No abstract

It is estimated that by 2001 20 million people had died from AIDS, which is now the world's fourth biggest cause of death. While the highest prevalence and death rates and number of infected persons are reported for sub-Saharan Africa, where life expectancies at birth are declining rapidly and infant mortality rates are increasing, there is evidence that the epidemic is accelerating in Asia and Eastern Europe. While the human and social costs of the HIV/AIDS epidemic are the major causes for concern, the econometric results reported in this paper indicate that the macroeconomic affects of the HIV/AIDS epidemic have been substantial; especially in Africa where the average marginal negative impact on income per capita of a one percent increase in HIV prevalence rate is 0.59 percent. Even in countries where the HIV prevalence rates are lower the marginal impacts are non trivial.

HIV|AIDS is the dominant health issue in Africa, where in many countries the human and social costs are devastating. Any deterioration in economic performance is likely to compound these costs and render countries less able to cope with the epidemic. However, conventional economic theories of growth argue that the impact of such an epidemic on the growth rate and level of income may be positive or negative. The analyses reported in this paper assess the impact of the HIV epidemic upon economic growth performance in 41 African economies between 1960 and 1998. The results indicate that for African countries where the prevalence of HIV is relatively low the impact of the epidemic conforms to 'normal' economic expectations. However, when the prevalence of the epidemic is relatively high the macroeconomic impact of the epidemic is unclear. Copyright © 2001 John Wiley & Sons, Ltd.

Water scarcity is an increasing problem in many parts of the world and the management of water has become an important issue on the political economy agenda in many countries. As water is used in most economic activities and the allocation of water is often a complex problem involving different economic agents and sectors, Computable General Equilibrium (CGE) models have been proven useful to analyze water allocation problems, although their adaptation to include water is still relatively undeveloped. This paper provides a description of an integrated water-focused CGE model (STAGE_W) that includes multiple types and uses of water, and for the first time, the reclamation of wastewater as well as the provision of brackish groundwater as separate, independent activities with specific cost structures. The insights provided by the model are illustrated with an application to the Israeli water sector assuming that freshwater resources available to the economy are cut by 50%. We analyze how the Israeli economy copes with this shock if it reduces potable water supply compared with further investments in the desalination sector. The results demonstrate that the effects on the economy are slightly negative under both scenarios. Counter intuitively, the provision of additional potable water to the economy through desalination does not substantively reduce the negative outcomes. This is mainly due to the high costs of desalination, which are currently subsidized, with the distribution of the negative welfare effect over household groups dependent on how these subsidies are financed.