This case focuses on the challenges of the public provision of high-quality water in Hungary, a high-income, former Eastern Bloc country that has been a member of the European Union since 2004. It struggles with chronic groundwater arsenic contamination. At the Darden School of Business, this case is taught in the second-year elective, "Global Economics of Water," in a public policy module that covers two topics: supplying water for the public and water markets. It is taught alongside "Deadly Wells in Bangladesh" (UVA-GEM-0158), to compare and contrast Hungary's arsenic contamination issues and solutions to those of Bangladesh, a lower-middle-income country and one of the most populated in the world.
Steven Erickson, cofounder of the hedge fund Anbec Partners, is trying to determine whether the all-cash offer D.R. Horton has just made for Vidler Water Resources, Inc. (Vidler) is a fair value for Vidler. Vidler's most valuable project is the Fish Springs Ranch pipeline, which was developed to supply water to fast-growing Reno, Nevada. Reno is in Washoe County, which shares water from the Honey Lake aquifer with Lassen County, California. This case presents a history of Reno's water projects, an overview of water regulation and the prior appropriation system in the western United States, and the development of Vidler. There is significant opposition to the Fish Springs Ranch pipeline from California and the Pyramid Lake Paiute Tribe. The case delves into the legal battles and the financial risks and rewards of Vidler's investments, and ultimately is a discussion of the challenges of investing in water. At the Darden School of Business, this case is taught in the second-year elective, "Global Economics of Water." It fits in the policy module that deals with pricing water, which is a necessary condition for addressing the current water scarcity challenges, at least in water-scarce industrialized countries. The discussion of Reno follows a session on water markets in Australia, and how these have been installed in response to the ongoing droughts there. Needless to say, the case can be taught on its own; it is especially suitable for classes about the water rights system of the western United States, and more broadly, for those about investing in water.
The case, "Suez and Veolia in Hot Water," takes the merger between Suez and Veolia, the two largest global water and waste multinationals, as a starting point and puts it in the context of the ongoing discussion in France (and elsewhere) about remunicipalizing utilities, especially water and wastewater. The broader background of the case narrative constitutes, on the one hand, the water infrastructure crisis in many advanced countries, and, on the other, the challenges the water sector faces due to climate change. The emphasis of the case discussion is on the economic analysis of private-public partnerships (PPPs). These partnerships between the public and the private sectors are not trivial in the context of water infrastructure, especially because water utilities tend to be natural monopolies and because water is a good that has both a private and a public dimension. Suez and Veolia in Hot Water" is taught at the Darden School of Business in the MBA "Global Economics of Water" course. The case belongs in the policy module, which follows cases about and discussion of the global and climate-change context of water. The policy module focuses on water utilities and water markets. The case can also easily be taught on its own, as it deals with PPPs, which have been receiving quite a bit of attention lately.
Immigration is a powerful force shaping a country's population, and a nation's immigration policy often reveals who is welcome and who is not. "US Migration in Four Acts" offers an overview of migration to the United States and focuses especially on two major laws that have defined US migration policy. First, the 1924 Johnson-Reed Act became law toward the end of the mass migration that began in the 19th century. It imposed different immigration quotas for individual countries, restricted immigration from southern and eastern Europe, and, in effect, excluded it from Asia, Africa, and the Middle East. Second, the 1965 Immigration and Nationality Act, which has in essence remained unchanged, sought to impose a global cap on immigration and more uniform maximum quotas for individual countries. The case puts migration policies in the historical context of evolving US society, welfare policies, and race relations. It also offers theoretical approaches and models of immigration to assess those policies. At the Darden School of Business, this case is taught in the last module of the elective course on globalization, Managing International Trade and Investment.
With frequent water main breaks, leaking pipes, and lead contamination, the water infrastructure of many countries is in bad shape, and improvements are urgent in light of climate change and increasing water stress. Discussion in recent years has focused on the role of private companies in a sector that has traditionally been in public hands. Since the privatization of the United Kingdom's water infrastructure in the late 1980s, a whole range of novel modes of cooperation have been identified, from 100% private to 100% public ownership. This note focuses on the economics of public-private partnerships (PPPs). PPPs offer a contractual approach to the delivery of infrastructure goods and services that are typically provided by the public sector or by heavily regulated private operators such as public utilities. They tend to involve relatively long-term contracts, in which the public sector shares some decision-making authority and property rights with private companies. This overlap of ownership and decision-making powers between the public authorities and private operators is both the appeal and the challenge of water PPPs.
When left unattended, natural resources tend to inch toward depletion, overuse, spoilage, or pollution. Common pastures get overgrazed; lakes are overfished; rivers are polluted, and so on. In the case of water, some may wonder how overuse or depletion is possible, as water is a renewable natural resource. In spite of this, depletion and overuse can occur in a practical sense and on a local level. The reasons for this overuse are often related to the "tragedy of the commons," a situation where individual users of a common resource pursue their self-interest without coordination and thus behave collectively in ways that are not optimal for the resource as a whole. This note explores the concept of the tragedy of the commons in relation to water, considering especially the implications of water's status as an unprotected open-access resource.
A primary requirement for managing water effectively and sustainably is an accounting framework that registers the water that is available for use (supply) and the water that is being used (demand). A common accounting analogy is a water budget, or a water account. This note focuses on the water budgets of individual countries, defining concepts including renewable water, watershed, water withdrawal, water consumption, and dependency ratio. The note also includes data on the water budgets of Myanmar and Egypt.
This case allows instructors to lay out the challenges of providing universal access to safe drinking water in some developing and emerging countries-one of the current UN development goals. The challenge across developing countries is to find long-lasting and sustainable solutions, and to realize that present answers to the challenge may be a far cry from these criteria. The discussion aims to address the complex and multifaceted nature of water supply in developing countries, and to emphasize that many of the assumptions made in advanced economies may not apply. The aim is to search for the best (long-lasting and sustainable) solutions, admitting there is no silver bullet, even though some alternatives are clearly better than others.
With an ever-growing world population, rising living standards, pollution, and climate change's uncertain weather patterns, it became almost a platitude that "the previous war was about oil, the next war will be about water." Of all water-related situations that might lead to war, the Nile basin tension was probably most likely to escalate. In the early 2000s, Ethiopia conceived a plan to build the Grand Ethiopian Renaissance Dam across the Blue Nile, close to its border with Sudan, straining relations with downstream Egypt and Sudan. Could such smoldering tensions over water in a region with a history of conflict lead to war? This case is part of the "Global Economics of Water" course, a second-year elective for MBA students at the Darden School of Business. The case would also fit in any class that focuses on natural resources or international relations. It is used as an introduction to the water topic, as it touches upon some key aspects of water stress and the world's current water challenges.
In September 2009, President Barack Obama announced a hefty tariff on low-cost automobile and light truck tires imported from China. Earlier that year, the United Steelworkers of America, which represented workers in many US tire production plants, had filed for protection under Section 421 (the "China safeguard") of the US Trade Act of 1974. Supporters of the decision saw the tariff on Chinese tires as an extension of the president's efforts to enhance the enforcement of trade laws, the position Obama had adopted time and again as a candidate in 2007. Could the tire safeguard provide a template for how policymakers could protect American workers?
Supplement to case UV7541. In September 2009, President Barack Obama announced a hefty tariff on low-cost automobile and light truck tires imported from China. Earlier that year, the United Steelworkers of America, which represented workers in many US tire production plants, had filed for protection under Section 421 (the "China safeguard") of the US Trade Act of 1974. Supporters of the decision saw the tariff on Chinese tires as an extension of the president's efforts to enhance the enforcement of trade laws, the position Obama had adopted time and again as a candidate in 2007. Could the tire safeguard provide a template for how policymakers could protect American workers? The B case provides an epilogue.
When proposing new or modified economic policies, it is important to understand the distributional implications of such policies. Do they potentially affect everyone in the same way? Or can we expect different impacts for different segments of the population? The specific factors model is a canonical model that is very well suited to address distributional questions related to a range of economic policies, as it distinguishes multiple sectors in the economy that each employ a different mix of production factors (such as labor and capital). This technical note focuses on applications of the specific factors model to international trade policies; toward the end it also explores how the model might be useful in other settings. At Darden, this note is used in the second-year International Trade elective; a variant of the same model is taught in the Global Economics of Water elective. It would also be suitable in courses covering short-, medium-, and long-run analyses of economic policy.
In 2017, it was a challenge to assess the future of global trade. It was an open question whether the US financial crisis and the recession that it triggered would mark a turning point for the liberal post-World War II world order. If one looked toward Europe, China, Latin America, and Japan, there was a flurry of activity. New trade agreements were being completed and pursued. In Washington, DC, on the other hand, President Donald Trump seemed set on ripping apart and/or renegotiating any trade deal the United States was ever part of. This case explores Trump's opinions and emerging policy stance on trade, bilateralism, and the global economy, among others. It also gives an overview of the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) and asks whether the Trump presidency would constitute a major challenge to the WTO and what it stood for in 2017.
This note provides a few basic facts about the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). We also investigate why we need those institutions from an economic perspective. In other words, we seek to understand what problems the GATT/WTO solve, and why without them the trade liberalizations that they seek would not emerge.
This note argues that it is hard for private institutions to provide the public goods that the government provides. In other words, there will tend to be an under provision of public goods if private institutions provided them. The explanation this note provides hinges on the very nature of what public, as opposed to private, goods are.
Corporate social responsibility (CSR) refers to the voluntary decision of companies to address social and environmental concerns by contributing to a public good, reducing external costs, and increasing fairness or distributional equity. CSR is looked at from an economic point of view, focusing on environmental and natural resource issues with a particular emphasis on water. The term CSR is first clarified and contextualized before being situated in the economics literature. This note studies CSR from an economic angle, and looks at how it is in line with economic incentives. It focuses on: (1) the extent to which there is a need for CSR in terms of the characteristics of the economic environment that make CSR policies effective; and (2) how CSR policies interact with firms' operations and profit maximization. This technical note supports cases in the Darden course elective, "The Global Economics of Water."
When the Rio Tinto mining company decided to increase its output of iron ore by 25% in its Marandoo location, it had to deal with an unexpected problem: an excess of water in the deep reaches of the mine. Because freshwater is a scarce resource in this region of Australia, Rio Tinto's challenge was to come up with a comprehensive water strategy for the region. This case is used in Darden's "Economics of Water" course elective.
In 2014, the Kingdom of Saudi Arabia faced a freshwater shortage. Despite the global financial crisis, Saudi Arabia experienced modest economic expansion and increasing stress on its water infrastructure due to expanding agricultural production. The major investments in desalinization plants that the country expected to see had not yet materialized, furthering the strain on resources. This case, used in Darden's "Economics of Water" elective, examines what policy reforms should be explored in bringing Saudi Arabia's water use and agricultural production into balance.
The Nature Conservancy (TNC) was one of the largest conservation organizations in the world; its mission was to "to conserve the lands and waters on which all life depends." Over time, TNC had expanded its mission to include advocating for sustainable water-management practices, and its numerous water specialists had advised corporations, water ministries, legislatures, and many other organizations. TNC was constantly exploring new ways of advocating sustainable water use and weighing its options to engage new opportunities. Brian Richter, a veteran scientist for TNC who had led its water market strategy for the past few years, was convinced that water markets could be attractive for the market-friendly TNC. But he wondered how TNC could integrate water markets into its water strategy while staying true to its legacy and mission. This case includes an interview with TNC's Brian Richter about some of the tools TNC had at its disposal to realize its conservationist objectives.