Environmental Engineering Reference
In-Depth Information
in relation to the variable cost of resource management. Variable costs
described here represent the care-intensity of the implementation activi-
ties, the costs of measuring the outcomes and/or the intensity of the
threats to the natural resource in question. It is clear that the decision
costs of state governance (
TC
D
p
) are lower than those of co-management
(
TC
D
cc
) with lower variable costs (that is, little care-intensity, little threat
to resources and measurement of outcome is possible). This implies that
transaction costs are higher for a co-management strategy since a higher
degree of ef ort is required for joint decision-making and coordination.
The decision-making procedure becomes more complicated and costly
with increasing group size since time and ef ort required appear to be
rapidly increasing functions of the size of the group. This is, indeed, in
line with Olson's hypothesis, which maintains that the smaller the group
size, the greater the likelihood of collective action. When the consent of
every party participating in collective action is required for agreement,
these costs may be very high indeed (Baden, 1998). Nonetheless, with
increasing variable cost, the decision costs under public sector governance
are assumed to increase more rapidly than those under co-management,
because the probability of making wrong decisions is assumed to be higher
due to a lack of idiosyncratic knowledge that further increases the decision
costs (Birner and Wittmer, 2000).
In contrast, transaction costs of implementation seem to be higher for
public sector governance than those of co-management. This is due to
the fact that community-based management systems have the potential
for solving the commons dilemma by internalizing transaction costs of
resource management within the community. The community has a kind
of built-in incentive of social capital
8
and idiosyncratic knowledge that
can be used to make resource-specii c decisions or overcome factors such
as social heterogeneity in the group (Adhikari and Lovett, 2006b). The
community can overcome the problem caused by asymmetrical informa-
tion through informal institutions and lower the opportunity costs of their
time which considerably reduces the extent of transaction costs. The com-
munity also has at its disposal the requisite social coercive mechanisms
to force compliance with expected harvest (Grima and Berkes, 1989).
Though Figure 5.1 does not specify how the transaction costs are distrib-
uted between state government and community, co-management seems
to be crucial to shift transaction costs from state agencies to local users
(Birner and Wittmer, 2000).
Transaction costs of public sector governance and co-management are
compared with those of hybrid private sector governance (
TC
hp
) in Figure
5.2. The state government's involvement in common property resource
management seems to be essential for various types of conservation
