The International Water Management Institute (IWMI) aims to overcome inequalities, unsustainable water management and water risks by identifying barriers and inequities in development goals and generating rigorous quantitative evidence on the economic-social-environmental tradeoffs in development. It uses sciences and tools in economics to inform policy design and investment decisions of key donors, governments, private sector stakeholders and farmers.
Its work in economics and impact assessment encompasses six complementary thematic areas:
IWMI conducts experimental or quasi-experimental causal studies and impact evaluations to assess the outcomes of water-related policies, interventions or innovations. This research builds a better understanding of the economic incentives — including pricing — for sustainable, equitable and efficient water management. The evidence generated informs decision-makers on adapting and scaling these approaches while better understanding the cost-effectiveness of different approaches.
IWMI uses behavioral science to understand farmers’ preferences, risk and climate perceptions. This approach allows it to codesign bundled innovations combining technologies with financing tools and governance systems, an approach targeted at responding to the needs of the most vulnerable groups. Adoption studies also support a better understanding of the adoption pathways for gender and social integration.
IWMI adopts a business model approach to understanding the potential and enabling environment for scaling water-related innovations. In doing so, it supports sustainable agribusinesses and leverages public-private partnerships from nurturing to scaling.
IWMI also conducts water valuation studies and advanced methods on the economic valuation of water. These valuations of the economic-social-environmental benefits provided by water security can support long-term, sustainable and derisked investments in water management, water (re)allocation decisions and design of incentives mechanism such as payment for ecosystem services.
IWMI considers the macroeconomic role of the water sector and its subcomponents at the national, regional or global level. It uses partial equilibrium economic modeling, combined with hydrology, to equip decision-makers with scenario analysis for water-related policies or investments. It also analyses the weight of water in economies and trade in relation to endowments to rethink global exchanges and production systems.
IWMI contributes to closing the water data gap by supporting the monitoring and evaluation of key interventions, supporting national partners in collecting and using water-related information and supporting the development and collection of household and individual-level integrative information on water security.
Financial inclusion is recognized as a vital driver of sustainable development and serves as a fundamental pillar of climate action. It is crucial to enhance the climate resilience of smallholder farmers in the face of severe and unpredictable climate shocks, which disproportionately affect them. However, the level of financial inclusion in Ethiopia remains low, and its impact on the climate resilience of smallholder farmers has not been thoroughly examined using rigorous model and comprehensive dataset. This study investigates the impact of financial inclusion on the climate resilience of rural households, using a large data set from the Ethiopian Socio-Economic Survey. The principal component analysis was applied to construct a climate resilience index. The financial inclusion was measured using an index that encompasses three dimensions: penetration, availability, and usage. In order to address the endogenous nature of financial inclusion, an instrumental variable approach was employed, using the distance to the nearest financial institution and religion as instrumental variables. The results demonstrated a positive and significant impact of financial inclusion on the climate resilience of rural households. Therefore, the government should strengthen the provision of essential financial and related infrastructures in rural Ethiopia to improve access to financial products and services. Furthermore, it is essential for policymakers to initiate and implement financial sector reforms that ensure the availability of affordable and tailored financial services. These reforms should also prioritize the development of climate-resilient agricultural finance, thereby contributing to the achievement of climate action goal of sustainable development.
Principal component analysis / Households / Rural areas / Farmers / Sustainable development / Climate change / Financial inclusion / Climate resilience Record No:H053273
Climate change remains a significant threat to farm households, especially in developing countries. It exacerbates their vulnerability to food insecurity by reducing agricultural productivity and raising agricultural production costs. Adoption of climate smart-agricultural (CSA) practices is a promising alternative to build resilient farm households. In this study, we assessed the impacts of adopting CSA practices on climate resilience and vulnerability among farm households in Bale-Eco Region, Ethiopia. A power calculation was used to determine the sample size, and 404 farm households were randomly selected to collect data using structured questionnaire. We estimated household climate resilience index using categorical principal component analysis, and vulnerability index using vulnerability as expected poverty approach. Endogenous switching regression model, which is conditional on the adoption of multiple CSA practices and used to control selection bias and unobserved heterogeneity, was used to assess the impacts of CSA practices on household climate resilience and vulnerability. We employed counterfactual approaches to assess the impacts. The results show that the average treatment effects for most CSA practices are statistically significant and positive for resilience, but negative for vulnerability. This provides empirical support for interventions in climate-smart agriculture, which can help farm households build resilience and reduce vulnerability. We, therefore, suggest that agricultural policies should encourage the adoption of CSA practices and provide incentive packages to farm households that promote this.
Villages / Capacity development / Policy making / Rural development / Civil society / Decision making / Institutions / Groundwater / Integration / Community involvement Record No:H052987
