The purpose of this paper is to analyse the effects of natural resources on income inequality conditional on economic complexity in 111 developed and developing countries from 1995 to 2016. The system-GMM results show that economic complexity reverses the positive effects of natural resource dependence on income inequality. Furthermore, results are robust to the distinction between dependence on point resources (fossil fuels, ores, and metals), dependence on diffuse resources (agricultural raw material), and resource abundance. Finally, there are significant differences between countries, depending on the level of ethnic fragmentation and democracy.

In any discussion of the great challenges facing humanity in addressing global environmental problems, a small number of topics automatically rise to the top: climate change, the loss of biodiversity, and the sustainability of the services ecosystems provide us. But no threats to human welfare are more urgent than those posed by infectious diseases; we suffer already the devastating consequences of the emergence of new diseases such as HIV, the reemergence of old ones such as tuberculosis, and simply the increasing toll of endemic diseases such as malaria. Non-human animals play fundamental roles in the spread of many of these diseases – as reservoirs, as vectors, and as cauldrons for the creation of new types. Land-use practices and environmental management both affect the persistence and spread of endemic diseases, such as malaria. Furthermore, as animal populations increase their ranges, due to climate change and human-facilitated alien introductions, the potential for disease spread also increases. These factors, together with the increasing mobility of the human population, conspire to make these environmental problems of great and immediate concern.

This paper addresses the design of corrective taxation schemes to manage multiple, interacting stocks. In the setting of irrigation-induced salinity, a collective groundwater stock aliments a set of individual rootzone salt stocks. It is shown that the policy maker does not need to base the tax rule on the individual salt stocks. Indeed, taxes based on the level of input and on the collective stock induce the agents to achieve the socially optimal irrigation path. An even simpler instrument is sufficient if the policy-maker's goal is to reach optimality at the steady state only.

In July 2014 a group of 14 countries (the ‘Davos Group’) launched negotiations on liberalizing trade in ‘green goods’ (also known as environmental goods – EGs), focusing on the elimination of tariffs for a list of 54 products. With an average tariff of 1.8 per cent, this group has little to offer even if the list were extended to the 411 products on the ‘WTO list’. Taking into account tariff dispersion, their tariff structure on EGs would be equivalent to a uniform tariff of 3.4 per cent, about half the uniform tariff-equivalent for non EGs products. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 per cent. Because of the strong complementarities between trade in EGs and trade in environmental services, these should also be brought into the negotiation in spite of the likely difficulties in reaching agreement on their scope.

This study applies the hedonic pricing model to property sales in the township areas in Windhoek, the capital city of Namibia, where municipal authorities have pursued a programme of selling plots of land to settlers in order to encourage them into a formalized economic situation. We find that, apart from house quality, access to the central business district, access to marketplaces and access to transportation, environmental quality also has a large impact on property prices. Properties located close to a garbage dump sell at considerable discounts, while properties located close to a combined conservation and recreation area sell at premium prices. The results thus suggest that the hedonic pricing method can be useful for studying townships in developing countries, and that this can help to clarify the importance of environmental factors which are otherwise frequently neglected in town planning for township settlements.

Small-scale fisheries (SSFs) are significant for poverty alleviation, but are threatened by over-exploitation and climate change effects such as drastic drops in regrowth rates. How will fishers adapt? To shed light on this, we ran a common-pool resource experiment with SSF fishers in Thailand. Our results show that groups confronted with a potential abrupt drop in the regrowth rate are more likely to form cooperative agreements compared to groups not confronted with such a drop, which theory cannot predict. However, groups that form cooperative agreements do not necessarily manage the resource efficiently; many groups under-exploit. Over-exploitation is driven by individual characteristics, e.g., if individuals can diversify income, and if they are born outside the village. We conclude that more systematic exploration of the role of socio-economic factors, and how these factors interact with ecological conditions facing fishers, are needed. Our work can be seen as one step in this direction.

This paper offers a quantitative assessment of the impacts of the COVID-19 pandemic-induced lockdown and government fiscal plan, containing ‘green’ elements on the economy and the environment of South Africa. The analysis uses a dynamic computable general equilibrium model operationalised using a social accounting matrix coupled with a greenhouse gas balance and emissions data. We find that while the economy is harshly impacted by the pandemic in the short term, the government fiscal package ameliorates and cushions the negative effects on poor households. Importantly, an adaptation of the fiscal package towards a ‘greener’ policy achieves the same economic outcome and reduces unemployment. Carbon dioxide emissions decrease in the short run due to economic slowdown. This improvement persists until 2030. These results can be used as decision support for policy makers on how to orient the post COVID-19 policies to be pro-poor and pro-environment, and thus, ‘build back better and fairer’.

This paper combines population and climate data to estimate the volume of migration induced by the drought events that have hit Mali since the late 1980s. The results show that droughts have had the effect of decreasing net migration rates in the affected localities. This is true for both men and women, regardless of their age. The effect of drought episodes, however, is found to differ according to localities and households’ capacity to adapt to climatic constraints: it fades in localities characterized by more diversified crops and in areas that receive more rainfall on average. Climate shocks also had an impact on international mobility: over the 2004–2009 period, around 2300 additional departures per year can be attributed to the droughts that hit Mali during the 2000s. We forecast that, under different climate scenarios and population growth projections, mobility induced by drought events will substantially grow in the next decades.

This special issue contributes to the natural resource economics literature by shining a light on the specific challenges and opportunities faced by developing countries that have recently become dependent on natural resources or are particularly exposed to climate change. It is composed of five studies on countries from all regions of the developing world, involving a variety of natural resources and policy issues. Four of the five studies illustrate how computable general equilibrium models are particularly well-suited, despite their relatively limited past use, to the analysis of natural resources. All five studies are led by researchers based in these countries, providing unique insights into the specific local context. The studies underscore the extreme vulnerability that the introduction of significant natural resource revenues and climate change can create in developing countries. They also show how the choice of appropriate policies to avoid the resource curse varies according to country-specific economic conditions.

Many developing countries lack universal sanitation services for residents. Years of inappropriate disposal of solid waste and wastewater have increased the potential for devastating environmental and health issues. An economic valuation of sanitation services may help in planning investment projects by demonstrating the benefits that households derive from having access to improved sanitation. We examine Guatemala as a case study and employ a series of hedonic models to estimate the value that households in Guatemala assign to the sanitation services of solid waste collection and connections to sewer infrastructure. Findings indicate that residents are willing to pay higher rents for both wastewater and solid waste removal. Policy implications are discussed.

Farm households in developing countries are generally credit constrained. This forces them to simultaneously take production and consumption decisions. In this paper, a two-period lifecycle model of the farm household is constructed and the household's investment response to changes in land and agricultural output prices are derived theoretically. It is shown that in the absence of credit markets household responses to exogenous price changes may differ from the predictions of cost–benefit analysis. Farm household responses are also derived for the case where price increases for land and agricultural output are accompanied by the introduction of a credit market. For this case the results show that farm household reactions are in accordance with predictions made by cost–benefit analysis. An empirical case study from Bénin underscores the relevance of considering access to credit in establishing whether investments in soil conservation are beneficial to farm households.

As different regions of the world integrate, many questions arise regarding the effect on the location of firms. A firm's decision to relocate operations when its home country integrates with another region is in general influenced by the relative marginal cost of production between the regions, the cost of relocation, the cost of exporting its good across borders, as well as the relative size of the two regions. Except for market size, these variables crucially depend upon the degree of economic integration, ranging from simple bilateral trade agreements, to agreements that make foreign direct investment easier and cheaper, to full economic integration that harmonizes policies across the regions. We develop a model in which we explore the possible forms of integration in the context of two illustrative applications: US–Mexico under NAFTA and Central and Eastern European countries and the European Union.

This paper aims to consider the meaning of the dismal theorem, as presented by Martin Weitzman [(2009) On modeling and interpreting the economics of catastrophic climate change. Review of Economics and Statistics91, 1–19]. The theorem states that a standard cost–benefit analysis breaks down if there is a possibility of catastrophes occurring. This result has a significant influence on debates regarding the economics of climate change. In this study, we present an intuitive similarity between the dismal theorem and the St. Petersburg paradox using a simple discrete probability distribution.

To improve wildlife conservation incentives in community-based natural resource management programs, a better understanding of rural communities' willingness to engage in wildlife conservation jobs is needed. We implement a discrete choice model explaining reservation wages for nine conservation jobs using contingent behavior data from rural Botswana residents. We present a model in which the conditional indirect utility function incorporates a more general value of time than has previously been used, and this specification outperforms the standard model. Sample estimates indicate that reservation wages are modestly higher for women than for men, and that residents have higher reservation wages for jobs requiring more exertion or involving more danger.