Institutions for sustainable governance of forests: Equity, robustness and cross-level interactions in Mawlyngbna, Meghalaya, India

This study adopts Ostrom’s Social-Ecological Systems (SES) framework in empirical fieldwork to explain how local forestry institutions affect forest ecosystems and social equity in the community of Mawlyngbna in North-East India. Data was collected through 26 semi-structured interviews, participatory timeline development, policy documents, direct observation, periodicals, transect walks, and a concurrent forest-ecological study in the village. Results show that Mawlyngbna's forests provide important sources of livelihood benefits for the villagers. However, ecological disturbance and diversity varies among the different forest ownership types and forest-based livelihood benefits are inequitably distributed. Based on a bounded rationality approach, our analysis proposes a set of causal mechanisms that trace these observed social-ecological outcomes to the attributes of the resource system, resource units, actors and governance system. We analyse opportunities and constraints of interactions between the village, regional, and state levels. We discuss how Ostrom’s design principles for community-based resource governance inform the explanation of robustness but have a blind spot in explaining social equity. We report experiences made using the SES framework in empirical fieldwork. We conclude that mapping cross-level interactions in the SES framework needs conceptual refinement and that explaining social equity of forest governance needs theoretical advances.

Fortaleciéndo la soberanía alimentaria mediante la revalorización de saberes ecológicos locales: experiencia en los Andes bolivianos

Ethnobiology research contributes significantly to initiatives that aim to enhance food sovereignty among indigenous and/or traditional people. In Bolivia, one of the Latin-American countries that shows the highest poverty and undernourishment levels, the purpose of this research-action project was to enhance food sovereignty through the revitalization of the local ecological knowledge and to promote local technological innovation processes in the Andean community of Tallija-Confital. During a first step the endogenous knowledge and strategies related to food security and sovereignty were investigated, based on the principles and tools of the Revitalizing Participatory Research (RPR). In a second step local technical innovation processes were supported through a “knowledge dialogue” between exogenous and endogenous knowledge systems, focusing on the processing of the cañahua (Chenopodium pallidicaule Aellen) gluten. The research results demonstrate that Andean people have developed complex endogenous knowledge and strategies to adapt to socio-environmental changes that show a great potential to contribute to the enhancement of food sovereignty. Nevertheless, in the current globalized context that translates into new challenges for local communities, beyond the revitalization of local ecological knowledge, a dialogue between different knowledge systems can lead to important local technological innovation for the improvement of their well-being. Key words: food sovereignty, knowledge dialogue, endogenous development, technological innovation

Alpine Common Property Institutions under Change: Conditions for Successful and Unsuccessful Collective Action by Alpine Farmers in the Canton of Grisons, Switzerland

The protection and sustainable management of alpine summer pastures has been stated as a goal in Swiss national law since 1996, and direct payments from the state for summer pasturing have been tied to sustainability criteria since 2000. This reflects the increasing value of the alpine cultural landscape as a public good. However, provision of this public good remains in the hands of local farmers and their local common pool resource (CPR) institutions for managing alpine pastures. These institutions are increasingly struggling to maintain their institutional arrangements, particularly regarding the work needed to maintain the pastures. This paper examines two cases of local CPR institutions for managing alpine pastures in the Swiss Canton of Grisons that manifest different institutional developments in light of changing conditions. The differences in how these institutions reacted to change and the impacts this has had on the provision of the CPR are explained by focusing on relative prices, bargaining power, and ideology as drivers of institutional change that are often neglected within common property research. Key words: summer pasture management, institutional change, bargaining power, ideology

Shaping Institutions for Natural Resource Management

This InfoResources Focus tries to clarify challenges people face when shaping institutions for sustainable NRM and discusses key elements for implementing processes of institutional change. Emphasis is put on local institutions embedded in national, regional and global institutional schemes.

Apoyando innovaciones locales: Un instrumento para el fortalecimiento de innovaciones locales y la promoción del desarrollo rural sostenible: Experiencias de dos talleres pilotos de MASAL y CDE realizados en laprovincia de Cuzco, Perú

Local communities have often underestimated their endogenous potentials for innovation – potentials that could help them adapt to changing socio-cultural, political, economic and environmental conditions, to improve their livelihoods, develop their own visions, and negotiate their own priorities. While the significance of local innovation potentials for sustainable development is now increasingly acknowledged, projects and development plans rarely attempt to explicitly develop these potentials; nor do they try to disseminate local innovations within and among communities. Based on the conceptual framework of “social learning”, CDE has developed an instrument to promote existing local potential for innovation. The instrument is based on social learning processes involving different stakeholder groups in local contexts. It was successfully tested during two pilot workshops in a rural development context in the Peruvian highland. The present paper reports on the experience of these two workshops held in April and May 2004 in the communities of Tungasuca in the Cuzco Province. The paper describes the context of innovations and the methodology applied, followed by a detailed description of the contents and outcomes of the workshops, as well as the experience gained in the process. Finally it draws a set of conclusions and presents the lessons learnt.

Diploma: Facilitación del desarrollo local y la gestión sostenible de los recursos naturales: Módulo I: Apoyando Innovaciones Locales

Pilot workshop of the instrument "Promoting Local Innovations", realized in Tungasuca, Peru, on 19-24 April, 2004.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

The impact of associational life on trust in local institutions: a comparison of 57 Swiss municipalities

In this paper, we evaluate the impact of associational life on individual political trust in 57 Swiss municipalities. Our hierarchical regression models show that individual political trust is not only affected by individual associational membership but also by the exchange between associations and local political authorities in a community. In other words, if political authorities and associations are linked at the community level, citizens will place more trust in their local institutions. Furthermore, we find clear evidence for the rainmaker hypothesis: our results show that the positive effect of a vibrant connection between associational life and local politics on political trust is not solely confined to the associational members themselves, but rather indicate that the structure of the local civic culture fosters political trust among members and non-members at the same time. However, the internal democratic processes of associations have no effect on individuals’ trust in local political institutions.