Open access renewable resources, urban unemployment, and the resolution of dual institutional failures

Ichiroh Daitoh, Nori Tarui

Research output: Contribution to journalArticlepeer-review

Abstract

This paper investigates how poverty reduction and natural resource preservation can be simultaneously achieved in a small open dual economy with urban wage rigidity, open access rural resources, and rural-urban migration. An increase in the export tax rate on the rural resource good increases urban unemployment in both the short run and the long run with resource dynamics. Given the institutional failures, the first-best policy is an urban wage subsidy combined with either a rural wage subsidy at a lower rate or, if the urban output price is sufficiently high, a rural tax. When the institutional failures can be resolved endogenously, an increase in the export tax on the resource good can induce rural institutional change away from open access. However, tariff protection of urban manufacturing hinders such a rural institutional change.

Original languageEnglish
JournalEnvironment and Development Economics
DOIs
Publication statusAccepted/In press - 2021
Externally publishedYes

Keywords

  • export tax on the resource good
  • institutional change
  • open access
  • renewable resource
  • rural-urban migration
  • urban unemployment

ASJC Scopus subject areas

  • Development
  • Environmental Science(all)
  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Open access renewable resources, urban unemployment, and the resolution of dual institutional failures'. Together they form a unique fingerprint.

Cite this