Wisdom Akpalu

Natural Resource use Conflict: Gold Mining in Tropical Rainforest in Ghana

Gold is frequently mined in rainforests that can provide either gold or forest benefits, but not both. This conflict in resource use occurs in Ghana, a developing country in the tropics where the capital needed for mining is obtained from foreign direct investment (FDI). We use a dynamic model to show that an ad valorem severance tax on gross revenue can be used to internalize environmental opportunity costs. The optimal tax must equal the ratio of marginal benefits from forest use to marginal benefits from gold extraction. Over time, this tax must change at a rate equal to the difference between the discount rate and the rate of change in the price of gold. Empirical results suggest that the 3 percent tax rate currently used in Ghana is too low to fully represent the external cost of extraction (i.e., lost forest benefits).

Fishing regulations, individual discount rate, and fisherman behaviour in a developing country fishery

Studies of compliance with fishing regulations have been based on fishery crimes where the offender faces a one-period decision problem of maximizing an expected utility. Moreover, the returns from the crimes are uncertain because the offender may lose them if caught. This paper extends these models by considering a fishery crime that generates a flow of returns until the offender is caught and then punished. Consequently, it incorporates into the existing model the influence of dynamic deterrence in which the discount rate affects violation levels. The predictions of the model are tested on data from an artisanal fishery in Ghana.

Can the restrictive harvest period policy conserve mopane worms in southern Africa? A bioeconomic modelling approach

Imbrasia Belina also known as the mopane worm, like other edible insects and caterpillars, is a vital source of protein to Southern African countries. The worms live and graze on mopane trees, which occupy agricultural land. With increasing commercialization of the worm, the management of the worm, which was hitherto organized as a common property resource, has degraded to a near open access. In this paper, a simple bio-economic modeling approach has been taken to show that, for some optimal land allocation, the restrictive period harvest season policy that is advocated by community leaders may not lead to sustainable harvesting of the worm.

Fisher skills and compliance with effort‐limiting fishing regulations in a developing country: The case of Ghana

Purpose - The formal model of economics of crime developed by Becker is based on the assumption that a miscreant knows with certainty the benefit that accrues to a criminal activity. The purpose of this paper is to relax this assumption and establish a link between technical efficiency and commission of fishery crimes in a developing country where fishing techniques are rudimentary making catch volumes uncertain. Design/methodology/approach - The paper extends the neoclassical model of crime developed by Becker to account for catch uncertainties. The extended model predicts that, in addition to the risk and severity of punishment, less skilful fishermen are more likely to violate effort-limiting fishing regulations. Primary data were obtained through a survey of 258 artisanal fishermen from the Central and Western Regions of Ghana to test the predictions of the model. Findings - The prediction that less skillful fishers are more likely to violate effort-limiting fishing regulations is confirmed by the data. Other factors that determined the rate of violation of the fishing regulation include the risk of detection, severity of punishment, rate of time preference, age of the fisher, perceived legitimacy of the regulation and respect for religious norms. Social implications - If returns to illegal activities are uncertain, policies that improve the efficiency of potential violators may decrease the rate or extent of violation. Moreover, minimizing overfishing will improve livelihood and reduce poverty among fishers. Originality/value - The paper makes a novel attempt at linking efficiency (or skills) to violation of regulations.

Global carbon markets: Opportunities for sub-Saharan Africa in agriculture and forestry

Developing countries, particularly those in sub-Saharan Africa (SSA), remain marginalized in global carbon markets despite significant mitigation opportunities in agriculture and forestry. The economic potential for mitigation through agriculture in the African region is estimated at 17 per cent of the total global mitigation potential for the sector. Similarly, Africas forestry potential is 23 per cent of the global total for the sector. To unleash the huge potential for mitigation in SSA, carbon markets should be expanded to include projects related to agriculture, forestry and other land uses (AFOLU). Given the important synergies between agricultural mitigation and adaptation, and the difficulties in reaching out to smallholder farmers and herders, as well as the increasing poverty and hunger in the region, this article suggests that not only should carbon markets be expanded to include more AFOLU project types, but carbon markets should also increase benefits directed at smallholder farmers. Domestic policies in SSA should also be reformed to increase the profitability of environmentally sustainable practices that generate income for small producers and create investment flows for rural communities. This review paper provides an overview of global carbon markets, focusing on opportunities for carbon trading in agriculture in SSA. Major constraints to the participation of SSA in global carbon markets are discussed, and options for integrating the region into global carbon markets are proposed.

Illegal fishing and catch potentials among small-scale fishers: application of an endogenous Switching regression model

Capture fish stocks are facing an increasing threat of extinction, partly due to the use of illegal fishing methods. In developing coastal countries – where fishing activities are the mainstay of the population along the coast – livelihoods are being directly threatened. Although a number of studies exist on fishing regulations and those who violate them, little has been done on the relationship between intrinsic catch potentials/fishing skills and illegal fishing behavior. Using data on violations of light attraction regulation among small-scale fishers in Ghana, our results show that the risk of punishment, the amount of fishing experience, the skippers age, and religious norms all influence the decision to violate fishing regulations. Most importantly, we found that violators and non-violators have different fishing skills. Consequently, policies targeting illegal fishing must focus on equalizing efficiency and/or fishing skills among the fishermen as well as on traditional variables that influence violation decisions.

Bioeconomic model of spatial fishery management in developing countries

Fishers in developing countries do not have the resources to acquire advanced technologies to exploit offshore fish stocks. As a result, the United Nations Convention on the Law of the Sea requires countries to sign partnership agreements with distant water fishing nations (DWFNs) to exploit offshore stocks. However, for migratory stocks, the offshore may serve as a natural marine reserve (i.e., a source) to the inshore (i.e., sink); hence these partnership agreements generate spatial externality. In this paper, we present a bioeconomic model in which a social planner uses a landing tax (ad valorem tax) to internalize this spatial externality. We found that the tax must reflect the biological connectivity between the two patches, intrinsic growth rate, the price of fish, cost per unit effort and social discount rate. The results are empirically illustrated using data on Ghana.

Climate variability and maize yield in the Limpopo region of South Africa: Results from GME and MELE methods

This paper investigates the impact of climate variability on maize yield in the Limpopo Basin of South Africa using the generalized maximum entropy (GME) estimator and maximum entropy leuven estimator (MELE). Precipitation and temperature were used as proxies for climate variability, which were combined with traditional input variables (i.e. labour, fertilizer, seed and irrigation). Based on pseudo R-squared, we found that the GME fits the data better than MELE. In addition, increased precipitation, increased temperature and irrigation have a positive impact on yield. Furthermore, the results of the GME show that the impact of precipitation on maize yield is weaker than that of temperature. However, the impact of climate variability on maize yield could be negative if it increases temperature marginally but reduces precipitation to a very large extent simultaneously. Moreover, the impact of irrigation on yield is positive and with a higher elasticity coefficient than that of precipitation, which supposes that the present system of irrigation could mitigate the impact of reduced precipitation on yield.

Socioeconomics of crime and discretionary punishment: the case of Ghana

Purpose – The purpose of this paper is to empirically verify whether “unfettered” judicial discretion in developing countries breeds corruption or not as judges could favour elites who have access to more money to steal or punish the poor who are petty-thieves rather harshly. Design/methodology/approach – The paper employs Suits index and regression analysis to investigate the relationship between the amount stolen and jail time. The index which is based on Lorenz curve is used to verify whether punishment for theft cases prosecuted in Ghana is anti-petty theft, neutral, or anti-serious theft. The regression analysis is used to explore the determinants of punishment per unit of the crime (i.e. amount stolen). Findings – The results strongly support the claim that disproportionate penalty is assigned to petty thefts committed mostly by the poor and non-elites. Moreover, the regression line which is almost a perfect fit indicates penalty per unit of the amount stolen decreases by 0.8 percent if the total amount stolen increases by 1 percent. Research limitations/implications – Due to poor records on criminals, there was very limited information on recidivism, hence this was not considered in the analysis. Second, there are much more theft convictions each year in Ghana than the sample represents. However, since the convicted cases used are random, the results are reliable enough. Social implications – Granting enormous discretionary powers to judges in developing countries may not guarantee retributive justice. Indeed the judiciary is likely to grant favours to elites who steal more and punish the poor who normally engage in petty theft disproportionately. Consequently, high discretionary powers to judges could potentially result in high blue and white collar crimes. Originality/value – The paper makes a novel attempt at employing Suits index and regression analysis to verify the feasibility of retributive justice in the presence of unlimited discretionary powers.

On the Economics of Rational Self-Medication

It has been established in the medical literature that self-medicating with imperfect information about either the use of a genuine or counterfeit drug or based on wrong self-diagnosis of ailment, which is predominant especially in developing countries, is a risky investment in health capital. This paper models the decision to self-medicate and the demand for self-medicated drugs. We suppose that investment in self-medication depends on the perception of its effectiveness. The results obtained show that the decision to self-medicate depends on the relative price and perceived effectiveness of self-medication, the elasticity of the shadow value of health with respect to the quantity of health capital, and the relative effectiveness of self-medication in reducing the unpredictable changes in health capital. Furthermore, if an individual self-medicates, self-medication becomes a normal good: it increases if income increases; and it obeys the law of demand (i.e. it increases if its price, relative to that of the risk-free medication, decreases). Moreover, we have shown that some optimum subsidy can discourage self-medication.