Skip to main content

Central America


Fuel tax incidence in developing countries: The case of Costa Rica

We use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica. We find that the effect of a 10 percent fuel price hike through direct spending on gasoline would be progressive, its effect through spending on diesel—both directly and via bus transportation—would be regressive (mainly because poorer households rely heavily on buses), and its effect through spending on goods other than fuel and bus transportation would be relatively small, albeit regressive. Finally, we find that although the overall effect of a 10 percent fuel price hike through all types of direct and indirect spending would be slightly regressive, the magnitude of this combined effect would be modest. We conclude that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.


Costa Rican transport policies: a stakeholder analysis

Costa Rica’s transport sector contributes to the aggravation of problems such as air pollution, vehicular congestion and traffic accidents that mainly affect the country’s urban areas. In this analysis, stakeholders associated with a key set of transport policies are identified and their roles in current and future policymaking are assessed.


The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable” Certification

Initiatives certifying that farms and firms adhere to predefined environmental and social welfare production standards are increasingly popular. According to proponents, they create financial incentives for farms and firms to improve their environmental and socioeconomic performance. This paper reviews the evidence on whether sustainable certification of agricultural commodities and tourism operations actually has such benefits.


Paying the Price of Sweetening Your Donation: Evidence from a Natural Field Experiment

Using a natural field experiment in a recreational site, a public good almost fully dependent on voluntary donations, the authors explored the crowding-out effect of gift rewards. First, they investigated whether receiving a map in appreciation of a donation crowded out prosocial behavior and found no significant effect of giving the map. Second, they explored the effect of adding the map to a treatment designed to increase donations. Interestingly, when the gift was combined with their attempt to trigger reputational and self image motives, the probability of donating decreased significantly, compared to the social reference treatment alone.


Research-policy dialogue improves drinking water management

“To do high-quality research, you need to find out what policy makers need and nurture the interaction,” says Maria Angelica Naranjo, EfD researcher in Central America. Her research colleagues Roger Madrigal and Francisco Alpízar are exploring why some Costa Rican communities are successful in drinking water management while others are not. Policy makers and local communities are already using some of the researchers’ recommendations to bring change.


Research helps save Costa Rica’s beaches

Unplanned, aggressive coastal development is threatening beautiful beaches. To help address one of Costa Rica’s most serious environmental problems, researchers from the Environment for Development initiative (EfD) are evaluating the performance and impact of a voluntary environmental regulation and certification initiative called the Blue Flag Ecological Program.


The effects of national parks on local communities’ wages and employment in Costa Rica

Despite of the clear global environmental benefits of increasing the amount of protected areas, how these conservation policies affect the well being of individuals in nearby localities is still under debate. Using household surveys with highly disaggregated geographic reference, this study explores how national parks have affected wages and unemployment in Costa Rica for the period 2000-2007.


To trade or Not to Trade: A Firm-Level Analysis of Emissions Trading in Santiago, Chile

The authors surveyed firms participating in emissions trading programs in Santiago, Chile, to explore further whether tradable permits are appropriate for transition and developing economies. Their survey information revealed serious implementation and design flaws in Chile’s trading, but they are not more severe than the EU or U.S. systems. Countries with similar income levels and institutional maturity as Chile should be able to develop well-functioning permit trading schemes.


Distributional equity of fuel tax in Costa Rica

Perhaps current prices of fossil fuels are the reflection of the hurricane's eye passing through the global markets. Before exorbitant oil prices again steal all the attention, it is important to analyze our policies on public and private transport management in general. And in particular fuel tax policies, which is here discussed by Francisco Alpizar, Rebecca Osakwe and Allen Blackman.


The Effect of Risk, Ambiguity, and Coordination on Farmers´Adaptation to Climate Change: A Framed Field Experiment

The authors used a framed field experiment with coffee farmers in Costa Rica after tropical storm Alma to explore how farmers react to different levels of risk to income and productive means from extreme weather under measurable and unmeasurable uncertainty. They also examined whether investment costs to reduce vulnerability exhibit economies of scope.


Conditional Cooperation and Social Group: Experimental Results from Colombia

There is growing interest in understanding whether behavior is the same across locations. By holding cross- and within-country dimensions constant (in contrast to previous studies on cross-group comparisons of conditional cooperation), the authors investigated cooperative behavior between social groups in the same location. Their results reveal significantly different cooperation behavior, suggesting that different social groups exhibit differences both in terms of composition of types and extent of conditional cooperation.


Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary

In developing countries, weak environmental regulatory institutions often undermine conventional command-and-control policies. As a result, these countries are increasingly experimenting with alternative approaches that aim to leverage nonregulatory “green” pressures applied by local communities, capital markets, and consumers. This article reviews three strands of the empirical literature on this trend.


User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower

National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems could be mitigated by replacing at least some government funding with direct contributions from individual environmental service users who have incentives to underwrite payments and who can ensure that they are targeted appropriately.


Strategies for adapting to climate change in Costa Rica

Read María A. Naranjo' opinion article (Estrategias de adaptación al cambio climático en Costa Rica) in "La Nación" (January 28th), related to the EfD Central America Project "Small Farmers' Determinants of Private Adaptation to Climate Change Strategies" (Spanish only).


Something more than building rural aqueducts

Read Francisco Alpizar’and Róger Madrigal’ opinion article (Algo más que construir acueductos rurales) in “La Nacion” (January 18th) associated with the EfD Central America Project: Decentralization in water resource management: exploring the determinants of success (Spanish only).


Don’t Tell Me What to Do, Tell Me Who to Follow!

Results indicate that visitors look at the behavior of others in deciding if and how much to donate, but partially reject being told what to do. Also, as the social reference moves farther away from average behavior, its effect on the typical visitor is diminished, leading to lower and less frequent donations.


Agroforestry Price Supports as a Conservation Tool: Mexican Shade Coffee

Economic policies that boost profits from agroforesty, thereby creating financial incentives for land managers to favor these systems over less environmentally friendly land uses, could, in theory, have ancillary environmental benefits. This paper analyzes primary and secondary data to determine whether a voluntary price support program for Mexican coffee-mostly grown in shaded systems that supply important ecosystem services- has had such "win-win" benefits by stemming land-use change in the coffee sector.


Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile

Santiago was one of the first cities outside the OECD to implement a tradable permit program to control air pollution. This paper looks closely at the program’s performance over the past 10 years, stressing its similarities and discrepancies with trading programs in developed countries, and analyzing how it has reacted to regulatory adjustments and market shocks. Studying Santiago’s experience allows us to discuss the drawbacks and advantages of applying tradable permits in less developed countries.


Environmental Policy, Fuel Prices, and the Switch to Natural Gas in Santiago, Chile

The author analyzes the role of environmental policies and energy cost savings in the switch to natural gas by stationary sources in Chile. There is skepticism about using market-based policies (economic instruments) in the developing world—permit trading programs versus emissions fees. This paper produces new evidence of the role of environmental regulations and market forces in a successful air-quality improvement program in Chile, a less-developed country.


Taxes, Permits, and the Diffusions of a New Technology

The author looks at the effects of the choice between taxes and permits on the pattern of adoption of a new emissions abatement technology. The regulator determines the optimal ex-post amount of emissions before firms start to adopt the technology. Each firm decides when to adopt, considering benefits, costs, and advantage gained over their rivals, producing a sequence of adoption that is “diffused” into the industry over time.