Policy: October 2008 Archives

The Role of Economics in Policy Making

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Australia has a salinity problem - scientists there predict that one third of agricultural land in Western Australia will be affected by dry land salinity over the next century; currently the figure is about 10 percent. Australia has spent billions of dollars on their salinity problem over the last 20 years, yet progress remains slow (for a brief analysis of salinity programs, see Pannell and Ridley 2008). One reason (among many) for the lack of success was that the funds were spread thinly and non-strategically among farmers. Although the allocations were socially and politically attractive, they were not technically and economically efficient. In addition, there was a presumption that farmers would adopt land management options that could address salinity regardless of how those practices might affect their bottom line.

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