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Commentary on ‘The economics of landmine clearance: case study of Cambodia’
Author(s) -
Paterson Ted
Publication year - 2001
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.751
Subject(s) - yield (engineering) , economics , value (mathematics) , net present value , present value , agricultural economics , microeconomics , finance , production (economics) , statistics , mathematics , materials science , metallurgy
A recent cost‐benefit analysis of landmine clearance in Cambodia (Harris, JID 12 (2), 2000) reported a net present value (NPV) of minus $3,434 million, and concluded landmine clearance using existing technologies is not economically justified for Cambodia. Professor Harris suggested higher returns would accrue to investments in de‐mining technology, while aid funds for landmine clearance should be reallocated to meet other development objectives. However, the methodology used massively overstates the present value of de‐mining costs while the estimated benefits are far too low. More fundamentally, the specification of the model makes it suitable only for an ‘all‐or‐nothing’ decision whether to rid Cambodia entirely of landmine contamination, and does not allow the analysis of targeted clearance of priority land. With appropriate adjustments, the economics of landmine clearance in Cambodia are not bleak, and may well yield positive rates of return in NPV terms. Copyright © 2001 John Wiley & Sons, Ltd.