School of Geography - Theses

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    Environmental policy and orthodox economics: a case study of Victorian solid waste
    Pickin, Joseph ( 2007)
    In this thesis I use the idea of 'rational ideologies' to investigate the value and role of orthodox economics in solid waste policy in Victoria, and its relationship with a dominant set of policy ideas that I call industrial ecology. I show that many orthodox economists criticise industrial ecology and prescribe alternative policies based principally on market-based instruments (MBIs) and cost-benefit analysis (CBA) with environmental valuation. They largely ignore the economic underpinnings of industrial ecology. I report on four empirical research projects. Firstly, I investigate the influence of unit-based pricing of domestic garbage in Melbourne on garbage quantities. I find its effects trivial except where rates were set at levels higher than orthodox economic theory would suggest is appropriate. Home owners have reduced garbage for non-economic reasons. Secondly, I compare 37 cost-benefit studies of recycling, revealing enormously varied approaches and results that are often apparently infused by analyst ideology or sponsor interests. Rather than the hard rationality it seems to promise, CBA with environmental externality valuation diverts debate into complexities that are the preserve of experts. The ideological foundations of some orthodox economic interpretations of environmental issues are shown to be weakly supported by theory or logic. Thirdly, I review the history of Victorian solid waste policy since 1970. As an early pollution crisis was overcome, the agenda shifted to waste minimisation. Regulation, corporatist agreements, targets and strategies have helped to level off the quantity of waste to landfill and grow post-consumption recycling into a major industrial operation. Costs have risen substantially but public support remains strong. Industry, local government and environment groups have competed for influence in the policy arena. While waste management has been transformed into a competitive market structure, orthodox economics has played only a small role in the policy history. Where CBAs have not be desultory they have failed to resolve policy disputes. Use of MBIs has been beset by administrative and sunk-cost concerns. Finally, I report on a survey of 46 members of the solid waste policy community on the economics of solid waste. There is a surprisingly high degree of in-principle acceptance of orthodox economics conceptions of the environment, such as CBA, environmental valuation and MBIs. There is more disagreement over resource efficiency,, recycling targets and interpretation of the value of economic tools in practice. Variation in views is linked with professional grouping more than economics education. There is strong support for the economic underpinnings of industrial ecology. I suggest that environmentalists' simultaneous acceptance of orthodox economists' intellectual framework yet rejection of their prescriptions demonstrates the practical weakness of that framework but also represents a latent danger to environmentalism. In concluding, I interpret orthodox economics as a rational ideology that is blind to its ideological content. I argue that this blindness has led to overconfidence, inflexibility and overambition, and that these characteristics have marginalised orthodox economics in Victorian solid waste policy. I argue for analytical plurality and the supremacy of political judgement.
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    Sustainable microfinance and poverty alleviation : understandings of small farmers in rural Nepal
    Acharya, Yogendra Prasad ( 2006)
    Microfinance, as a tool for rural development, is one of the most important sectors of financial services for the rural poor in the developing countries. However, a high credit default rate is a worldwide problem that is particularly pronounced in the developing countries. Credit providers in developing countries have generally experienced serious financial problems since the late 1970s due to a constant high credit default rate and consequent loss on loans. Microfinance for the poor is one of the major grassroots initiatives in rural development in Nepal. However, the high credit default rate amongst small farmers has seriously questioned the small farmers' sense of ownership and commitment towards the sustainability of microfinance institutions at the local level. Institutional sustainability of a microfinance institution is heavily dependent on the repayment rate of loans, but the actual repayment of loans largely depends on how the small farmers understand and engage with institutional credit. Very little research has been conducted into the views of the supposed beneficiaries of microfinance schemes, that is, the small farmers. This thesis, based on extensive field research amongst the small farmers of the Chitwan district of Nepal, examines and documents their understandings of credit, what sustainable microfinance means to them, why there is a high rate of loan defaults (on average more than 60%), and other related issues. My research revealed that the small farmer-managed microfinance institutions were not able to achieve the required repayment rate level due to the imposition of a local bureaucratic framework dominated by internal social differences and with totally different expectations between lenders and borrowers. The results indicate that the understandings of the terms `credit' and `sustainability' differ substantially between the loaning institutions and small farmers. This thesis argues that the divergence in views, interests, and perspectives between bankers and policymakers on the one hand, and the small farmers on the other, explains why microfinance programs will continue to struggle to fulfil their mission of poverty alleviation and sustainability. The study reveals that low incomes amongst small farmers and their understandings about credit are the key factors responsible for high credit default. In conclusion, the findings in this study demonstrate that unless governments and lending institutions understand how small farmers interpret the terms `credit' and `sustainability' there will be no mutually favourable outcomes. Providing small farmers `credit' without other inputs such as training and education, infrastructure and support services, marketing facilities and an appropriate pricing policy simply burdens them with increasing debt. The findings from this study will help the government and lending institutions in understanding better the views held by small farmers, and will hence ensure more effective delivery of credit to the poor and others in need of financial services in rural Nepal.