Book reviews 137

In the book’s final chapter, Putterman integrates his incentive-theoretic

analysis with the broader political-economy literature on the failure of
collective production in ujamaa villages. It is interesting reading and well
makes the point that proponents of collective agriculture can cripple
collective production possibilities by imposing institutional arrangements
which destroy individual incentives to contribute to collective activities.
Results from the zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFED
ujamaa data set are put forward to show that incentive
variables do affect the success of collective activity. Putterman attributes
much of the failure of collective production in Tanzania, which is reflected
in extremely low yields in the collective sector, to anti-incentivist policy.
Putterman’s message to both proponents and opponents of collective agricul-
ture is that collectivism can work if (and only if) it is in the instrumental
interests of individuals.
In summary, the Putterman book has much to recommend it. It argues
both that collective agriculture is abstractly desirable and that it has been
crippled in practice by faulty implementation and ‘anti-incentivism’.
Somewhat confusingly, the Tanzanian experience is used to illustrate both
points. Many readers will wonder whether the ill effects of bad policy suffice
to explain the productivity gaps observed between private and collective
sectors in Tanzania, or whether Putterman’s analysis has understated the
problems of collective action. These criticisms not withstanding, Putterman’s
book is a valuable addition to the literature. Its theoretical framework is a
sophisticated and useful addition to the literature on labor management and
collective choice. Perhaps most importantly Putterman systematically and
cogently challenges us to rethink the unimodal consensus. Unfortunately his
challenge is contained in a book which in parts is perhaps too technical to
appeal to area studies and policy specialists, and in others is apparently too
narrowly focused on Tanzania to attract the attention of theoreticians.
However, both groups would be remiss to pass by this book and ignore its
challenge to the conventional wisdom on agrarian structure and organization.

Michael R. Carter
University of Wisconsin-Madison, WI

Allan V. Kneese and James L. Sweeney, eds., Handbook of Natural Resource

and Energy Economics, Vol. II (North-Holland, Amsterdam, 1985) D.fl.
215.00.

Volume II of the Handbook of Natural Resource and Energy Economics

deals with the economics and management of renewable resources. The
literature pertaining to the management of water, land, forests, fisheries and
outdoor recreation areas is treated in six self contained chapters. Most of
 138 Book reviews

these chapters are organized by a section that discusses the characteristics of

the resource which justifies a separate treatment of it in the literature,
followed by several sections that outline recent developments in the field,
with a concluding section that summarizes and suggests areas for further
research.
As outlined in the preface to the volume, the handbook is intended to
provide a working survey of the area, one which is accessible to trained
economists, and one which could be used in a graduate field course. Most of
the chapters in this volume are suitable for that purpose. Overall, I found
that the material in the volume is clearly presented and documented. The
level of analysis presented in the volume varies from being rudimentary to
being rather advanced. Most well trained students can avail themselves of
the material with a reasonable amount of effort.
Let me comment in some detail on four of the chapters in the handbook.
Chapter 12, entitled ‘Multiple Use Management of Public Forestlands’, by
Michael Bowes and John Krutilla, provides a concise and very ‘user friendly’
treatment of optimal harvesting policy. Their analysis starts with a statement
and solution to the classic Faustman problem. More complicated policies are
then characterized which involve selecting optimal harvesting rotation, when
the forest provides multiple products and services including timber, environ-
mental amenities and outdoor recreation. By their nature, these policies are
quite complicated, but the treatment by Bowes and Krutilla renders every-
thing quite manageable and intuitive. I plan to use this chapter in my own
graduate resource course.
Chapter 13, entitled ‘Land Resources and Land Markets’, by Alan Randal
and Emery Castle, treats land as a durable asset. The price of land is
determined by the present value flow of services it provides over time.
Alternative theories of land use due to Ricardo and Thunen are presented.
The chapter is most valuable for its mathematical treatment of the bid rent
function approach. This was my first exposure to this material, and I found
that it was quite clearly presented. Another interesting feature of the chapter
is the analysis of land pricing to account for capital gains, price inflation and
capital gains taxations. This discussion relies on the efficient market hypo-
thesis to generate pricing formulae for land assets.
Chapter 14, entitled ‘The Economics of Fisheries Management’, by Gordon
Munroe and Anthony Scott, is the most ambitious of the chapters in the
handbook. The optimal management of commercial fisheries is characterized
using modern control theoretic techniques. Much of the work surveyed is
original to the authors, and the presentation of material, some of which is
rather technical, is excellent. The material presented varies considerably in its
scope and sophistication. The chapter contains something of interest for all
readers ranging from the advanced undergraduate student through the
seasoned fishery economist. I particularly benetitted from reading the
 Book reviews 139

material dealing with optimal management under uncertainty, and with the
regulation of capital inflow and outflow from the fishery. Most of the
chapters in this volume are rather ‘thin’ in their treatment of major policy
issues affecting the use of resources. An exception to this is the discussion by
Scott and Munro of policies designed to ameliorate the common property
problems associated with commercial fisheries.
The only chapter in the volume that deals primarily with empirical issues
of resource management is Chapter 15 by Kenneth McConnell entitled ‘The
Economics of Outdoor Recreation’. McConnell surveys the various ingenious
approaches which have been utilized to establish the demand for outdoor
recreation areas and services. Such demand information is needed to make
policy decisions regarding the preservation of these areas. Unfortunately,
since outdoor recreational services are not commonly traded in well defined
markets, it is not easy to estimate demand. McConnell explores the various
methods for estimating demand including the travel-cost method, contingent
valuation, and the household production-hedonic price approach. The
discussion focuses on the practical difficulties and problems involved in
collecting and interpreting the data and doing the estimation.
All the chapters that I have mentioned provide a selective survey of
material, which enables the reader to become reasonably well acquainted
with certain main developments in the field. In contrast to this the chapter
by Young and Haveman presents a comprehensive survey of water manage-
ment. I find this chapter is somewhat less useful as a learning and teaching
device, though it provides an excellent source of references for those
researchers working in the water area.
The volume stresses discussion of normative management techniques.
There is little mention of positive theories of environmental and resource
policy. One exception to this is the chapter co-authored by Goldman and
Tsuru who assess the management of resources and environmental policy in
the Soviet Union and in China. The authors explore how different social and
political systems, as well as different levels of development and prosperity are
likely to affect resources and environmental policy.
My overall assessment of the volume is that it does touch upon most of
the important recent developments in literature on the economics of re-
newable resources. All of the chapters are done competently and the material
is suitable for advanced students and trained economists. Furthermore, the
handbook should serve as a useful reference for people working in the
resources environment field.

Tracy R. Lewis
University of California, Davis, CA