Context-Dependent Biodiversity Conservation Management Regimes

"The central challenge of tropical biodiversity conservation involves reconciling private and social incentives to 'internalize' externalities. Positive externalities of natural resource conservation accrue at the local, national and global levels, although the costs of conservation are frequently borne locally. Under these circumstances, it becomes extremely important to identify what type of institutional arrangements can effectively align private and social incentives to promote conservation, without imposing additional burden on already vulnerable communities. "To enable communities to increase their benefit from conservation, the past two decades have witnessed a trend towards alternative conservation and resource management systems, such as community-based natural resource management (CBNRM) and co-management. These approaches are advocated under the assumption that communities have a greater incentive to conserve their resources when uncertainty over use and access rights is reduced, and that greater conservation will ensue with the application of local knowledge and local enforcement. However, numerous case studies demonstrate that the effectiveness of these different institutional arrangements in conserving biodiversity is context-specific. "This paper addresses the question of where to vest different forms of authority to ensure biodiversity conservation and an equitable distribution of benefits and costs. There has been little theory or holistic work that attempts to identify the key variables that determine when one arrangement or another will be optimal. This paper complements the lessons learned from case studies by providing a theoretical model as a framework for identifying the appropriate context-specific conservation design. Furthermore, case study data is used as a check on the model predictions. "The model is adapted from the agrarian contracts literature and considers two agents (one representing government and one representing community) who must perform two authoritative tasks related to biodiversity conservation: rule-making and rule-enforcement. Between these two agents there are three possible distributions of authority (as specified in a given contract): 1- one agent has the authority to undertake both activities; 2- each agent has the authority to undertake one of the two activities; 3- each agent shares the authority to undertake both activities. "We use comparative statics to examine the effect of four parameters (heterogeneity of conservation objectives, external market pressure, ecological scale of conservation, and policy setting) on the optimal contract. The optimal contract is defined as that which maximizes social welfare subject to a minimum level of biodiversity conservation. Data from case studies is used to evaluate the model by comparing model prescriptions with the effectiveness of existing contracts. "The model provides insight into how institutional arrangements could be adapted to local conditions, and under what conditions a given type of contract might be optimal. Possible extensions to the model include an increased number of agents and heterogeneity within agent types."