- Email: [email protected]
Africa: Dilemmas of Development and Change; Peter Lewis (Ed.); Westview Press, Boulder, 1998, ISBN 0-8133-2755-5, 456 pp. US$30 (softcover), US$79 (hardcover)
Book reviews / Resources Policy 25 (1999) 205–210
second edition of this academic book consists of three sections, eleven chapters and three appendices. The first section consists of five chapters and focuses on energy resources and some aspects of the economics of energy. Chapter 1 discusses the controversy surrounding fossil fuel resource estimates. It explains the estimation method and provides estimates for the US and the world fossil fuel resources. Adopting government figures, the book predicts that the US oil and coal reserves will be used up by the year 2050 and 2100 respectively. Chapter 2 explains the conventional conversion of energy. It explains, with graphic illustrations, the operations of steam engines, steam power plants, hydroelectric generation, internal combustion, and gas turbines. Chapters 4 and 5 focus on the economics of energy, that is, the supply and demand of energy resources on domestic and international levels. The authors discuss the relationship between GNP and energy consumption in the US and the world with forecasts for the US energy consumption until year 2010. They also discuss energy demand in the United States by sector. In addition, they discuss conservation measures and conclude that there is still room for improvement. Section 2 focuses on energy resources used in power generation and covers coal, nuclear, and electricity. Chapters 7 and 8 discuss nuclear fission technology. They explain in detail how various nuclear reactors work, the operations of nuclear plants, nuclear waste, peaceful and non-peaceful uses of nuclear, safety, environmental impact, and the public dispute about the use of nuclear energy. In chapter 8, the authors claim that it discusses the economics of electric power. It focuses on the cost of electric power and the role of the Federal Energy Regulatory Commission (FERC) in the electricity market. Section 3 focuses on energy technology in the future. In chapter 10, the authors discuss the economics and other social and political issues surrounding the discovery and the adoption of new technology. They discuss, step by step, the process of new technology from the time of invention to the time of adoption. The authors note that while alternative technology is needed and it promises great advances, this promise should be regarded with some skepticism because of financial and, some times, environmental costs. In chapter 11, the authors focus on current and future technology of solar-thermal technology, biomass synthetic fuels, and nuclear fusion. For each, the authors determine the stage of progress in these technologies and the barriers of implementing them. Solar technology reached the commercialization stage and its use currently in new buildings and further advances may lower the cost of implementation and lead to large-scale use. Biomass energy is still a long way from commercialization despite the fact that it is renewable and environ-
207
mentally clean. There are many technical problems preventing the development of nuclear fusion, with funding cuts on fusion R&D; the authors predict a little development if any. Appendix A illustrates, with figures and mathematical formulas, the scientific principles of energy conversion. Appendix B establishes criteria for safety and health standard for energy production and consumption. Appendix C advances some ideas that enhance efficiency in production and consumption of various energy sources. This book is useful for engineering students; however, it lacks economic and policy knowledge that is needed to explain changes in the markets of various energy resources. Data in this edition, in addition to some important issues such as energy security, use of public land for resource extraction, and environmental impacts, is not up to date. While chapter 6 on coal is an excellent chapter and well written, this reader feels that chapter 8, the economics of electric power is weak and out-dated. Further editions could be improved by adding up-to-date data, some economic, environmental, and policy issues, and incorporating Appendix C in the text. Finally, the technical details and illustrations are useful for various researches in the field of energy. A. F. Alhajji Division of Economics and Business, Colorado School of Mines, Golden, Colorado CO 80401-1887, USA 0301-4207/99/$ - see front matter. 1999 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 0 7 ( 9 9 ) 0 0 0 2 0 - 3
Africa: Dilemmas of Development and Change; Peter Lewis (Ed.); Westview Press, Boulder, 1998, ISBN 08133-2755-5, 456 pp. US$30 (softcover), US$79 (hardcover) The disappointing performance with respect to economic development of most countries in sub-Saharan Africa has been a recurrent theme in the international debate on development policies over the past several decades. Governments and policies have changed, but the long-awaited economic takeoff has failed to take place and the populations in many of the region’s countries continue to suffer from poverty. Africa: Dilemmas of Development and Change constitutes an attempt to present a broad discussion of the themes and challenges of development in sub-Saharan Africa. It brings together essays by eighteen writers who analyse the character-
208
Book reviews / Resources Policy 25 (1999) 205–210
istics of African societies from a variety of perspectives. Most of the authors write from a political science perspective—indeed, fourteen of the contributions should probably be classified as belonging to a political science tradition and only the five concluding essays deal exclusively with the economic development. However, the apparent bias may be justified insofar as it is a truism to say that the state is crucial to economic development and nowhere is this clearer than in African countries. The essays on the “political background” are divided into four parts that deal with subjects as diverse as states and leadership, class, ethnicity and gender, and democracy and political transition. It is difficult to summarize the many excellent contributions and it is also in the nature of a volume of this kind that no clear consensus emerges on the solutions. To a non-political scientist, the main benefit of the essays is that they offer valuable insights about the complexities of African political development over the period following decolonialization and the underlying reasons for the failures of many governments to promote development effectively. Some examples of the themes that are brought up in several of the essays include the legacy of colonialism, the role of ethnicity and the emergence of clientelism. It is all to easy for an outside observer today to ignore the enormous negative effects that colonialism had on the economic, political and social structures of African countries. Above all, it made the question of the legitimacy of the state a life or death issue for African governments and thus it contributed to the suppression—whether intended or not—of other potential sources of political and economic power. As the authors show, this suppression and the relative absence of strong civil society institutions underlie many of the problems of African countries. With regard to ethnic differences and conflicts, the outside observer is tempted to simplify the issue and to see it as one of conflict between central authorities and ethnic divisions. As some of the authors demonstrate, the issues are more complex and the interaction between ethnicity and other political and economic factors, including the way in which ethnic divisions have been exploited by governments, is more complicated than is often thought. The emergence of clientelism is also shown to be a consequence both of the need to consolidate the state and the absence of other institutions, notably a dynamic enterprise sector. The authors also point to emerging positive factors, such as the increasing role of associations such as savings co-operatives in the empowerment of women and the “in-built” readiness for change that results from the demographic imbalance in many countries where the young make up a much larger part of the electorate than in countries outside Africa. The essays that deal with economic policies provide an in-depth discussion of the reasons for economic failure in many countries. Early reliance on import substi-
tution policies, reluctance to allow market forces to determine resource allocation, deficient management of external debt and statist intervention played a role in most of the countries, irrespective of whether the governments in question subscribed to Marxist or capitalist theories of development. The world outside Africa is however also shown to bear part of the blame for the lack of progress. The massive reduction in international development assistance, the introduction of structural adjustment programmes with insufficient regard to local economic circumstances, reluctance to open up markets and promotion through export credit schemes of the products of home country companies are all seen to have played a role. Unfortunately, the contributions also paint a bleak picture of the likely future. The debt burden of many African countries is devastating and constitutes a major obstacle to economic growth—this is so in spite of the fact that debts are often not serviced as scheduled. A recent emphasis on export oriented growth concentrating on sectors in which the countries have a competitive advantage has in many cases led to “adding-up” problems since the goods produced by these sectors are the same in most of the countries. Most African countries remain dependent on exports of a few primary commodity exports. Since the book was published, the situation of these countries has worsened further as a result of the fall in commodity prices brought on by the Asian crisis. While the current consensus is that development has to be based in the rural areas and on agriculture, this consensus runs into the problem that the production of agricultural goods for the domestic market increases only slowly due to lack of demand and cutbacks in extension services undertaken as part of austerity packages. Export oriented agriculture is crippled by the reluctance of industrialised countries to open up their markets and the reduction in Asian import needs. Except for a discussion of agriculture, natural resource based sectors receive little attention in the book. However, natural resource exploitation in Africa provides ready examples of many of the reasons for economic failure. Thus, the easiness with which rents from mining can be appropriated and redistributed by the state has probably contributed to the emergence of clientelism in many countries and also to a fair share of the region’s wars over the past decades. Moreover, the difficulties of managing fluctuations in export income due to commodity price variations—difficulties that have stymied the efforts of several countries with stronger institutions in other parts of the world, such as Latin America—are likely to have made a significant contribution to macroeconomic imbalances. In conclusion, the book has much to offer anybody who has a professional or private interest in African political and economic development. For all those who deal with Africa, be they foreign investors or providers
Book reviews / Resources Policy 25 (1999) 205–210
of technical and financial assistance to the governments of the region, an improved understanding of African political and economic institutions is indispensable. The book constitutes a step on the way to such an understanding. One final observation perhaps deserves to be made. Of all the authors, none is based in an African country. Maybe this is unfair to the authors and the editor, but it could be seen as a reflection of the tendency for the world outside Africa to view the region as an enigma to be explained rather than as a source of ideas. Be that as it may, it would have been pleasant if at least a few voices from Africa itself had been included. ¨ stensson Olle O United Nations Conference for Trade and Development, Geneva, Switzerland 0301-4207/99/$ - see front matter. 1999 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 0 7 ( 9 9 ) 0 0 0 2 1 - 5
Environmental Economics and Policy; Jonathan A. Lesser, Daniel E. Dodds and Richard O. Zerbe, Jr.; Addison-Wesley Educational Publishers Inc., Reading, 1997, ISBN 0-673-98210-6. 751 pp (hardcover) Environmental Economics and Policy is an intermediate level textbook aimed at upper division and graduate level courses in environmental economics. The book is divided into four basic parts: the basics of micro-economic analysis and policy, welfare analysis and market failure, measurement of environmental values, and a section of specific topics. The selected topics include: exhaustible resources, renewable resources, water resources, energy resources, growth and sustainability, and international environmental issues. The organization of the book lends itself very well to an upper division environmental economics course because of the progression from basic economic theory to more difficult concepts of market failure and uncertainty. The first part of the book covering the fundamentals of micro-economics does a very good job of summarizing how environmental issues are evaluated by economists and the linkages between economic activities and environmental quality. Ethical considerations and policy goals are also discussed which challenge the way economists traditionally evaluate natural resource use. The one shortcoming of the first part of the book is chapter three, the foundations of economic efficiency and equity. The chapter does not provide enough depth for students with only one or two courses in mirco-economics to adequately understand the concepts of consumer surplus
209
and compensating and equivalent variation as they apply to welfare analysis. These concepts are important enough in the measurement of environmental benefits and costs that they should be covered in more detail. A footnote at the beginning of the chapter acknowledges that the chapter is not a substitute for a micro-economics course, but it would be nice to have the chapter lengthened or divided into two separate chapters which cover consumer preference and demand theory more completely. Supplemental materials are needed to adequately cover the economic foundations chapter as the book is currently written. The second part of the book covering welfare analysis and market failure includes detailed discussions of the causes and economic consequences of externalities, problems associated with open access and public goods, and potential solutions to externalities. The book does an excellent job of defining externalities and illustrating how they create a mis-allocation of resources. Possible remedies such as output taxes, emission taxes, subsidies for pollution control, and command-and-control policies are explained completely. Tradable emissions permits are also mentioned as a possible policy option, but very little detail is presented. Some discussion of the potential efficiency gains from trading pollution permits and the requirements for establishing permit markets would be useful. The second part of the book also includes chapters addressing equity issues, non-economic goals, and the balance between achieving goals that can be measured in economic terms and goals that cannot be measured quantitatively. These chapters provide a very good discussion of the limitations of economic analyses and the importance of non-economic factors in environmental analysis. Environmental laws with non-economic goals, such as the Clean Air Act and Environmental Justice, are discussed in some detail. Part three of the book covers the basics of measuring and valuing environmental goods and services. The hedonic pricing technique, the contingent valuation method, and the travel cost method are described in enough detail that students can understand the mechanics of the techniques and interpret the results of these types of analyses. The techniques for valuing human life and health are also presented along with a discussion of the problems associated with the techniques. Discounting is presented very clearly and concisely along with a very good discussion of issues related to intergenerational equity. The last chapter of part three covers risk and uncertainty. The chapter does a fairly good job of explaining why environmentally related policy decisions incorporate risk aversion due to the potential irreversibility and uncertainty of those decisions. However, the foundations of expected utility theory and the value of information need to be explained in greater detail to fully understand the benefits of incorporating risk-averse behavior in environmental policy decisions.
second edition of this academic book consists of three sections, eleven chapters and three appendices. The first section consists of five chapters and focuses on energy resources and some aspects of the economics of energy. Chapter 1 discusses the controversy surrounding fossil fuel resource estimates. It explains the estimation method and provides estimates for the US and the world fossil fuel resources. Adopting government figures, the book predicts that the US oil and coal reserves will be used up by the year 2050 and 2100 respectively. Chapter 2 explains the conventional conversion of energy. It explains, with graphic illustrations, the operations of steam engines, steam power plants, hydroelectric generation, internal combustion, and gas turbines. Chapters 4 and 5 focus on the economics of energy, that is, the supply and demand of energy resources on domestic and international levels. The authors discuss the relationship between GNP and energy consumption in the US and the world with forecasts for the US energy consumption until year 2010. They also discuss energy demand in the United States by sector. In addition, they discuss conservation measures and conclude that there is still room for improvement. Section 2 focuses on energy resources used in power generation and covers coal, nuclear, and electricity. Chapters 7 and 8 discuss nuclear fission technology. They explain in detail how various nuclear reactors work, the operations of nuclear plants, nuclear waste, peaceful and non-peaceful uses of nuclear, safety, environmental impact, and the public dispute about the use of nuclear energy. In chapter 8, the authors claim that it discusses the economics of electric power. It focuses on the cost of electric power and the role of the Federal Energy Regulatory Commission (FERC) in the electricity market. Section 3 focuses on energy technology in the future. In chapter 10, the authors discuss the economics and other social and political issues surrounding the discovery and the adoption of new technology. They discuss, step by step, the process of new technology from the time of invention to the time of adoption. The authors note that while alternative technology is needed and it promises great advances, this promise should be regarded with some skepticism because of financial and, some times, environmental costs. In chapter 11, the authors focus on current and future technology of solar-thermal technology, biomass synthetic fuels, and nuclear fusion. For each, the authors determine the stage of progress in these technologies and the barriers of implementing them. Solar technology reached the commercialization stage and its use currently in new buildings and further advances may lower the cost of implementation and lead to large-scale use. Biomass energy is still a long way from commercialization despite the fact that it is renewable and environ-
207
mentally clean. There are many technical problems preventing the development of nuclear fusion, with funding cuts on fusion R&D; the authors predict a little development if any. Appendix A illustrates, with figures and mathematical formulas, the scientific principles of energy conversion. Appendix B establishes criteria for safety and health standard for energy production and consumption. Appendix C advances some ideas that enhance efficiency in production and consumption of various energy sources. This book is useful for engineering students; however, it lacks economic and policy knowledge that is needed to explain changes in the markets of various energy resources. Data in this edition, in addition to some important issues such as energy security, use of public land for resource extraction, and environmental impacts, is not up to date. While chapter 6 on coal is an excellent chapter and well written, this reader feels that chapter 8, the economics of electric power is weak and out-dated. Further editions could be improved by adding up-to-date data, some economic, environmental, and policy issues, and incorporating Appendix C in the text. Finally, the technical details and illustrations are useful for various researches in the field of energy. A. F. Alhajji Division of Economics and Business, Colorado School of Mines, Golden, Colorado CO 80401-1887, USA 0301-4207/99/$ - see front matter. 1999 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 0 7 ( 9 9 ) 0 0 0 2 0 - 3
Africa: Dilemmas of Development and Change; Peter Lewis (Ed.); Westview Press, Boulder, 1998, ISBN 08133-2755-5, 456 pp. US$30 (softcover), US$79 (hardcover) The disappointing performance with respect to economic development of most countries in sub-Saharan Africa has been a recurrent theme in the international debate on development policies over the past several decades. Governments and policies have changed, but the long-awaited economic takeoff has failed to take place and the populations in many of the region’s countries continue to suffer from poverty. Africa: Dilemmas of Development and Change constitutes an attempt to present a broad discussion of the themes and challenges of development in sub-Saharan Africa. It brings together essays by eighteen writers who analyse the character-
208
Book reviews / Resources Policy 25 (1999) 205–210
istics of African societies from a variety of perspectives. Most of the authors write from a political science perspective—indeed, fourteen of the contributions should probably be classified as belonging to a political science tradition and only the five concluding essays deal exclusively with the economic development. However, the apparent bias may be justified insofar as it is a truism to say that the state is crucial to economic development and nowhere is this clearer than in African countries. The essays on the “political background” are divided into four parts that deal with subjects as diverse as states and leadership, class, ethnicity and gender, and democracy and political transition. It is difficult to summarize the many excellent contributions and it is also in the nature of a volume of this kind that no clear consensus emerges on the solutions. To a non-political scientist, the main benefit of the essays is that they offer valuable insights about the complexities of African political development over the period following decolonialization and the underlying reasons for the failures of many governments to promote development effectively. Some examples of the themes that are brought up in several of the essays include the legacy of colonialism, the role of ethnicity and the emergence of clientelism. It is all to easy for an outside observer today to ignore the enormous negative effects that colonialism had on the economic, political and social structures of African countries. Above all, it made the question of the legitimacy of the state a life or death issue for African governments and thus it contributed to the suppression—whether intended or not—of other potential sources of political and economic power. As the authors show, this suppression and the relative absence of strong civil society institutions underlie many of the problems of African countries. With regard to ethnic differences and conflicts, the outside observer is tempted to simplify the issue and to see it as one of conflict between central authorities and ethnic divisions. As some of the authors demonstrate, the issues are more complex and the interaction between ethnicity and other political and economic factors, including the way in which ethnic divisions have been exploited by governments, is more complicated than is often thought. The emergence of clientelism is also shown to be a consequence both of the need to consolidate the state and the absence of other institutions, notably a dynamic enterprise sector. The authors also point to emerging positive factors, such as the increasing role of associations such as savings co-operatives in the empowerment of women and the “in-built” readiness for change that results from the demographic imbalance in many countries where the young make up a much larger part of the electorate than in countries outside Africa. The essays that deal with economic policies provide an in-depth discussion of the reasons for economic failure in many countries. Early reliance on import substi-
tution policies, reluctance to allow market forces to determine resource allocation, deficient management of external debt and statist intervention played a role in most of the countries, irrespective of whether the governments in question subscribed to Marxist or capitalist theories of development. The world outside Africa is however also shown to bear part of the blame for the lack of progress. The massive reduction in international development assistance, the introduction of structural adjustment programmes with insufficient regard to local economic circumstances, reluctance to open up markets and promotion through export credit schemes of the products of home country companies are all seen to have played a role. Unfortunately, the contributions also paint a bleak picture of the likely future. The debt burden of many African countries is devastating and constitutes a major obstacle to economic growth—this is so in spite of the fact that debts are often not serviced as scheduled. A recent emphasis on export oriented growth concentrating on sectors in which the countries have a competitive advantage has in many cases led to “adding-up” problems since the goods produced by these sectors are the same in most of the countries. Most African countries remain dependent on exports of a few primary commodity exports. Since the book was published, the situation of these countries has worsened further as a result of the fall in commodity prices brought on by the Asian crisis. While the current consensus is that development has to be based in the rural areas and on agriculture, this consensus runs into the problem that the production of agricultural goods for the domestic market increases only slowly due to lack of demand and cutbacks in extension services undertaken as part of austerity packages. Export oriented agriculture is crippled by the reluctance of industrialised countries to open up their markets and the reduction in Asian import needs. Except for a discussion of agriculture, natural resource based sectors receive little attention in the book. However, natural resource exploitation in Africa provides ready examples of many of the reasons for economic failure. Thus, the easiness with which rents from mining can be appropriated and redistributed by the state has probably contributed to the emergence of clientelism in many countries and also to a fair share of the region’s wars over the past decades. Moreover, the difficulties of managing fluctuations in export income due to commodity price variations—difficulties that have stymied the efforts of several countries with stronger institutions in other parts of the world, such as Latin America—are likely to have made a significant contribution to macroeconomic imbalances. In conclusion, the book has much to offer anybody who has a professional or private interest in African political and economic development. For all those who deal with Africa, be they foreign investors or providers
Book reviews / Resources Policy 25 (1999) 205–210
of technical and financial assistance to the governments of the region, an improved understanding of African political and economic institutions is indispensable. The book constitutes a step on the way to such an understanding. One final observation perhaps deserves to be made. Of all the authors, none is based in an African country. Maybe this is unfair to the authors and the editor, but it could be seen as a reflection of the tendency for the world outside Africa to view the region as an enigma to be explained rather than as a source of ideas. Be that as it may, it would have been pleasant if at least a few voices from Africa itself had been included. ¨ stensson Olle O United Nations Conference for Trade and Development, Geneva, Switzerland 0301-4207/99/$ - see front matter. 1999 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 0 7 ( 9 9 ) 0 0 0 2 1 - 5
Environmental Economics and Policy; Jonathan A. Lesser, Daniel E. Dodds and Richard O. Zerbe, Jr.; Addison-Wesley Educational Publishers Inc., Reading, 1997, ISBN 0-673-98210-6. 751 pp (hardcover) Environmental Economics and Policy is an intermediate level textbook aimed at upper division and graduate level courses in environmental economics. The book is divided into four basic parts: the basics of micro-economic analysis and policy, welfare analysis and market failure, measurement of environmental values, and a section of specific topics. The selected topics include: exhaustible resources, renewable resources, water resources, energy resources, growth and sustainability, and international environmental issues. The organization of the book lends itself very well to an upper division environmental economics course because of the progression from basic economic theory to more difficult concepts of market failure and uncertainty. The first part of the book covering the fundamentals of micro-economics does a very good job of summarizing how environmental issues are evaluated by economists and the linkages between economic activities and environmental quality. Ethical considerations and policy goals are also discussed which challenge the way economists traditionally evaluate natural resource use. The one shortcoming of the first part of the book is chapter three, the foundations of economic efficiency and equity. The chapter does not provide enough depth for students with only one or two courses in mirco-economics to adequately understand the concepts of consumer surplus
209
and compensating and equivalent variation as they apply to welfare analysis. These concepts are important enough in the measurement of environmental benefits and costs that they should be covered in more detail. A footnote at the beginning of the chapter acknowledges that the chapter is not a substitute for a micro-economics course, but it would be nice to have the chapter lengthened or divided into two separate chapters which cover consumer preference and demand theory more completely. Supplemental materials are needed to adequately cover the economic foundations chapter as the book is currently written. The second part of the book covering welfare analysis and market failure includes detailed discussions of the causes and economic consequences of externalities, problems associated with open access and public goods, and potential solutions to externalities. The book does an excellent job of defining externalities and illustrating how they create a mis-allocation of resources. Possible remedies such as output taxes, emission taxes, subsidies for pollution control, and command-and-control policies are explained completely. Tradable emissions permits are also mentioned as a possible policy option, but very little detail is presented. Some discussion of the potential efficiency gains from trading pollution permits and the requirements for establishing permit markets would be useful. The second part of the book also includes chapters addressing equity issues, non-economic goals, and the balance between achieving goals that can be measured in economic terms and goals that cannot be measured quantitatively. These chapters provide a very good discussion of the limitations of economic analyses and the importance of non-economic factors in environmental analysis. Environmental laws with non-economic goals, such as the Clean Air Act and Environmental Justice, are discussed in some detail. Part three of the book covers the basics of measuring and valuing environmental goods and services. The hedonic pricing technique, the contingent valuation method, and the travel cost method are described in enough detail that students can understand the mechanics of the techniques and interpret the results of these types of analyses. The techniques for valuing human life and health are also presented along with a discussion of the problems associated with the techniques. Discounting is presented very clearly and concisely along with a very good discussion of issues related to intergenerational equity. The last chapter of part three covers risk and uncertainty. The chapter does a fairly good job of explaining why environmentally related policy decisions incorporate risk aversion due to the potential irreversibility and uncertainty of those decisions. However, the foundations of expected utility theory and the value of information need to be explained in greater detail to fully understand the benefits of incorporating risk-averse behavior in environmental policy decisions.