The Economics of involuntary resettlement: questions and challenges/ edited by Michael M. Cernea.

1. Why Economic Analysis Is Essential to Resettlement: A Sociologist's View Michael M. Cemea 5
Editor's Note 5
Insularity versus Partnership 6
Social Knowledge about Resettlement: Recent Progress
Economic Knowledge: The Challenges Ahead 8
Brief Review of the Economic Literature 10
Perverse Effects of Insufficient Economic Analysis 13
The Anatomy of Impoverishment:
Risks, Safeguards, and Recovery 15
Risk Analysis and Behavioral Risks 15
Impoverishment Risks to People 16
Limitations of the Cost-Benefit Method 19
Underfinancing of Recovery and Development 22
The Promise of an Economics of Recovery 24
Priority Economic Research Areas 24
Additional Lines of Argument 25
Social Contributions to Economic Analysis 26
Appendix. Brief Overview of the State of the Art
in Social Research on Involuntary Resettlement 28
Intensive, "Thick" Knowledge 30
More Extensive Knowledge 30
111
iv The Economics of Involuntary Resettlement
From Description to Prescription 32
Policy Formulation 33
Measurements and Quantification 34
New Theory and Models 35
Resistance to Displacement 35
Acknowledgements 36
References 38


2. Methodological Issues in the Economic Analysis
for Involuntary Resettlement Operations
David W. Pearce 50
Editor's Note 50
Conclusions from Past Resettlement Experiences 52
Does Resettlement Differ from Other Project
Externalities? 54
Issues in the Economics of Resettlement 55
Avoiding Involuntary Resettlement 55
Property Rights 57
The No-Worse-Off Criterion 58
Full and Proper Compensation 59
Financing Resettlement 71
The Policy Context 72
Resettlement and Project Rates of Return 73
Guidelines for Gathering and Analyzing Economic
Information for Resettlement 73
References 79


3. Comparing the Economic Planning for Voluntarv
and Involuntary Resettlement John H. Eriksen
Editor's Note 83
Programmatic Characteristics of the Projects 86
Bank Financial Participation in Resettlement 87
Relationship between Scale and Success 87
Average Cost of Resettlement per Participant 89
Duration of Resettlement Operations 93
Use of Bank Resources for Resettlement 94
Nature and Quality of Baseline Surveys 96
Quality of Resettlement Plans 97
ifferences among Implementing Agencies 99
83
Contents v
Resettlers' Participation in Decisiortmaking 106
Accuracy of Cost Projections 107
Inclusion of Transition Costs and Grants 108
Agricultural Characteristics of the Projects 109
Analysis of the Resource Base 109
Appraising Sources of Household Income 110
Participant Selection Criteria 111
Range of Income-Generating Options 112
Farm Models Envisaged 112
Allocation of Land Holdings: Size, Criteria,
and Land Tenure 113
Types of Infrastructure Provided 114
Sources of Resettlement Services 115
Degree of Risk Assessment 115
Conclusions and Recommendations 116
Appendix. Characteristics of the Agriculturally Based
Resettlement Projects Surveyed 121
References 145


4. Economic Dimensions of Urban Resettlement:
Experiences from Latin America Maria Clara Mejta 147
Editor's Note 147
Overview of Urban Displacement and Resettlement
in Latin America 149
Magnitude of Urban Population Displacement 149
Causes and Rationale for Involuntary Displacement
in Urban Areas 150
Specific Conditions in the Urban Context 152
Economic Issues in House Replacement Alternatives 155
Land Titles and Property Compensation 155
Monetary Compensation 156
Socioeconomic Development 156
Subsidized Solutions versus Partial Payment 157
Housing Replacement Alternatives 158
Socioeconomic Profile of the Affected Population 162
Economic Reconstruction and Participation 164
Principal Difficulties in Planning and Implementation 166
Planning 166
Implementation 167
Legal Difficulties 169
Economic Difficulties 170
vi The Economics of Involuntary Resettlement
Relocation Impacts on Income-Generating Activities 176
New Challenges and Practical Recommendations 179
Preparation 181
Implementation 184
Acknowledgements 186
References 187


5. Testing the Risks and Reconstruction Model on India's
Resettlement Experiences Lakshman K. Mahapatra 189
Editor's Note 189
Conceptual Frameworks and Theoretical
Perspectives 191
Stages of Resettlement and Rehabilitation 192
The Impoverishment Risks and Reconstruction
Model 193
The Social Actors in Resettlement 196
The Economics of Resettlement: Missing Research
in India 198
Impoverishment Risks and Social Exclusion 201
Landlessness 201
Joblessness 203
Homelessness 204
Marginalization 205
Increased Morbidity and Mortality 206
Food Insecurity 207
Loss of Access to Common Property 208
Social Disarticulation 209
Loss of Education 211
Reconstructing the Livelihoods of Resettlers 213
Countering Landlessness and Joblessness 213
Moving from Homelessness to House
Reconstruction 215
Reconstructing Living Communities 216
From Hunger and Morbidity Risks to Adequate
Nutrition and Better Health Care 218
From Educational Loss to Educational Restitution 218
Institutional Mechanisms for Rehabilitation 219
Acts and Policies Are Not Enough 220
Conclusions: Unfinished Tasks 221
NGOs and Civil, Society 223
Central and State Governments 224
Contents vii
Acknowledgements 226
References 226


6. Sharing Project Benefits to Improve Resettlers'
Livelihoods Warren A. Van Wicklin III 231
Editor's Note 231
Arguments for Sharing Benefits 233
National Policy Provisions for Sharing Benefits 237
A Typology of Project-Level Benefit Sharing 241
Irrigation 241
Electricity 242
Fishing 242
Transport 243
Employment 243
Housing 247
Access to Improved Infrastructure 248
Replicating Good Practices in Benefit Sharing
for Income Recovery 249
Acknowledgements 252
References 252
About the Cohtributors 257
Boxes
2.1. Contingent Valuation and Loss Aversion 68
2.2. Negotiating Compensation in China 70
2.3. Contingent Valuation in Madagascar 70 '
2.4. A Revised Pro Forma for Assessing Resettlement
Costs 74
6.1. Financing Separate Projects for Resettlement 238
6.2. Enabling Reservoir Displacees to Benefit from
Irrigated Command Areas 240
6.3. Diverting Benefits Away from Resettlers 244
6.4. Coal Companies That Employ People Whose
Land They Acquire 246
Tables
3.1. World Bank Financial Participation in Involuntary
and Voluntary Resettlement 88
viii The Economics of Involuntary Resettlement
3.2. Characteristics of the Paired Involuntary
and Voluntary Resettlement Projects 90
3.3. Comparison of Effective Length of Projects
with Resettlement Operations 93
3.4. World Bank Staff Inputs in Involuntary
and Voluntary Resettlement Projects in Staff
Weeks and by Skill Mix 94
3.5. A Comparison of the Design and Management
of Involuntary and Voluntary Resettlement 118
3A.1. Resource Base 122
; 3A.2. Household Income 124
3A.3. Type of Resettlement Undertaken 126
3A.4. Range of Resettlement Options 128
3A.5. Type of Farm Model Envisaged 130
3A.6. Size of Land Holding Allocated 132
3A.7. Criteria for Land Allocation 134
3A.8. Conditions of Land Tenure 136
3A.9. Type of Infrastructure Provided 138
3A.10. Source of Resettlement Services 140
3A.11. Type of Risk Assessment 142
3A.12. Restriction Placed on Settlers 144
4.1. Population Displacement in Selected Urban
/ Development Projects 151
4.2. Compensation Alternatives Offered to the
Displaced Population 158
4.3. Housing Alternatives 161
4.4. Resettlement Costs per Family 172
4.5. Cost of Resettlement as a Percentage
of Total Cost 173
4.6. World Bank Participation in Financing
Resettlement 175
4.7. Project Optimization to Minimize
Displacement 179