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Self-help groups (SHGs) are the most common form of microfinance in India. The authors provide evidence that SHGs, composed of women only, undertake collective actions for the provision of public goods within village communities. Using a theoretical model, this paper shows that an elected official, whose aim is to maximize re-election chances, exerts higher effort in providing public goods when private citizens undertake collective action and coordinate their voluntary contributions towards the same goods. This effect occurs although government and private contributions are assumed to be substitutes in the technology of providing public goods. Using first-hand data on SHGs in India, the paper tests the prediction of the model and shows that, in response to collective action by SHGs, local authorities tackle a larger variety of public issues, and are more likely to tackle issues of interest to SHGs. The findings highlight how the social behavior of SHGs can influence the governance of rural Indian communities.

Policy makers in India recognize the importance o f well-functioning markets to agricultural growth, food security, and broad-based rural development. Markets facilitate the commercialization and diversification of farming, and they are essential for efficiently bringing food and agricultural products to domestic and international consumers. Well functioning domestic markets can reduce the cost of food and assure stability of supply, which as the recent global food crisis has highlighted, are key to assuring the food security of poor and non-poor households. They also open opportunities for greater value-addition and employment throughout the economy. The rapid growth of the Indian economy is bringing new forces for change in agricultural marketing and processing systems. Changes in consumer demand are fueled by rising incomes, increasing urbanization, a growing middle class demanding more diversified and higher-quality food, more working women demanding access to prepared or processed foods and more convenient shopping under one roof, and increased exposure to products through wider media penetration (domestic and international television, cable, and internet). These forces in turn drive changes in the structure of marketing and encourage agricultural diversification.

This paper examines poor households in the city of Mumbai and their exposure, vulnerability, and ability to respond to recurrent floods. The paper discusses policy implications for future adaptive capacity, resilience, and poverty alleviation. The study focuses particularly on the poor households, which tend to have greater exposure and vulnerability to floods and limited ability to respond given the constraints on physical and financial resources. The study seeks to understand the implications of the fact that poor households are more likely than non-poor households to be located in flood-prone areas. The study used the land use maps for the selected flood-prone areas to determine the extent and spread of poor and non-poor households and other types of assets and activities in areas with chronic and localized flooding. Primary data were obtained through detailed household surveys to understand the vulnerability and impacts of the extreme floods of July 2005, recurrent floods and the ability of households to respond and cope. The study examined the option of relocation to flood-free areas and identified factors that influence families’ decisions regarding relocation. The study finds that a significantly large proportion of poor households are located near areas with chronic and localized flooding. These households are either below the poverty line or have low incomes and reside in informal settlements or old and dilapidated structures. Future climate risks are likely to put greater burden on the poor and push them further into poverty unless well directed efforts are made to protect them.

Economic development critically involves diversification and structural transformation—that is, the continued, dynamic reallocation of resources from less productive to more productive sectors and activities. This paper documents that, over an extended period, developing Asia has on average been particularly successful in diversifying its exports, particularly in comparison with Sub-Saharan Africa. Much of the progress has occurred through diversification along the ‘extensive margin,’ that is, through entry into completely new products. In addition, developing Asia has on average benefited significantly from quality upgrading, helping it capitalize on already existing comparative advantages. Yet, agricultural and natural resources tend to have lower potential for quality upgrading than manufactures. Therefore, for lower-income “frontier” countries, diversification into products with longer “quality ladders” may be a necessary first step before large gains from quality improvement can be reaped.

This paper reviews Pakistan's agriculture performance and analyzes its agriculture and water policies. It discusses the nature of rural poverty and emphasizes the reasons why agricultural growth is a critical component to any pro-poor growth strategy for Pakistan. It supports these arguments by summarizing key results from recent empirical analysis where the relative benefits of agricultural versus non-agricultural led growth are examined. The results also provide an illustration of farm and non-farm linkages. It summarizes recent performance of the agriculture sector, and discusses key characteristics of its sluggish productivity growth. Three key issues related to increasing productivity are discussed: namely technology, water use and water management, and policy reforms related to markets and trade that can strengthen the enabling environment and contribute to the promotion of diversification towards high value agriculture.

This paper provides evidence on the effects of agricultural productivity on wage rates, labor supply to market oriented activities, and labor allocation between own farming and wage labor in agriculture. To guide the empirical work, this paper develops a general equilibrium model that underscores the role of reallocation of family labor engaged in the production of non-marketed services at home (`home production'). The model predicts positive effects of a favorable agricultural productivity shock on wages and income, but the effect on hired labor is ambiguous; it depends on the strength of reallocation of labor from home to market production by labor surplus and deficit households. Taking rainfall variations as a measure of shock to agricultural productivity, and using subdistrict level panel data from Bangladesh, this paper finds significant positive effects of a favorable rainfall shock on agricultural wages, labor supply to market work, and per capita household expenditure. The share of hired labor in contrast declines substantially in response to a favorable productivity shock, which is consistent with a case where labor-deficit households respond more than the labor-surplus ones in reallocating labor from home production.

This paper examines whether cooperative behavior by respondents measured as contributions in a one-shot public goods game correlates with reported pro-forest collective action behaviors. All the outcomes analyzed are costly in terms of time, land, or money. The study finds significant evidence that more cooperative individuals (or those who believe their group members will cooperate) engage in collective action behaviors that support common forests, once the analysis is adjusted for demographic factors, wealth, and location. Those who contribute more in the public goods experiment are found to be more likely to have planted trees in community forests during the previous month and to have invested in biogas. They also have planted more trees on their own farms and spent more time monitoring community forests. As cooperation appears to be highly conditional on beliefs about others’ cooperation, these results suggest that policies to support cooperation and strengthen local governance could be important for collective action and economic outcomes associated with forest resources. As forest management and quality in developing countries is particularly important for climate change policy, these results suggest that international efforts such as the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation should pay particular attention to supporting governance and cooperation at the local level.

This paper quantifies the contributions to poverty reduction observed in Sri Lanka between 2002 and 2012/13. The methods adopted for the analysis generate entire counterfactual distributions to account for the contributions of demographics, labor, and non-labor incomes in explaining poverty reduction. The findings show that the most important contributor to poverty reduction was growth in labor income, stemming from an increase in the returns to salaried nonfarm workers and higher returns to self-employed farm workers. Although some of this increase in earnings may point to improvements in productivity, defined as higher units of output per worker, some of it may simply reflect increases in food and commodity prices, which have increased the marginal revenue product of labor. To the extent that there have been no increases in the volumes being produced, the observed changes in poverty are vulnerable to reversals if commodity prices were to decline significantly. Finally, although private transfers (domestic and foreign) helped to reduce poverty over the period, public transfers were not as effective. In particular, the reduction in the real value of transfers of the Samurdhi program during 2002 to 2012/13 slowed down poverty reduction.

This policy paper focuses on the incentive framework for Pakistani agriculture, with emphasis on trade and price policies. It first presents a synthesis of major trends in the performance of the sector and analyzes Pakistan's extraordinarily complex, opaque and discretionary, and continually-changing trade regime. It presents a disaggregated analysis of the border measures for the selected products (trade and price interventions vary by product), and estimates the joint effect of trade and procurement policies on farm prices, captured by direct price comparison. It concludes by providing policy recommendations emphasizing on the revision of trade regime to eliminate quantitative restrictions and to modify tariffs in the direction of greater equality, a positive, moderate and uniform tariff on imports across the board as the only border measure for import competing products.

Nepal depends entirely on imports for meeting its demand for petroleum products, which account for the largest share in total import volume. Diesel is the main petroleum product consumed in the country and accounts for 38 percent of the total national CO2 emissions from fuel consumption. There is a general perception that the country would economically benefit if part of imported diesel is substituted with domestically produced jatropha-based biodiesel. This study finds that the economics of jatropha-based biodiesel depend on several factors, such as diesel price, yield of jatropha seeds per hectare, and availability of markets for production byproducts, such as glycerol and jatropha cake. Under the scenarios considered, jatropha biodiesel is unlikely to be economically competitive in Nepal unless seed yields per hectare are implausibly large and high returns can be obtained from byproduct markets that do not yet exist. In the absence of byproduct markets, even earnings from a carbon credit do not help jatropha biodiesel to compete with diesel unless the credit value exceeds US$50/tCO2 (which is well above current values) and jatropha seed yield is at or above the midrange of the scenarios considered. Declines in diesel prices from the levels observed in 2009–13 only compound the economic competitiveness issue.