How do institutions aff ect the management of environmental resources? - Environmental Management - page 145

TC cc

TC hp' TC hp

TC p'

Transaction costs

TC p

TC cc'

c Care-intensity

Threat to resource
Measurement costs

Source: Birner and Wittmer (2000).

Figure 5.3 Impact of state capability and social capital on governance

structure

suggests that sole state ownership over natural resources is less likely to
be ei cient in protecting these resources. For example, biodiversity losses
may increase more rapidly due to dii culties faced by state governance in
preventing over-exploitation of biological resources due to high enforce-
ment and monitoring costs. As discussed earlier, increased social capital
reduces the transaction costs of collective action through coordinating
the resource users and implementation of instruments of social control.
Figure 5.3 shows that hybrid private governance is comparatively ei cient
for c . c 9 and co-management is the optimal choice for c . c 9 (Birner and
Wittmer, 2000).
Table 5.2 provides a summary of the institutional choice and govern-
ance structure for natural resource management under dif erent state
capability and social capital.
If both state capability and social capital are low, private sector manage-
ment with state regulation is superior to community-based management.
This signii cantly reduces the transaction costs of resource management.
Participatory management is especially suited to cases where there is a
high probability of strong community participation. User involvement
in decision-making processes enhances compliance with resource use
regulation. Moreover, community-based management is best suited where
equity issues need to be taken into account. Co-management may be the
optimal choice where governance structure places less demand on social