedbysociety(common-property)and
freelyopentoanyuser(open-access).

12. The Tragedy of the Commons
Grazing lands, Chopta, IndiaDegraded forest, Congo Overfishing, IndiaWater shortages, Bolivia

13. Modeling fisheries
The Gordon-Schaefer model

14. Overfishing and poverty
« It is hard to make a living as a fishermen
these days. There is no fish left. I only go if
there are no other possibilities to make
money»
« I used to catch very large fish. Now the
only thing I can possibly get is baby octopus.
I know it is bad. I know it is wrong. But I
have no choice»
(Zanzibar)

15. The World Commission on Environment
and Development (WCED)
«Humanity has the ability to make development
sustainable to ensure it meets the needs of the present
without compromising the ability of future generations
to meet their own needs»
«…our future is severely threatened, however, if we do
not focus on how to protect our common heritage »

16. Hardin’s solution
Cedeourfreedomstothestate,tobeboundby“mutualcoercionmutually
agreedupon”
Withouteffectiveinstitutionstolimitwhocanusediverseharvestingpractices,
highlyvalued,common-poolresourcesareoverharvestedanddestroyed(FAO
2005;Mullonetal.2005;MyersandWorm2003).
Lackinganyhigherauthoritytoreinintheselfishnessofnations,arewe
doomed?(Battersby2017)

17. Governing the Commons
Commonpoolresourcescanbegovernedinvariousways.
Threemaincategories:
▪PrivateProperty(Demsetz,1967;Raymond,2003),
▪GovernmentOwnership(Lovejoy,2006;Terborgh,1999,2000)
▪CommunityControl(VermillionandSagardoy,1999)

18. Private property
•Privateforests
•Righttousewater,harvestfish,etc.
•Typicallytradable
•Sometimeseventransferableintime(harvestmoretodayandless
tomorrow...)
•Canbeveryefficient
•Maindisadvantage:Howtodealwithinequality?

19. Government property
▪Positiveevaluationsbygovernmentofficialsandparkmanagersratherthanindependentstudies.
▪Hayes(2006)andGibsonetal.(2005)didnotfindanystatisticaldifferenceintheforest
conditionsbetweenprotectedareasandallotherforestsownedunderadiversityof
arrangements
▪Maindisadvantages:
•Conflictswithlocalcommunities
•Oftendifficultfinancialandlegalbasis
•Requiresstrongmonitoring
•Pronetocorruption
Tikal National Park | GuatemalaMahananda Wildlife Sanctuary | India

20. Community property
▪Directownership,governmentconcessions,orotherlong-termco-managementarrangements
▪Oftensuccessful,butnotalways!(Acheson2003;Andersson2004;BrayeKlepeis2005;Gibsonetal.
2000;NRC2002;Ostrom1990,2005)
▪Reliesontheexistenceofsocialcapitalandsharedunderstandingofownership,stewardship,
sustainability
▪Maindisadvantages:
•Littlecommunityinvolvement
•Mayleadtounequaloutcomesinfavorofrulingelite
•Limitedscopeto“fix”fromtheoutsideifthingsgowrong

21. Experiments, Cooperation & Commons
▪What makes a self-governing group effective?
▪Growing interest to understand behavior in the field
➢Cooperation as a left-hand side variable to understand which external
factors undermine or foster cooperation (as identified in Ostrom2009)
➢Cooperation as an explanatory (i.e. right hand side variable) to
understand decisions regarding investment, resource exploitation etc.

22. Governing
the
Commons

23. « There are no ‘one-size-fits-all’
solutions that can be applied to
all fisheries, all forests, or all
water systems »
(Grafton, 2000; Ostrom, 2007)

24. No Cure-Alls
•Themostimportantlessonthatneedswidedisseminationisthatsimple
panaceasofferedforsolvingproblemsrelatedtothecommonsmayworkin
somesettingsbutfailinothers.
•Simplesolutionsdonotexistformanagingcomplexecologies(Campbelletal.
2006;McPeaketal.2006).
•Ostromrecommended“polycentricgovernance”suggestingthatlayersof
governmentandcommunityoversightondifferentscalescandealwith
complexitybetterthanonecentralauthority.

25. Natural Resource Curse

26. How does a state's natural
resource wealth influence its
economic development?

27. Background
➢Expectation:Increasedendowmentsshouldpromoteeconomicdevelopment
andtranslateintomoreproduction.
➢Viewin1950s(Vines,Lewis,Sprengler):Developingcountriessufferfrom
imbalancebetweenlaborandcapital.
➢Resourceabundance:exportprimarycommoditiesorattractforeign
investment,collectrents+providepublicgoods.

28. Some quotes…
«The possession of a sizable and diversified natural resource base is a major advantage to any country
embarking on a period of rapid economic growth »(Ginsburg, 1950)
«… natural resource endowments would enable developing countries to make the transition from
underdevelopment to industrial ‘take of ’…»(Rostow, 1961)
«Natural resources could facilitate a country’s economic development by providing domestic
markets and investible funds »(Krueger, 1980)
Mainstream view: natural resources are a blessing!

29. Oooops….
▪Sachs&Warner(1995,1997,2001):Resourceabundantcountriesgrowslowerthan
resourcepoorones(casualinspectionandregressionanalysis)->resourcecurserather
thanablessing!
▪Ifresourceendowmentrisesbyonestandarddeviation->onepercentfallineconomic
growth…Aparadox!
▪Immenselypopularresearchtopic.Extremelyinfluential:pickedupbyWorldBank,IMF,
manyNGOs(e.g.SavetheChildren,Oxfam).Goodstory.
« …the conventional wisdom now is arguably the exact opposite of what it
was prior to the late 1980s »(Rosser, 2006)

30. Manifestations of the Curse
▪Economicperformance:Alargenumberofstudieshavepresentedevidence
tosuggestthatnaturalresourceabundance,oratleastanabundanceof
particularnaturalresources,reduceseconomicgrowth.
▪Civilwar:Theliteraturealsocontainsnumerousstudiesthatsuggestthat
naturalresourceabundanceisassociatedwithpoliticalviolenceandconflict.
▪Regimetype:Theresourcecurseliteraturealsocontainsanumberofstudies
thatsuggestthatnaturalresourceabundanceisassociatedwithlowlevelsof
democracy.

31. Economic performance
▪Wheeler(1984),GelbandAssociates(1988),SachsandWarner(1995),Weidmann(1999),Gylfasonetal.
(1999)andAuty(2001a)foundthatcountriesthatwererichinnaturalresourcesgrewmoreslowlythan
thosethatwerenotrichinnaturalresources.
▪Nankani(1979)foundthatmineraleconomiesperformedrelativelypoorlyintermsofagriculturalgrowth,
exportdiversification,andinflationcomparedtonon-mineraleconomiesandweremorelikelytobe
characterisedbypoorsavingsperformance,greatertechnologicalandwagedualism,highunemployment,
highexternalindebtedness,andhighexportearningsinstability.
▪AtkinsonandHamilton(2003)foundthatsavingsratesareonaveragelowerinresourceabundantcountries
thaninresourcepoorcountries.
▪Ross(2003a)foundthatoilwealthandnon-fuelmineralwealthareassociatedwithbadoutcomesforthe
poorintermsofpovertyandhumandevelopmentlevels.
▪Djellaetal.(2019)showtheextenttowhich,insixcountrieswithintheAfricaandMiddleEastareas,theoil
andgasresourcesrichness(oil-export)contributetothefooddependency(foodimport)andtothefood
insecurity(undernourishment).

32. Civil war
▪CollierandHoeffler(1998)foundthatnaturalresourceabundanceisastrongandsignificant
determinantoftheonsetofcivilwar,althoughtheyalsofoundthattherelationshipbetweenthese
variableswascurvilinear:initially,naturalresourcewealthincreasedtheriskofcivilwarbutaftera
certainlevelofexports,itreducedthisrisk.
▪Reynal-Querol(2002)foundthatnaturalresourceabundancewasanimportantvariableinexplaining
theincidenceofnon-ethniccivilwarsandotherformsofpoliticalviolence.
▪DoyleandSambanis(2000)foundthatnaturalresourcewealthwassignificantlyandnegatively
correlatedwiththesuccessofpeace-buildinginitiatives.
▪Fearon(2004)foundthatcountriesthatarerichincontrabandresourcessuchasopium,diamonds,or
cocatendtoexperiencelongercivilwarsandBallantine(2003)foundthatnaturalresourcesservedto
prolongcivilwarsinaselectionofresourcerichdevelopingcountries.
▪Ross(2004)andseveralobserversofAfrica’scivilwarshavesuggestedthatnaturalresourcesworsen
theintensityofcivilwars‘bycausingcombatantstofightforterritorythatwouldotherwisehavelittle
value’.

33. Regime type
▪Wantchekon(1999)foundthataonepercentincreaseinnaturalresourcedependenceincreased
theprobabilityofauthoritariangovernmentbynearly8percent.Healsofoundthatcountries
thatwererichinnaturalresourcesweremorelikelytoexperiencefailedorslowtransitionsto
democracy.
▪JensenandWantchekon(2004)presentedsimilarfindingsinrelationtoAfrica,concludingthat
resourceabundantcountriesinthisregionweremorelikelytobeauthoritarianandexperience
breakdownsindemocracyafterthedemocratictransition.
▪Ross(2001a)concludedthat‘astate’srelianceonoilormineralexportstendstomakeitless
democratic;thatthiseffectisnotcausedbyothertypesofprimaryexports;thatitisnotlimited
totheArabianpeninsula,totheMiddleEast,ortosub-SaharanAfrica;andthatitisnotlimitedto
smallstates’.

34. What causes the resource curse?
1.Economisticperspectives:economicmechanisms;
2.Behaviouralistperspectives:emotionalorirrationalbehaviouronthepartofpolitical
actors;
3.Rationalactorperspectives:utility-maximizationbehaviouronthepartofpolitical
actors;
4.State-centredperspectives:state’scapacitytopromoteeconomicdevelopment;
5.Socialcapitalperspectives:thatemphasisethedegreeofsocialcohesionincountries;
6.Historical-structuralistperspectives:resourcerentsbenefitcertainsocialgroupsin
society,affectingpowerdistribution;
7.Radicalperspective:forcedincorporationintotheglobalcapitalistsystem.

35. Institutions matter
LinksbetweenInstitutionsandtheResourceCurse:
1.InstitutionsasanIntermediateCausalLink
▪Auty(2001);Ishametal.(2005);Leite&Weidmann(1999)andNorman(2006)generallyagreethatthe
presenceofabundantnaturalresourcesleadstorentseekingbehaviorandcorruption,thereby
decreasingthequalityofgovernment,whichinturnnegativelyaffectseconomicperformance.
2.InstitutionshaveaNeutralRole
▪SachsandWarnerconcludethatinstitutionalqualitycannotexplaintheresourcecurse.
3.ResourcesInteractwiththeQualityofInstitutions
▪Mehlumetal.(2006)showthatincountrieswithgoodinstitutions,resourceabundanceattracts
entrepreneursintoproduction.Incountrieswithweakinstitutions,however,entrepreneursarediverted
awayfromproductionandintounproductiverentappropriation.
The effect of resource abundance on institutional quality is a challenging area of future research.

36. How can the resource curse be overcome?
1.Economicpolicychanges
2.Politicalandsocialchanges
3.Bypassthestate
4.Privatisethesectorsofnaturalresources
5.Interventionbyinternationalorganizations

37. Are natural resources bad for
development?

38. How to measure natural resource
abundance?
SachsandWarner(1995a,1997):Exportsofprimaryproducts/GDP.
Thismeasureof‘‘resourceintensity’’iseasilyavailableandhasbeenemployedbynumerous
researcherswhoconfirmedthenegativegrowtheffectsofnaturalresourcewealth.
Butiftheaimistoquantifynaturalresourceabundance,thenprimaryexportsseeman
unsatisfactorymeasurefortwomainreasons:
1.Theresourceexportvariableisnottheclosestpossibleapproximationofnaturalresource
wealth
2.Theresourceexportvariableisquitevolatile
Thecurseofnaturalresourceabundanceorthecurseofadependenceonnaturalresourceexports?

39. How to measure natural resource
abundance?
▪LedermannandMaloney(2003)findpositivegrowtheffectsusingtheshareofprimaryexportsin
totalexportsandprimaryexportsovertotallaborforce.
▪Davis(1995)usedtheshareofmineralexportsintotalmerchandiseexportsasoneofhisnatural
resourceproxies,showingapositiverelationshipwitheconomicdevelopment.
▪Gylfasonetal.(1999)usedlabourforceintheprimarysector,Auty(2001)usedcroplandperhead,
Stijns(2001)usedthelevelsofproductionandreservesratherthanexports,andHerb(2003)usedthe
percentageofrentsingovernmentrevenuesratherthanlevelsofnaturalresourceexports.
▪Neumayer(2004)takesgrowthingenuineincomeandfindsanegative,albeitweakened,resource
effect.
▪Davis(1995)andPapyrakisandGerlagh(2004),usingmineralproductionoverGDP,deliversless
clear-cutresults.

40. What type of natural
resources?
Fearon (2005),Fearon and Laitin(2003),Ross
(2003a),Sala-i-Martin and Subramanian (2003),
Ishamet al. (2002),De Soysa(2000) andLeiteand
Weidmann(1999) have pointed to ‘point source’
natural resources –for instance, oil, minerals, and
plantation crops –as being particularly problematic.
Ross (2003b) presents evidence to suggest that it is
‘lootable’ resources such as diamonds (particularly
alluvial diamonds) and drugs (particularly opium and
coca) rather than point source resources that are the
most likely to produce civil war.

41. Is this the only
truth?
Several countries that are
doing well today became
prosperous because of, rather
than in spite of, their natural
resources: Australia, Canada,
the US, New Zealand, Iceland
and the Scandinavian
countries, the diamond-rich
Botswana, Chile, Brazil, Peru,
Malaysia and Thailand.

42. Is this the only truth?
▪Davis(1995)hasshownthat,bycertaineconomicandsocialmeasures,mineraleconomies
outperformednon-mineraleconomiesbetween1970and1991.Thesemeasuresinclude
averageGNPpercapitaandimprovementinvarioussocialindicatorssuchasinfantmortality,
lifeexpectancy,caloriesupplypercapita,andtheUN’shumandevelopmentindex.
▪Smith(2004)foundthatoilwealthisassociatedwithlowerlevelsofcivilwarandanti-state
protest.
▪Sørlietal.(2005)foundthatoildependencehasnotexercisedasignificantinfluenceonthe
onsetofcivilwarintheMiddleEastinrecentdecades.
▪Humphreys(2005)haspresentedevidencetosuggestthatnaturalresourceconflictsare
morelikelytoendquickly.
▪Ballantine(2003)hassuggestedthatnaturalresourceabundancehas,insomecases,
reducedthenumberofbattle-relateddeathsduringcivilwar.

43. Correlation or Causality?
«Those arguing in favourof the notion of a resource curse have merely inferred
causality from the evidence of correlation. However, the direction of causation
may in fact run the other way.» (Rosser2006)
«…natural resource dependence may be a symptom of underdevelopment
rather than the cause » (Schrank2004)

44. 4444
Take Home Messages
▪The tragedy of the commons and the curse of natural resource abundance
has been a popular topic.
▪Institutions matter!
▪Majority of empirical work has used a measure of resource dependence as
a proxy for resource abundance.
▪The evidence is by no means conclusive.
▪There are exceptions.
▪No Cure-Alls

45. 4545
Main References
▪Hardin,G.(1968).Thetragedyofthecommons.Thepopulationproblemhasno
technicalsolution;itrequiresafundamentalextensioninmorality.Science
162(3859):1243–1248.Link
▪Ostrom,E.(1990).GoverningtheCommons:TheEvolutionofInstitutionsfor
CollectiveAction(CambridgeUnivPress,Cambridge,UK).
▪Ostrom,E.(2008).InstitutionsandtheEnvironment.Economicaffairs,28(3),24-
31.Link
▪Rosser,A.(2006).Thepoliticaleconomyoftheresourcecurse:Aliteraturesurvey.
IDSWorkingPaper,268.Link

46. Master
Sustainable Management of Resources and Cultural Heritage
for Local Development: Empowering Higher Education in Africa
A programmesupported by the Italian Higher Education with Africa Foundation and the Ministry of Higher Education and Research in Italy
Tiziana Pagnani, PhD, Università degli Studi di Napoli Federico II
[email protected]
Sustainable development and the Africa challenge