The economics of local forest management (or another lesson in Elinor Ostrom)

by on October 14, 2009 at 7:20 am in Economics | Permalink

Here are some recent results:

In the first study of its kind, Chhatre and Arun Agrawal of the University of Michigan
in Ann Arbor compared forest ownership with data on carbon
sequestration, which is estimated from the size and number of trees in
a forest. Hectare-for-hectare, they found that tropical forest under
local management stored more carbon than government-owned forests.
There are exceptions, says Chhatre, "but our findings show that we can
increase carbon sequestration simply by transferring ownership of
forests from governments to communities".

One reason may be that locals protect forests best if
they own them, because they have a long-term interest in ensuring the
forests' survival. While governments, whatever their intentions,
usually license destructive logging, or preside over a free-for-all in
which everyone grabs what they can because nobody believes the forest
will last (Proceedings of the National Academy of Sciences, DOI: 10.1073/pnas.0905308106).

The authors suggest that locals would also make a better job
of managing common pastures, coastal fisheries and water supplies. They
argue that their findings contradict a long-standing environmental
idea, called the "tragedy of the commons", which says that natural
resources left to communal control get trashed. In fact, says Agrawal,
"communities are perfectly capable of managing their resources
sustainably".

If you turn to the first page of the paper itself, the header reads:

Edited by Elinor Ostrom, Indiana University, Bloomington, IN, and approved September 4, 2009 (received for review July 22,
2009)

Of course this sort of result is inspired by her work as well.  For the pointer I thank Andrew Grant.

Geoff NoNick October 14, 2009 at 8:26 am

Of course carbon sequestration (even if you think that sort of thing important) isn’t all about storing wood in forests. Logging for building timber allows carbon to be permanently sequestered in the form of wood building material. Carbon left in the forest is eventually released as wood rots or is burned in forest fires (hence why tropical forests, with larger average live trees and no natural forest fires) sequester the most.

michael webster October 14, 2009 at 8:51 am

Ostrom is not saying that community ownership works all the time, and in fact proposes 6 or 7 rules for predicting when community ownership will fail/succeed.

Justin Martyr October 14, 2009 at 12:25 pm

so community ownership is a free market phenomenon or not?. both socialists and libertarians seem to be claiming ostorm’s views as supporting their viewpoints.

Good question. I think Ostrom refutes the more radical libertarians who argue that economics comes down to incentives and self-regarding actors who maximize expected utility. I don’t think it is a problem for Hayek-style libertarians (quite the contrary) who argue for decentralized solutions because they lead to efficient social norms.

Stephan October 14, 2009 at 12:46 pm

For those interested in the 8 design principles for successful collective action groups, check out this paper – http://dlc.dlib.indiana.edu/dlc/handle/10535/3785

dan cole October 14, 2009 at 1:01 pm

Anyone notice that Mankiw still hasn’t figured out how to spell “Ostrom”? I’m beginning to understand why Lin spurned Harvard’s advances several years ago.

Scott October 14, 2009 at 1:05 pm

In Maine the family timber lots are managed in a sustainable fashion. Mercantilists foreign or domestic often will have intensive to loot a resource.

I believe that the mobility and number of opportunities available to an entity will correlate with it’s likelihood of looting a resource.

Seward October 14, 2009 at 1:42 pm

Lee A. Arnold,

Yes, libertarians have never heard of institutions before. I mean, it isn’t like institutions are something that Hayek went on at great length about in their importance or anything.

Lee A. Arnold October 14, 2009 at 10:40 pm

Seward: “it isn’t like institutions are something that Hayek went on at great length about in their importance or anything.”

Then it’s more like libertarians never bothered to read it, because they wouldn’t keep dividing things into only the two categories of “free markets” vs. “government planning.”

pravin October 15, 2009 at 3:33 am

“and then, were that damage not enough, screaming about the “tragedy of the commons” which ensues precisely when it becomes a free-for-all, and arguing for more privatisation to fix it, although most wildlife resources cannot compete with the interest rate. Quite a disaster. ”

not quite. for every nepal irrigation system,one can show the success of a moholoholo park.you forget that the interest rate/money itself is not private.it is a govt monopoly.to blame privatization for the ills of govt failure and monopoly is totally off the mark

jimbino October 15, 2009 at 10:59 am

The National Parks and Forests should likewise be transfered to a good husbandman like Ted Turner. The government is incompetent in managing them and maintains them as White Country Clubs that effectively exclude Native Americans, Hispanics and Blacks, even in places like Chaco Canyon and Mesa Verde, virtually surrounded by minorities.

Or transfer them to Disney, who knows how to run a park that not only does not tax and exclude minorities for its maintenance, but that attracts minorities from all over the world.

ElChupacabra October 27, 2010 at 11:38 am

The forests should be protected.If we run out of forests will be tragic because we run out of natural filter that turns CO2 in O.And that will be a big problem because the population size is growing.sales contact management software

Brandon Boxer February 28, 2011 at 3:36 pm

My uncle used to be a forest ranger up in northern cali. he said he loved it, i only envy i couldn’t have been a park ranger like himself.

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