This paper argues that sharing rules have served to reduce the inefficiency caused by common pool externalities in many developing societies. To this end, a two-sector model of renewable resource use is employed where sharing rules are interpreted as implicit resource taxes. The model is applied to the island economy of Lofanga in the Kingdom of Tonga. The model generates a growth pattern which is consistent with the observed time paths of population and the resource stock. Cyclical fluctuations are weak even in the absence of resource taxation because the intrinsic growth rate of the resource is high.

For a closed economy with human-made capital, non-renewable resource depletion and (possibly) exogenous, hyperbolic technical progress as explicit-form inputs to a production function, there is a feasible development path that is ‘as if’ optimal with respect to hyperbolic utility discounting. On this path, typically, welfare-equivalent income > wealth-equivalent income > Sefton-Weale income > net national product, with possibly dramatic differences among these measures; and sustainable income can be greater than, equal to, or less than NNP. For low enough discounting, growing consumption is optimal even when technical progress is zero. A particular discount rate makes all income measures and consumption constant and (except net national product) equal; and zero technical progress then gives the Solow (1974) maximin as a special case. The optimal path is time-consistent because of the way the utility discount rate is chosen to depend on the economy's stocks, and hence on absolute time.

The Hartwick–Solow rule for sustainability requires that depletion of natural capital be offset by a compensating increase in other forms of capital capable of generating as much income as the natural capital they replace. Many countries have not been successful in transforming natural capital into other forms of wealth. This paper investigates the process of wealth transformation for Botswana, one of the most successful resource-rich countries. Using an expanded measure of wealth that includes manufactured capital, natural capital and net foreign financial assets, Botswana's per capita wealth has increased over the past 20 years. Government has recovered and reinvested rent. However, examination of the public sector capital budget reveals considerable unproductive investment. While correction for unproductive investments still indicates sustainable development, results suggest that aggregate indicators such as national wealth or genuine savings may be misleading without further attention to the process by which natural capital is transformed into other forms of wealth.

This paper addresses the existence of an Environmental Kuznets Curve for China, using a sample of 30 regions, covering the period 1982–1997. The types of pollution included are wastewater, waste gas, and solid waste. We consider the development of the sources of pollution in a pooled cross-section analysis with pollution in absolute levels, in per capita terms, and relative to real Gross Regional Product (GRP). At intermediate levels of GRP per capita, the increase of solid and gas emissions tends to decelerate, but it accelerates again at high levels of GRP per capita. Water pollution decreases with per capita GRP. We also predict future waste gas emissions.

This study compares the management performance of timber production among three management systems in Nepal: private forestry, community forestry with collective management, and community forestry with centralized management. While collective management relies entirely on community labor for the whole management, centralized management uses community labor for the protection of forests and hired labor for silvicultural operations, for example weeding, pruning, and thinning. We found that collective community management is less costly for the protection of planted trees but allocates less labor for the management of trees than private management. We also found that centralized management of natural forests leads to higher revenue and profit than collective management. These findings support the hypothesis that, while collective management is more efficient than private management for the protection of trees due to effective mutual supervision, profit-seeking private management or centralized management is more efficient than collective management for silvicultural operations due to superior work incentives. This study, however, failed to compare efficiency of private and centralized management.

The growing disenchantment with state management of natural resources has led to increasing reliance on co-management. This involves devolution of the rights to manage and control access to the resource from the state to the resource appropriators. Co-management has been introduced in many Third World countries with varying success. Co-management programmes have typically assumed that the resource community wants to conserve the resource and is prevented from doing so by their inability to form a collective choice arena. Hence such programmes have attempted to provide a collective choice arena. However, these attempts overlook the need to change the attitudes of resource users and create a demand for the resource regime. In this paper we have presented two case studies of Joint Forest Management in India to illustrate this point.