Uwe Deichmann

The Economics of Renewable Energy Expansion in Rural Sub-Saharan Africa

Accelerating development in Sub-Saharan Africa will require massive expansion of access to electricity -- currently reaching only about one-third of households. This paper explores how essential economic development might be reconciled with the need to keep carbon emissions in check. The authors develop a geographically explicit framework and use spatial modeling and cost estimates from recent engineering studies to determine where stand-alone renewable energy generation is a cost effective alternative to centralized grid supply. The results suggest that decentralized renewable energy will likely play an important role in expanding rural energy access. But it will be the lowest cost option for a minority of households in Africa, even when likely cost reductions over the next 20 years are considered. Decentralized renewables are competitive mostly in remote and rural areas, while grid connected supply dominates denser areas where the majority of households reside. These findings underscore the need to de-carbonize the fuel mix for centralized power generation as it expands in Africa.

Agglomeration, transport, and regional development in Indonesia

How effective are public interventions in addressing significant regional disparities in formal manufacturing concentration in a developing economy? The authors examine the aggregate and sectoral geographic concentration of manufacturing industries for Indonesia, and estimate the impact of factors influencing location choice at the firm level. They distinguish between natural advantage, including infrastructure endowments, wage rates, and natural resource endowments, and production externalities, arising from the co-location of firms in the same or complementary industries. The methodology pays special attention to empirically distinguishing the impact of measured production externalities from unobserved local characteristics. Depending on the sector, the authors find that a mix of both forms of regional advantage explains the geographic distribution of firms. Based on the estimated location choice model, they illustrate the potential impacts of policy interventions on manufacturing distribution by simulating the effectiveness of transport improvements on relocation of firms. Their findings suggest that improvements in transport infrastructure may only have limited effects in attracting industry to secondary industrial centers outside of Java, especially in sectors already established in leading regions. The findings underscore the challenges for addressing the industrial fortunes of lagging regions, either through local decentralized policy interventions or national policies focused on infrastructure development.

Natural disaster hotspots: case studies

These case studies complement the earlier groundbreaking work of Natural Disaster Hotspots: A Global Risk Analysis published in April 2005. Three case studies address specific hazards: landslides, storm surges and drought. An additional, three case studies address regional multi-hazard situations in Sri Lanka, the Tana River basin in Kenya, and the city of Caracas, Venezuela.

Tenure, Diversity, and Commitment: Community Participation for Urban Service Provision

What factors influence community participation in the delivery of urban services? In particular, does security of tenure enhance the probability of participation as it provides individuals with incentives to act collectively in pursuit of a common objective? In addition, are collective efforts less likely to succeed when there is a high degree of heterogeneity in culture or endowments among community members? We use household level survey data for Bangalore, India, to show that tenure security has a significant impact on the willingness of residents to participate even when neighbourhoods are diverse in terms of their cultural background and welfare status. Our findings suggest that participation is possible in heterogeneous communities when participation is a means to a common objective and not a goal in itself.

Urban and Regional Dynamics in Poland

In this exploration of urban and regional dynamics in Poland after the transition, the authors find that the degree of urbanization, and primacy remains low in Poland. The largest cities are not growing at the rate that would be expected if post-transition adjustments were operating freely. As a result, Poland is not fully realizing external economies from urban agglomeration. Internal migration decreased significantly in the 1990s, with rural-to-urban migration declining dramatically. Current population levels everywhere seem frozen at a degree of urbanization that is low by international standards. Migration levels do not respond to unemployment differentials, perhaps because Polands continuing housing shortage, deters migration. Housing construction, which was already low, fell by half in the 1990s, and has only recently begun a slight recovery. A significant number of mostly young, and educated temporary migrants leave Poland annually, many to find employment abroad. This may reduce pressure on the Polish labor market, but also keeps dynamic actors our of the domestic labor force, reducing growth in urban businesses and industry. Employment in manufacturing and agriculture is relatively concentrated, but specialization seems to have declined in recent years, perhaps reflecting barriers to labor mobility - which could limit growth. That employment in the manufacturing sector is quite concentrated, is to be expected in a formerly planned economy. But employment in the service sector, is also quite concentrated. A geographic divergence of service activities is not explained by dominant growth in specialized financial, and business services in the capital alone. Polands policymakers should find a way to provide housing, thereby reducing barriers to labor mobility, and growth.

Examining the Growth Patterns of Brazilian Cities

The share of urban population in Brazil increased from 58 to 80 percent between 1970 and 2000 and all net population growth over the next 30 years is predicted to be in cities. This paper explores population growth and its implications for economic dynamics and income generation among 123 urban agglomerations. Incomes are higher in larger agglomerations and in the South, but there is some indication of regional convergence with higher rates of income growth in poorer areas. In particular, agglomerations in the North and Central-West are growing faster than the more established urban centers in the South. Economic dynamics point to a process of increased diversification among larger cities, and greater specialization among medium-sized agglomerations. In bigger centers there is a trend toward deconcentration toward the periphery. The paper provides a simple analysis of correlates of labor supply, as measured by population growth and economic productivity, which is proxied by changes in per capita income.

Household Savings and Residential Mobility in Informal Settlements in Bhopal, India

Strategies to address the problem of informal settlements have focused on slum upgrading, sites-and-services programmes and tenure security. There has been less attention on what enables slum-dwellers to transition into the formal housing sector without direct intervention. This paper investigates residential mobility among slum-dwellers in Bhopal, India. One in five households succeeds in leaving a slum settlement and a major determinant is the ability to save on a regular basis. Due to limited outreach of institutional housing finance, most slum-dwellers rely solely on household savings for purchasing a house. These findings underscore the urgent need to improve savings instruments for slum-dwellers and to downmarket housing finance to reach the poorest residents of rapidly growing cities in developing countries.

Eurasian Cities: New Realities along the Silk Road

Eurasian cities, unique in the global spatial landscape, were part of the worlds largest experiment in urban development. The challenges they now face because of their history offer valuable lessons to urban planners and policy makers across the world from places that are still urbanizing to those already urbanized. More than three-quarters of the built environment in Eurasian cities was developed after 1945 in a centralized fashion. Central planners could implement whatever they considered good practice planning solutions, and Eurasias cities became their drawing boards. The central planners got a lot right easy access to public transportation, district heating networks, almost universal access to water systems, and socially integrated neighborhoods. At the same time, they failed to acknowledge the importance of markets and individual choice in shaping sustainable and congenial places for people to live in. From a spatial point of view, it became clear that many Eurasian cities were developed in places where they should not have been. To populate sparsely inhabited territory, Soviet planners pushed urban development toward the heart of Siberia. Many of the resulting cities had no rural hinterland to rely on for daily food needs and had to depend on subsidized goods and services. Many Eurasian cities face an overdeveloped public service infrastructure that is hard to maintain and upgrade. Facing an economic downturn in the 1990s and lacking experience in decentralized urban management, many local authorities struggled to run these services. Public transport ridership fell in most cities, with more people commuting in private vehicles. Recycling networks disappeared, and soaring consumption overwhelmed solid waste management systems. District heating systems became large energy sieves hard to run and maintain without subsidies. Plaguing water systems are large shares of nonrevenue water, and low tariffs do not ensure the cost recovery needed for upgrades and repairs. This book discusses all five of these issues rethinking, planning, connecting, greening, and financing in more detail. It seeks to analyze the key challenges created by central planning, outline how these challenges were addressed in the transition years, and identify some steps Eurasian cities should take to chart a sustainable development path for themselves. The book also shows how some of the most progressive cities in the region have been tackling these problems and, in doing so, shedding the last vestiges of the socialist economy.

Spatial Specialization and Farm-Nonfarm Linkages

Using individual level employment data from Bangladesh, this paper presents empirical evidence on the relative importance of farm and urban linkages for rural nonfarm employment. The econometric results indicate that high return wage work and self-employment in nonfarm activities cluster around major urban centers. The negative effects of isolation on high return wage work and on self-employment are magnified in locations with higher agricultural potential. The low return nonfarm activities respond primarily to local demand displaying no significant spatial variation. The empirical results highlight the need for improved connectivity of regions with higher agricultural potential to urban centers for nonfarm development in Bangladesh.

Measurement of Accessibility and Its Applications

Access to markets and social services is a major determinant of economic status and welfare. Measurement of access is therefore of great importance for policy analysis and planning of interventions. The objective of this article is to expose readers to a new way of measuring and visualising accessibility—a potential accessibility index—and its applications. This index gauges connectivity of a specific location to large cities while taking into account the population of the cities or other destinations of interest and the transportation facilities to reach them. The potential accessibility index is used in the empirical literature to test the hypotheses from the ‘New Economic Geography’ regarding the impact of market access on regional economic growth. Along with recent developments in poverty mapping, this index has also been used to investigate the spatial relationship between poverty and market access. Accessibility indexes are gradually gaining acknowledgement of policy makers and development practitioners as important monitoring instruments of development. For example, a rural access indicator is part of the results measurement system for the World Banks International Development Association (IDA) programmes.