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AbstractDoes the availability or variability of water matter for the economy? Does it meaningfully impact the growth and development trajectory of a country? It may seem surprising that answers to these most basic of questions remain elusive. The aim of this paper is to summarize recent work on the economic impacts of water scarcity and variability. The paper finds that there is strong evidence that variations in rainfall and water availability have significant impacts on particular sectors, such as agriculture, human capital, and even conflict. But paradoxically evidence of impacts on economic growth and other measures of aggregate economic activity remains ambiguous. The paper explains reasons for this anomaly and explores the pathways through which water impacts the economy. The paper provides a synthesis of key developments in the literature, identifies methodological gaps, and suggests policy solutions.

Environmental regulations typify a large class of activities in the public sector where government agencies are required to monitor the degree of compliance. These tasks are usually delegated to bureaucrats who, as self-interested agents, may engage in corrupt behavior. Such problems abound, particularly in developing countries, where corruption is regarded as one of the major causes of environmental degradation. This paper investigates the implications of corruption for the optimal design of environmental regulations and analyses the interaction between the prosecution rate, monitoring rate, and fines. It is shown that even if corruption can be deterred the fact that it may occur substantially impedes the ability of a regulator to control environmentally degrading activities.

Recent empirical work suggests that declining industries lobby more successfully for policy concessions than do growing industries. This paper presents a novel and simple explanation for this phenomenon. It is shown that an industry in decline is constrained in its ability to raise revenue through production and therefore has a greater incentive to protect profits by lobbying for more favourable treatment. However, greater lobbying only translates into policy concessions if government policy is sufficiently responsive to lobby group contributions. The paper further explores the circumstances under which such government behaviour is likely to eventuate. We show that a self‐interested government will always be more receptive to the demands of lobbyists in declining industries.

Abstract
A puzzling piece of empirical evidence suggests that resource-abundant countries tend to grow slower than their resource-poor counterparts. We attempt to explain this phenomenon by developing a lobbying game in which rent seeking firms interact with corrupt governments. The presence or absence of political competition, as well as the potential costs of political transitions, turn out to be key elements in generating the 'resource curse.' These variables define the degree of freedom that incumbent governments have in pursuing development policies that maximize surplus in the lobbying game, but put the economy off its optimal path.

There is a growing evidence that political corruption is often closely associated with the rent seeking activities of special interest groups. This paper examines the nature of the interaction between the lobbying activities of special interest groups and the incidence of political corruption and determines whether electoral competition can eliminate political corruption. We obtain some striking results. Greater electoral competition serves to lessen policy distortions. However, this in turn stimulates more intense lobbying which increases the scope of corrupt behavior. It is shown that electoral competition merely serves to alter the type of corruption that eventuates, but cannot eliminate it.

There is a vast literature on the causes and consequences of corruption. A common theme is the belief that countries which exhibit a low level of political competition are more likely to have higher levels of corruption. The model presented here examines the effect of corruption on environmental policy under varying degrees of political competition. An important feature of this model, which has received far less attention in the literature, is that corruption may occur at different levels. A polluting firm attempts to reduce the amount of an environmental tax it pays by bribing a low level bureaucrat to make no reports regarding emission levels. In addition, it also makes contributions to the incumbent and rival parties of government in order to influence key policy parameters. The model thus provides a picture of the relationship between political competition, environmental outcomes and the type of corruption which may be observed. It is shown that higher levels of political competition result in more stringent regulations and better environmental outcomes. Political competition also has the capacity to reduce both grand and petty corruption, however, this is not assured. The model also suggests that polluting interests may have an incentive to corrupt opposition parties in order to weaken their political position. This may lead to policy convergence even when political competition is strong. Political competition is indicated as a necessary but not sufficient means by which to combat corruption.

Abstract.  When countries share access to a common resource stock, optimal management is based on strategic considerations. We develop a general equilibrium model and show that regulatory policies are strategic substitutes under autarky. Trade liberalization not only changes relative prices, but may change the qualitative nature of the game between jurisdictions. In the small country case with exogenous prices, regulatory policies become strategic complements. In the context of a two‐country model, policies remain strategic substitutes but the factors that drive policy changes differ from those under autarky and the small country case. The implications for conservation and resource management are discussed.