Adaptive Responses to Inter-Group Competition Over Natural Resources : The Case of Leakage, with Evidence from Pemba Tanzania

Unintended consequences of conservation policies are growing as new environmental regulations proliferate worldwide. The policy externality known as leakage has gained attention as carbon credit schemes have become more common. However, we have little research, theoretical or empirical, exploring how people in neighbouring communities adapt to the challenges created by policy leakage. This paper fills this gap by developing a generative theory that examines the adaptive responses of neighbouring residents who are exposed to leakage and tests this theory against empirical data. Generally, we find that leakage decreases returns on effort invested in harvest as more agents compete for the same resources. High leakage levels in simulations with few groups generally increase support for boundary protection institutions but erode support for in-group regulatory institutions. However, in multi-group contexts, leakage can promote the emergence of both kinds of institutions due to cultural multilevel selection. We test a subset of the predictions with empirical data from Pemba, Tanzania and find that exposure to leakage increases harvesting effort and decreases support for conservation programming. In conjunction with empirical analyses, our model results reveal the importance of on-the-ground realities imposing limits upon institutional development