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Complexities of decentralization in a globalizing world

Engel, Stefanie and Palmer, Charles E. (2011) Complexities of decentralization in a globalizing world. Environmental and Resource Economics, 50 (2). pp. 157-174. ISSN 0924-6460

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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 fromweak 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, globalizationmay 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: Article
Official URL:
Additional Information: © 2011 Springer
Library of Congress subject classification: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting; Environmental Equity
Sets: Departments > Geography and Environment
Collections > Economists Online
Date Deposited: 03 Oct 2011 15:05

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