wisconsin unemployment weekly claim: Temmuz 2012

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Using empirical evidence from panel analysis of current account dynamics and of bilateral trade balances, the paper argues that the large German current account surplus during the 2000s can be explained by an increasing gap between productivity growth in manufacturing vis-Ã -vis services. Such a gap is due not only to improvements in the manufacturing sector but also to a significant slowdown of productivity growth in services. Therefore, despite the success in export markets, the German surplus may signal long-run weaknesses associated with constraints on service sector productivity growth and the inability of productivity growth in manufacturing to create positive spill-over effects on services. Persistence of barriers to liberalisation in services as well as the dominant type of technological progress in manufacturing, based on improving the efficiency of existing products, may partly explain these phenomena. A key factor behind these sectoral differences is the education system, which relies on highly specialised vocational schools, generating high returns for on the job training and creating incentives for efficiency gains in existing products and sectors. The paper concludes that there is room for comprehensive structural policies consistent with an equilibrium reduction in the current account surplus, accompanied by higher and more balanced growth. Global imbalances in the form of large current account deficits/surpluses are at the center of the international policy debate.
According to recent studies (see for instance Cheung et al., 2010), the German surplus in the period 2004-08 cannot be explained on the basis of a traditional model referring to typical determinants of the current account (e.g. demographics, growth rates, macroeconomic policies).
Although the China-US mirror imbalances are those that have attracted more attention, developments in the euro area have raised the issue of sustainability of the monetary union in a context of large imbalances. Large deficits in the so-called periphery of the euro area are mirrored by the large surplus of Germany. Although the accumulation of surpluses with respect to peripheral euro area countries has been a relevant aspect of the increased German surplus during the 2000s, non-euro area countries account for a large proportion of the German surplus too. For instance, in the sample of OECD countries, the trade surplus with respect to Greece, Portugal and Spain accounts for about 10% of the sum of all surplus positions of Germany with OECD countries, whereas the UK and the US each account for more than 12%. However, before jumping to the conclusion that the surplus requires policy interventions one should establish that the surplus is the result of distortions and not an equilibrium phenomenon.
Two different interpretations of the same phenomenon have been advanced: one claiming that the surplus reflects the competitiveness of the German industry in world markets5; the other, asserting that the increase in net exports reflects the compression of domestic demand due to high domestic savings associated with precautionary reasons6 In fact, both interpretations share the view that reforms in the labour market ensured wage moderation, labour market flexibility (part-time and temporary jobs) and a consequent increase in profits and competitiveness of German firms. Moreover, the same labour market reforms might have increased job insecurity and uncertainty among workers, with a consequent increase in precautionary savings and thus compressing consumption (Bertola and Lo Prete, 2011).
Although both views find prima facie empirical support, with the competitiveness view supported by the rapid increase in productivity in the German manufacturing industry and the precautionary savings view supported by the sizable increase in national savings, a closer look at the data suggests a more nuanced interpretation. On the productivity front, it is remarkable that the increase in productivity in manufacturing has been accompanied by stagnant productivity in the service sector, which is in striking contrast with the US.
More generally, the positive results on exports are related to the so-called "intensive margin", with an increase in exports in existing products rather than in new products. Among EU countries, Germany has the largest share of export growth due to the intensive margin, and the lowest from new products, as shown in Cheptea et al. (2010).
Moreover, productivity growth has been achieved with a contribution of technologically intensive investments that is still well below the levels of countries like the US. Furthermore, the bulk of Germany’s export share gains was achieved in technologically low market segments (Cheptea et al., 2010). In summary, despite the positive signs of increased competitiveness there are some signals of potential longer term weaknesses.
Regarding the precautionary savings view, the evidence is weak as the increase in savings took place not in the household sector but in the corporate sector. The channel of transmission from reforms, especially in the labour market, and the current account is therefore different from the one envisioned in the precautionary savings approach. Corporate savings have been boosted by labour market reforms, leading to a sizable redistribution of income from wages to profits and thus a consequent reduction of propensity to consume, which is usually much higher for wage income than for profits
In this paper, we follow a different approach from those outlined above and we will focus on the relative role of "supply side" factors and factors associated with the potential role of labour market reforms. We argue that the puzzling surplus in the current account of Germany in the 2000s can be explained by an increasing gap between productivity growth in manufacturing vis-Ã -vis the service sector.
Coricelli, F. and A. WÃ¶rgÃ¶tter (2012), “Structural Change and the Current Account: The Case of Germany”, OECD. Economics Department Working Papers, No. 940, OECD Publishing.OECD Economics Department Working Papers No. 940
The Case of Germany. Structural Change and the Current Account
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World Bank Group President Robert B. Zoellick's Q&A Session at The Economist World Oceans Summit

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Transcript
The Economist World Oceans Summit World Bank Group President Robert B. ZoellickA Q&A session with The Economist Editor in Chief, John Micklethwait
February 24, 2012Singapore
MICKLETHWAIT: Thank you Bob. A somewhat churlish question, you might say, particularly from a man who's just said that he'll raise 1.5 billion for the oceans. What some people are bound to ask is, why do we need a new partnership for the oceans? You've got the UN, you've got a variety of different groups already involved. Why this extra level?ZOELLICK: I think the good news is - I commented in my remarks early on - is that there have been tremendous contributions from a wide variety of players, but the facts don't lie. The statistics are we're not doing enough, we're not accomplishing enough and the oceans continue to get sick and die.So as we started this dialogue with partners - and I'll first acknowledge many of them had much more experience than I would've had in this area - but I've seen this in other fields of biodiversity. We started to find that there was a commonality - a recognition that in some case the knowledge and experience, for example, of setting up governance or rights-based fishing hadn't expanded to other areas. In some cases - and I've worked with governments all my life on this - people aren't aware that what they're developing in a coastal zone is one development project could have huge effects on the oceans. They may not know about the nitrogen that's going to supposedly help their agriculture fertilizer system but ends up polluting the oceans.So part of the role here is to be catalytic in trying to get a greater focus on financial resources, knowledge resources, and as is often the case when you bring in developing countries in this - and here particularly you've got a lot of small island states - and see that the net gain from some particular investments could be much larger, then what we've seen in areas as diverse as tigers to other areas of economic development, you have to measure it.You have to be - goodwill is not enough. So again, in the time that I've tried to add some focus to this, I've had a chance to meet - I know many of the people in the room - and there's some fascinating ideas out there. We just have to get them out and we have to drive them forward.MICKLETHWAIT: Do you think the data's sufficient? You just mentioned the numbers. We've had a number of people here make the comment that we know more about the far side of the moon than we do about the oceans. Is that a problem from your point of view?ZOELLICK: Well you've got people here who are more expert. From what I've been able to see, there is a lack of information but I remember talking - I think this was a conversation with Peter Seligmann of Conservation International – what is being developed quite quickly, and we've seen this in other areas, in terms of mapping oceans, mapping particular areas, but then seeing their interconnection could be hugely beneficial. This again is something I've seen in other areas of development. If we can work together to develop a knowledge platform and make it easier for all participants; private companies, island governments, large states; to be able to tap into that, again, I think we can maximize the individual investments.MICHKELWAIT: One thing which has run right the way through this conference is I suppose the idea of whether you can make more money out of the seas, with quite a lot of people worried about the devastation, the economic spoliation, I suppose, of the seas. Yet you very plainly are coming at it from the point of view that this is a route to economic growth. Can you just say a little bit more about that?ZOELLICK: Well, there's some analogies actually - energy efficiency. The first step is to stop doing dumb things. So you've got subsidies that are used for fisheries that are net negatives to the system, so when I was referring to the negative $5 billion loss, the fisheries [that we want] are trying to move to $20 billion to $30 billion a year gain. That's probably because money is misused.So then I was reading an account coming from some of the Prince of Wales charities where some fisheries, people have been able to see, once they crash, once they start to rebuild them, and as they start to develop either a rights-based system or others that are sometimes based on local populations, you can start to see the economic gain. So when you and I first studied economics or many people did, there was an issue called the global commons, and it's the issue about how things can be misused. Well this is the classic case of the global commons, and since it covers 71 percent of the Earth's surface, it's a pretty big one.MICKLETHWAIT: Would you think there's a particular thing to do with people from deep inland actually using the oceans but not actually knowing that they're causing problems there? It's very obvious, fisheries, they're involved. It's very obvious hotels, right on the outside on the coast. But people from deep inland who are actually causing problems within the oceans but they never actually carry the full cost of it.ZOELLICK: Well this is another one of those British-American tensions since you're from an island maritime nation and I'm from Illinois, which you'd probably consider to be a landlocked, Midwestern…MICKLETHWAIT: Very, very landlocked, yeah.ZOELLICK: But we do have the Great Lakes. But I think as you probably know, given your study of military history, a lot of the greatest admirals come from the Midwest.MICKLETHWAIT: There's a very, very [ill] joke…ZOELLICK: I think the reality is that there's a - part of this of course is that people are unaware of this. People are unaware of the dangers that I talked about. When you think about 85 percent of the fish stocks are either being severely depleted or close to that stage, this is a huge effect. The good news is, in a world where you see the interconnections with films and internet, I think people are much more alert to this. So part of the challenge with this - and this is again where I hope we can coalesce - people are barraged with information.There's challenges, as you and I were just talking about, of all types. But I think here if you bring together a series of communities, whether it be the governments, the scientific, the conservation communities, the development community, and focus on some core points and core things to achieve, I think you have a better chance of bringing others along. What I found in this area, but also other areas of development, that's been quite encouraging is I'm increasingly finding private companies that find that the governments themselves seem to be stuck.The private companies want to push the agenda but sometimes they're less familiar with how to build the governance structures. And so if we can get those interconnected, I think we can make progress. There's an idea I just alluded to in my remarks, and probably it'll come out in the course of the discussion, which I know that Kiribati has been a key leader in - but when you start to take the island chains and then you take their 200 mile economic zones, and then you can imagine creating a network of these, you could start to have a rather significant effect in creating a form of governance because it could start to affect how fisheries industries interact with those islands.But as was noted in one of the cases, I think is the case of Kiribati, while they start to have the governance system, they don't really have much of a coast guard. So you have the US Coast Guard sending some ships out as part of a training exercise. Those are problems with rather modest investment you can take a concept of governance, an economic issue connected to the law enforcers, some minimal resources, and then you start to leverage it over different players.At the same time, it'll be very important that the communities working on this work with those that are concerned about the freedom of the seas. So I think there's a potential here to be able to leverage a series of individual islands much more effectively than we're doing today.MICKLETHWAIT: Let me throw it open to the audience questions. There's a lady there.ZOELLICK: Could you give your name or who you…MICKLETHWAIT: Yes, that would be good.ALEXANDRA VAN: Hello, I'm Alexandra [Van]. I work with the World Future Council. That's a global forum that's working to protect the rights of future generations. We will be celebrating this year the world's best ocean and coastal policies with the future policy of water partnership at the global [unclear] facility, the Food and Agriculture Organization, the CBT. So Mr Zoellick, thank you very much for your presentation and congratulations for the new partnership. I want to build up on what you have said that there needs to be much more that needs to be done, we need to agree on common recommendations and having an action plan.So I would like to get back to your comments on marine protected areas because we had this morning very good discussions about the potential economic benefits also of marine protected areas. Now, in Nagoya, governments have agreed actually to have the target of 10 percent of marine protected areas, so I would just like to follow up with you if under this partnership you will be supporting the 10 percent goal that was [already] agreed by 193 countries. Thank you very much.ZOELLICK: Well, the goal that came up from the various groups here was 5 percent. They're more than doubling. Now, would I be delighted with 10 percent? Sure. But I was at Nagoya and I've been attending some of those conferences since Rio in '92, and I guess one of the distinctions I'll draw is the difference between what I've seen between when people put words on paper and even sort of put the gavel to say a nice concluding statement - and then what they actually achieve.What we've tried to do, whether it be climate change or biodiversity or in this area with oceans, is try to organize the different parties together - conservation, scientific, international organizations and others - and set realistic goals. My own sense from what I know, that I'm happy to defer to others, that doubling the 5 percent will be a significant effort to achieve.So if you can go to five to 10 percent - as we all noted, the land is 12 percent - I'm all for it. But let's take realistic milestones and try to get them done, and once we get that one done then you can go to the next one.MICKLETHWAIT: Another question. Two hands back there.PARTICIPANT: Thank you. My name's [unclear]. I am former Minister of Marine Affairs and Fisheries, Republic of Indonesia. Right now I'm working as Professor for [unclear]. I think you agree that despite the global effort of restoring ocean deterioration. But the fact is that the state of our ocean tends to be unsustainable, be it in terms of fishing, water pollution and habitat degradation. My conclusion is that why despite global efforts, ocean still unsustainable because up until now, we're only tackling the symptoms of the problems.We've never caught the real causes of the problems, and I think that the cause of the problem in our world is that the human demand on the carrying capacity exceeds the carrying capacity of the ocean in providing resources and [unclear] and we know the human demand is determined by two things: number one is the number of population, and number two is consumption rate of the people on our resources and [unclear] of humanity in terms of pollution.So I'm just wondering if I could suggest that to tackle the global problems, I think number one, we have to increase the carrying capacity of oceans on Earth, and number two is to align our human demand [unclear] carrying capacity. My question to you then…MICKLETHWAIT: I think you've gone on a very long time. Can you just give your question very rapidly?PARTICIPANT: Yeah, my question is, how to reduce or control human demand?MICKLETHWAIT: Thank you, that's a very good question. Essentially it's [Malthuse] of the seas.ZOELLICK: Well, this is an interesting issue that arises at the interstices of a lot of conservation and environmental issues and economic growth issues. The economist's answer would be price because that's what allocates scarce goods. I think what we've all identified here is we have a problem because of the commons and so the normal market economic mechanisms don't work because you really don't have in many areas the property rights or the ownership and so you've had people who will get short-term gains and not invest in the long term.So part of what we've been discussing is how through governance reforms, lessons about how you can create rights-based systems, but also sort of a recognition that various communities have to have their sensitivities taken into account, so in some areas, it's a question of who's going to get the fishing rights, whether it'll be local population. Then in any market-based system, you also have to have enforcement, and part of the big problem in this area is whatever rights and aspects haven't been enforced. So there's huge steps that can be taken in these areas.The reason I'm taking this approach is that what I've seen in other areas of development and environment, if you pose the two against each other, if you put growth against environment, I think you're going to spend a lot of time debating and there's going to be a lot of poor people who want to grow and develop and want their sources of protein. So maybe it's just my bias but I found whether it be carbon and climate change or others that you can find a lot of win-win, mutual solutions and you're likely to build a broader coalition and build more support.I think it's time that that be tried in the oceans area because we're starting to see the coalescence of different communities; science, island-based nations, coastal nations, people recognizing this. But the question is how do we interconnect these? And I think the start is set some basic goals and then share the information about what works and then try to finance it.MICKLETHWAIT: There's another question just beyond the white hand - white-shirted…JERRY KNICK: Mr Zoellick, my name's Jerry [Knick] and I actually owe you a debt of gratitude because three years ago, [unclear] programs, you provided some funding for us to develop a concept for developing sustainable fisheries as an industry-led activity [in Indonesia]. Three years later we've gone through the process of developing all the parts and pieces and we're about to start [unclear] and building the infrastructure that's part of the plan. Interestingly enough, the most difficult part of this process has been financing it. My experience has been that the financing institutions of the world [unclear] in this space [unclear] fisheries [unclear] they'll perceive the risk of being too high to get involved. So my question to you is how accessible is financing going to be for fisheries in transition part [unclear] overall [plan as] proposed?ZOELLICK: Two points. The first one is, I think what we have to recognize, that some of these areas we're talking about public goods. So the question is - and this is why we're starting out with this $300 million catalytic fund and we're looking to governments, some private sector participants and others, there'll be some investments that wouldn't be made on a basic market term.Second, however, as I've suggested, you could switch what are in some cases a lot of misapplied subsidy policies or also policies that might create incentives or disincentives with fees and licensing or taxes or other arrangements to try to create the right economic structure. What I've been encouraged by is you're finding more and more private sector players that look at the facts that we've seen and realize this can't go on and so they're interested in trying to invest in a rebuilding effort.The World Bank has a private sector arm, IFC, that is also going to be part of this, so as we work with partners to be able to try to get the governance in the market and the protected areas right to try to see how we might be able to catalyze further private sector investment in addition to the public sector side. On the public sector side again, we as an institution, as I mentioned already, have about $1.6 billion in this area. That is not money that we decide by ourselves. We have to do that with governments.So part of this goes back to getting the word out to the governments about how these are in their interest and then they can use the various financing mechanisms that we have, whether it be coastal zone or fisheries or marine protected areas, which we're involved with all of it. But then let me make the second point, 'cause it's something I want to emphasize about the World Bank's involvement - something I've tried to emphasize over the past four and a half years of my tenure. We're trying to work as a network player here.With a lot of the questions and the reason why this conference I think is particularly valuable, as others that have led to it, is we see ourselves in a catalytic role but certainly not one that knows all the answers. I know I've been with John at a couple of different functions where I've just been stunned by some of the insights that you have, not surprisingly, of people in marine biology, others that have devoted themselves.So what I do want to communicate with people, I'm glad our modest investment with you has started to pay off, but where we see ourselves as trying to be a support in a process is to use the networks that we have across different communities but frankly draw on the ideas of people in this room and others that are committed to it.MICKLETHWAIT: I'm very sorry. Unfortunately we have to come to an end there because Bob has to catch a plane. But I would like to thank him…ZOELLICK: Actually, to see the Finance Minister.MICKLETHWAIT: To see the Finance Minister to try and raise money for this great purpose. I would like to thank him very, very much for coming in and for making the time. It's been a heroic scheduling appointment to come here. It's a delight as usual to have you, and I will take you off and we will hand over to [Dominic Ziegler] up here. Thank you.Original
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Review of the EPA's Economic Analysis of Final Water Quality Standards for Lakes and Flowing Waters in Florida (2012)

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he Environmental Protection Agency's estimate of the costs associated with implementing numeric nutrient criteria in Florida's waterways was significantly lower than many stakeholders expected. This discrepancy was due, in part, to the fact that the Environmental Protection Agency's analysis considered only the incremental cost of reducing nutrients in waters it considered "newly impaired" as a result of the new criteria—not the total cost of improving water quality in Florida. The incremental approach is appropriate for this type of assessment, but the Environmental Protection Agency's cost analysis would have been more accurate if it better described the differences between the new numeric criteria rule and the narrative rule it would replace, and how the differences affect the costs of implementing nutrient reductions over time, instead of at a fixed time point. Such an analysis would have more accurately described which pollutant sources, for example municipal wastewater treatment plants or agricultural operations, would bear the costs over time under the different rules and would have better illuminated the uncertainties in making such cost estimates.Key Findings

The Environmental Protection Agency's (EPA) cost estimate was lower than those calculated by other stakeholder groups due to several factors. First, EPA considers only the incremental cost of improving the quality of waters that are newly identified as impaired based on the numeric nutrient criteria rule, and does not consider waters that Florida has already determined to be impaired based on existing methodologies. Second, EPA and other stakeholders made different assumptions about the extent to which certain pollutant sources should be included in their cost analyses. Third, there are differing assumptions made about the level of technology that will be needed to meet the numeric nutrient criteria.
EPA was correct to estimate incremental costs of the change from the narrative to numeric approach, but some members of the media, the public, and decision makers misinterpreted EPA's incremental cost estimate as the total cost needed to improve Florida water quality. The total costs to meet Florida's water quality goals are highly uncertain but will substantially exceed the incremental costs of any rule change and will take decades to achieve.
In all sectors, Florida's current level of implementation of best management practices to reduce nutrient pollution was assumed by EPA to continue under the numeric nutrient criteria rule and to be satisfactory. However, the committee found that the use of current best management practices is unlikely to be sufficient to meet beneficial designated uses in Florida waters.
Under the numeric nutrient criteria rule, monitoring data on nitrogen and phosphorus concentrations are used to identify newly impaired water bodies. However, for about 77 to 86 percent of the lakes and flowing waters in Florida, there are not enough monitoring data to make an assessment. EPA assumed that all unassessed waters would be in compliance with the numeric nutrient criteria rule, which led EPA to underestimate the number of newly impaired waters.
For each sector of pollutant sources, EPA estimated the incremental cost of complying with the numeric nutrient criteria rule. The report concluded that EPA underestimated the incremental cost for the stormwater, agricultural, septic system, and government sectors. There is significant uncertainty in the EPA cost estimate for the municipal and industrial wastewater sectors, making it difficult to know whether the EPA under- or over-estimated the incremental cost in these sectors.
EPA's cost analysis would have been more accurate if it better described the differences between the new criteria rule and the narrative rule it would replace, and how the differences affect the costs of implementing nutrient reductions over time, instead of at a fixed time point. Timing was not considered in the EPA report, but in reality, the speed with which actual water quality benefits are observed is constrained by the time required to conduct necessary studies and implement load controls, and by available budgets and staff.
Comparing the rules over time also can provide an opportunity to present a realistic picture of how water quality improvement actions might unfold under alternative rules, by illustrating the time lags between listing and achievement of water quality standards. Most importantly, reporting on timing would provide useful information for predicting annual budgetary requirements.
If done correctly, EPA's analysis would have revealed that point sources of water pollution are going to face increased costs sooner under the numeric nutrient criteria than under the narrative process. How costs to nonpoint sources and water quality benefits would materialize under the different rules is uncertain.
Many assumptions are made in predicting administrative and load control costs over time, leading to uncertainty in cost analyses. This uncertainty—which can stem from such issues as a lack of knowledge about the cost of a relatively new technology, or about how implementation of the numeric nutrient criteria will be translated to effluent limits for point sources—was inadequately represented in the EPA analysis.
Conducting an alternative cost analysis, with increased attention to careful assessment of rule differences, stakeholder engagement, and uncertainty analysis, might not have been possible with the budget and time EPA spent on it cost analysis. Any critique of the existing EPA cost analysis should recognize that some deficiencies may be traced to time and budget limitations.

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Improving farmers' access to agricultural insurance in India

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Agriculture is an uncertain business in India, partly due to its high dependence on the weather, leaving 120 million farmer households vulnerable to serious hardship. By providing claim payments to farmers in the event of crop failure, agricultural insurance can directly improve the welfare of risk averse farmers, particularly the 80 percent of ‘small and marginal’ Indian farmer households operating less than two hectares. Perhaps even more importantly, affordable agricultural insurance can in effect act as collateral against loans, increasing the creditworthiness of farmers and allowing them the opportunity to invest in appropriate inputs to increase agricultural productivity (Hazell 1992). By strengthening markets for agricultural credit while providing reliable protection that is attractive to the most risk averse, crop insurance may be a more attractive channel for government support to rural livelihoods and risk mitigation than ex-post disaster transfers, which offer no ex-ante guarantee to farmers and may therefore have limited impact on ex-ante decisions, or loan waiver or input subsidy programs, which may adversely distort behavior.

However, the provision of agricultural insurance is challenging, particularly in developing countries. Multiple Peril Crop Insurance programs, where each policyholder is indemnified against their own crop loss, were fraught with moral hazard, fraud and adverse selection, leading to high costs (Hazell 1992, Skees et al. 1999). By comparison, recent experience with voluntary weather indexed insurance has been somewhat underwhelming, with low voluntary demand (Cole et al. 2009, Binswanger-Mkhize 2011).

The Government of India, having historically focused on crop insurance as a planned mechanism to mitigate the risks of natural perils on farm production, is responsible for the world’s largest crop insurance program with 25 million farmers insured. The National Agriculture Insurance Scheme (NAIS) is the main crop insurance program in the country, and in states and union territories that choose to participate, insurance for food crops, oilseeds and selected commercial crops is compulsory for all farmers that borrow from financial institutions and is voluntary for non-borrowing farmers without loans. The NAIS operates on an area yield indexed basis, whereby claim payments to farmers depend on the average yield of the insured crop measured across the insurance unit, typically an administrative block, in which they live. Area yield indexed crop insurance offers a middle ground between indemnity-based multiple peril crop insurance and weather based index-based weather insurance, with the potential for a greater r silience to moral hazard, fraud and adverse selection than the former and lower basis risk, the risk of a mismatch between incurred losses and indexed claim payments, than the latter (Carter et al. 2007).

However, the NAIS is not without its challenges, most notably the open-ended and highly variable fiscal exposure for state and central government, significant delays in the settlement of the farmers’ claims, and dependence on an inefficient crop yield estimation process. The insurance premium rates paid by the farmers are capped and claims in excess of the capped premium volume are borne equally by the state and the central governments after harvest; for every 1 rupee of farmer premium paid between 2000 and 2008 the total claim payment to farmers was 3.5 rupees. The ex-post funding arrangement leads to an open ended fiscal exposure for governments and volatile annual contributions that are difficult to predict in advance of harvest. Indemnity payments tend to get extremely delayed (up to 9-12 months) in part because of administrative and budgetary processes for post-disaster funding of the excess losses. Finally, the crop yield estimation process conducted by the states, used for insurance claims, is subject to reporting delays, inconsistency and moral hazard. In addition, the current NAIS suffers from poor risk classification, which has led to a somewhat arbitrary allocation of government subsidies, and poor marketing.

It was in this context that the Government of India formed a joint task-force with the Ministries of Agriculture and Finance and the public insurance company, the Agricultural Insurance Company of India (AICI) to enhance the crop insurance program and improve insurance coverage. The repor (Joint Group 2004) suggested action on the following items: review current underwriting methodology; develop an actuarially sound design and pricing methodology based on international best practice to act as the foundation for a move to an ex-ante funded, market-based crop insurance program; develop product design and pricing methodology for new weather index insurance products; and suggest cost-effective catastrophe risk financing solutions for the public crop insurance company.

This joint work eventually led to the design and implementation of a modified NAIS (mNAIS), with planned pilot period lasting for three seasons starting winter 2010-11 (Table 1). This is potentially a major initiative given the significant scale of NAIS. If well implemented, an improved program would result in increased benefits for millions of current farmer clients and lead to greater coverage of the insurance program. However, significant challenges remain

World Bank. Author:Mahul, Olivier;Verma, Niraj;Clarke, Daniel J.Document Date: 2012/03/01. Document Type: Policy Research Working Paper. Report Number: WPS5987

Improving farmers' access to agricultural insurance in India

Kenya's mobile revolution and the promise of mobile savings

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Kenya has undergone a remarkable information and communications technology (ICT) revolution. At the close of the 1990s, less than 3 percent of Kenyan households owned a telephone, and fewer than 1 in 1,000 Kenyan adults had mobile phone service. By the end of 2011, 93 percent of Kenyan households owned a mobile phone.

A unique facet of the ICT phenomenon in Kenya has been the widespread proliferation of mobile money. Starting with the M-PESA system launched by Safaricom in 2007 and later joined by other systems, mobile money has become a fixture in the lives of Kenyans, extending a basic form of financial access to a wide population.

Mobile money platforms have evolved since inception and have entered a new phase with the advent of bank-integrated mobile savings products. The first such product, M-KESHO, was launched in March 2010 as a partnership between Safaricom and Equity Bank.

In this paper we examine the mobile savings phenomenon, using data collected in a survey during October and November of 2010. The concept of ―savings on mobile platforms is not well defined, and we begin by putting forward a classification of the existing innovations. We differentiate between ―basic mobile savings‖ and ―bank-integrated mobile savings. Basic mobile savings refers to the simple storage of credit using a mobile system such as M-PESA. Bank-integrated mobile savings refers to systems which include a fuller set of banking services such as interest payments on deposits or overdraft facilities. This is the first study that examines patterns of use of bank-integrated mobile savings in Kenya.

The paper is organized as follows. Section 2 presents findings on the overall prevalence of mobile phone and mobile money usage in Kenya based on the Afrobarometer survey conducted at the end of 2011. Section 3 reviews the existing literature on the broader mobile money phenomenon. Section 4 describes how mobile money works in Kenya and shows the growth of mobile money usage over time. Section 5 describes the data on mobile savings analyzed in this paper. Section 6 describes the concept and measurement of mobile savings. Section 7 presents
the core analysis. Section 8 discusses the future of mobile savings and concludes.

World Bank. Author:Demombynes, Gabriel; Thegeya,Aaron.Document Date: 2012/03/01. Document Type: Policy Research Working Paper. Report Number: WPS5988

Kenya's mobile revolution and the promise of mobile savings x

7 Temmuz 2012 Cumartesi

World Bank Group President Robert B. Zoellick's Q&A Session at The Economist World Oceans Summit

Review of the EPA's Economic Analysis of Final Water Quality Standards for Lakes and Flowing Waters in Florida (2012)

The Environmental Protection Agency's (EPA) cost estimate was lower than those calculated by other stakeholder groups due to several factors. First, EPA considers only the incremental cost of improving the quality of waters that are newly identified as impaired based on the numeric nutrient criteria rule, and does not consider waters that Florida has already determined to be impaired based on existing methodologies. Second, EPA and other stakeholders made different assumptions about the extent to which certain pollutant sources should be included in their cost analyses. Third, there are differing assumptions made about the level of technology that will be needed to meet the numeric nutrient criteria.
EPA was correct to estimate incremental costs of the change from the narrative to numeric approach, but some members of the media, the public, and decision makers misinterpreted EPA's incremental cost estimate as the total cost needed to improve Florida water quality. The total costs to meet Florida's water quality goals are highly uncertain but will substantially exceed the incremental costs of any rule change and will take decades to achieve.
In all sectors, Florida's current level of implementation of best management practices to reduce nutrient pollution was assumed by EPA to continue under the numeric nutrient criteria rule and to be satisfactory. However, the committee found that the use of current best management practices is unlikely to be sufficient to meet beneficial designated uses in Florida waters.
Under the numeric nutrient criteria rule, monitoring data on nitrogen and phosphorus concentrations are used to identify newly impaired water bodies. However, for about 77 to 86 percent of the lakes and flowing waters in Florida, there are not enough monitoring data to make an assessment. EPA assumed that all unassessed waters would be in compliance with the numeric nutrient criteria rule, which led EPA to underestimate the number of newly impaired waters.
For each sector of pollutant sources, EPA estimated the incremental cost of complying with the numeric nutrient criteria rule. The report concluded that EPA underestimated the incremental cost for the stormwater, agricultural, septic system, and government sectors. There is significant uncertainty in the EPA cost estimate for the municipal and industrial wastewater sectors, making it difficult to know whether the EPA under- or over-estimated the incremental cost in these sectors.
EPA's cost analysis would have been more accurate if it better described the differences between the new criteria rule and the narrative rule it would replace, and how the differences affect the costs of implementing nutrient reductions over time, instead of at a fixed time point. Timing was not considered in the EPA report, but in reality, the speed with which actual water quality benefits are observed is constrained by the time required to conduct necessary studies and implement load controls, and by available budgets and staff.
Comparing the rules over time also can provide an opportunity to present a realistic picture of how water quality improvement actions might unfold under alternative rules, by illustrating the time lags between listing and achievement of water quality standards. Most importantly, reporting on timing would provide useful information for predicting annual budgetary requirements.
If done correctly, EPA's analysis would have revealed that point sources of water pollution are going to face increased costs sooner under the numeric nutrient criteria than under the narrative process. How costs to nonpoint sources and water quality benefits would materialize under the different rules is uncertain.
Many assumptions are made in predicting administrative and load control costs over time, leading to uncertainty in cost analyses. This uncertainty—which can stem from such issues as a lack of knowledge about the cost of a relatively new technology, or about how implementation of the numeric nutrient criteria will be translated to effluent limits for point sources—was inadequately represented in the EPA analysis.
Conducting an alternative cost analysis, with increased attention to careful assessment of rule differences, stakeholder engagement, and uncertainty analysis, might not have been possible with the budget and time EPA spent on it cost analysis. Any critique of the existing EPA cost analysis should recognize that some deficiencies may be traced to time and budget limitations.

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