Environmental Engineering Reference
In-Depth Information
Bardhan (1999) considers 'exit options'. He
argues that the ef ect of exit
options on conservation is complicated. Nonetheless, this depends in part
on the nature of the relationship between wealth and the exit options. If a
resource harvester's exit option is a concave function of wealth - meaning
that the value of the outside option rises very quickly with wealth at low
levels of wealth, but increases more slowly at higher wealth levels - then
increases in inequality, starting from relatively equal wealth distributions,
will reduce conservation and thus performance of cooperative arrange-
ments. In that case, the relatively poorer harvesters will not be interested
in optimal conservation; as her/his wealth declines, their gain from con-
servation falls of more rapidly than the gain from exercising her/his exit
option. On the other hand, if the exit option is a convex function of the
wealth level then increased inequality might either enhance or damage
the prospects for conservation: the ef ect is intermediate. If resource users
have relatively lucrative earnings outside the commons, this can af ect
their individual incentives. Wealthier households might have reduced
incentives to participate in collective action, as their wealth endowments
af ord them attractive outside earning opportunities. For those enjoying
such opportunities, the discounted value of their future income l ows from
the CPR may fall below that of alternative incomes available. On the
other hand, users lacking such outside opportunities attach a higher value
to the future state of the resources, which may enhance the likelihood of
collective action.
In his simple numerical model, Kanbur (1992) investigated the role of
group heterogeneity in the success or failure of common property resource
management. He argues that cooperative arrangements are less likely
when agents are highly heterogeneous. Moreover, existing arrangements
are also likely to break down as a group becomes more heterogeneous.
Drawing upon the conclusions from various case studies, he vividly
presents the fact that greater equity (at least greater homogeneity) pro-
motes greater ei ciency by facilitating adoption of cooperative arrange-
ments, in situations where externalities make non-cooperative outcomes
inei cient. Tang (1992) presents a synthesis based on careful analysis of
47 case studies of community irrigation systems and found that a low
variance of average family income among irrigators tends to be associated
with a high degree of rule conformance and good maintenance: 72 per
cent more of the cases with low-income variance are characterized by both
a high degree of rule conformance and good maintenance than the cases
with high income variance. This i nding may throw new light on the fact
that successful schemes are to be found in relatively homogeneous commu-
nities, and it is precisely in these communities that one is unlikely to i nd
arrangements that favour one subgroup over another (Kanbur, 1992).
