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The complexities of decentralization in a globalizing world

Engel, Stefanie and Palmer, Charles (2009) The complexities of decentralization in a globalizing world. IED working paper, no. 8. Institute for Environmental Decisions (IED), Zurich, Switzerland.

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Abstract

In many developing countries, decentralization programmes for natural resource management aim to induce incentives for sustainable resource management at the local level. The effectiveness of such programmes has, however, suffered from weak property rights to the resource and by the presence of externalities. Growing economic integration among countries has exacerbated these problems by increasing the exposure of local user groups to commercial actors interested in resource extraction. In this paper, the interplay of decentralization and globalization in affecting environmental outcomes and community welfare is analysed through a game-theoretic model of community-firm interactions. The results highlight the complexities of policy design. First, by raising the extractive value of the resource, globalization may lead to communities negotiating resource extraction agreements with firms. Second, with a lack of effective state enforcement of community resource rights, communities may be unable to assume de facto ownership over the resource, while commercial actors succeed in exploiting resources without community consent. No single policy option provides a panacea to counteracting these negative effects. Instead, a mix of policies, combining incentive payments along with the provision of more secure property rights and poverty alleviation is shown to have the potential to improve both environmental outcomes and community welfare.

Item Type: Monograph (Working Paper)
Official URL: http://www.ied.ethz.ch/
Additional Information: © 2009 The authors
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
H Social Sciences > HB Economic Theory
G Geography. Anthropology. Recreation > GE Environmental Sciences
Sets: Departments > Geography and Environment
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: no. 8
Date Deposited: 14 May 2010 13:06
URL: http://eprints.lse.ac.uk/27954/

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