The Origins of Effective Environmental Policy

One of the great puzzles in contemporary environmental policy is why some human institutions are more effective than others in governing natural resources. Whether the institution is at the level of the national government or at the level of a small rural community, the governance of environmental public goods and common pool resources is always a challenge. The challenge is particularly difficult in developing nations, when citizens and their political representatives try to achieve human and economic development without degrading their biological environment. The purpose of my research is to contribute to an increased understanding of the institutional structures and public policy processes that may help or hinder efforts to achieve sustainable development.

As a scholar in the field of comparative environmental policy, I grapple with the role that institutional arrangements play in explaining varying environmental policy performance in the developing world today. My research explores how local institutional arrangements may interact with national and international policies to produce distinct patterns of natural resource use, which ultimately may be observed as biophysical alterations on the landscape (i.e. deforestation or re-growth of forest, changes in water quality, etc). In this note, I describe the main questions, approaches and methods in my research program, my core findings to date, potential directions for future research, and the broader relevance of my research.

Research Questions and Hypotheses

People engaged in the harvesting of natural resources often face many collective dilemmas. In the realms of local environmental governance, one particularly difficult problem is to motivate resource users to contribute actively to the organization and implementation of rules that control access and regulate consumption of the resources. In other words, while local resources users have to bear the lion share of the costs of conservation, the benefits of conservation are not exclusive to the local users. In fact, the local conservation efforts often generate improved public goods (soil and water protection, enhanced diversity of gene pools, carbon sequestration, etc.), which are distributed to people who did not contribute directly to that conservation effort. This situation weakens the incentives of local people to assume the costs of conservation and it produces a tension between the local and broader scales of political decision making. The dilemma also raises several important questions, which much of my current research focuses on:

  1. Why would local politicians invest in environmental governance?
  2. What factors contribute to effective local environmental governance?
  3. How do local institutions affect outcomes on the landscape?

I approach these questions from the perspective of the new institutionalism school of political economy (North 1990, Ostrom, 1990, Knight 1992, Bates 1998). New institutionalists seek to explain political behavior by examining the constraints imposed upon individuals by institutions. Whereas early forms of institutionalism implied that institutional structures determined social or political outcomes, new institutional scholars have come to view institutional arrangements as moderating and mediating the effects of other variables. My approach also emphasizes the value of considering institutions at multiple levels, drawing on earlier work that analyzes institutions as “two-level games” (Putnam 1994), “nested action arenas” (Ostrom 2005), or systems of multi-level governance (Hooghe & Marx 2003). I recognize that institutional arrangements are nearly always made up of several layers of social orders-from local micro-interactional orders to international and transnational arrangements-and that relationships of complementarity and contradiction may exist between these layers.

Applied to the analysis of how public policy might affect environmental outcomes, I highlight the ways in which public policy initiatives are filtered by local institutional arrangements to produce observable behavior (decisions and actions) , sometimes even outcomes that are visible on the landscape. The pre-existing set of multi-tiered institutional arrangements shape the incentives that actors face and thus the patterns of interaction among resource users, various levels of government officials, and other actors. The relationship between actors and institutions is often complex, since actors both respond to institutional incentives and enact these institutional arrangements continuously. The central hypothesis in my research is that the configuration of local institutional arrangements and their interactional dynamics shape the extent to which policy initiatives affect resource use decisions and ultimately the environment.

My research challenges two core ideas in the local governance literature. The first idea is that sustainable management of natural resource in developing countries is not possible without substantial financial capital. The second idea is that the goals of sustainable resource governance outcomes are not achievable without highly trained government employees at the local level. To test these and competing institutional hypotheses, I engage in comparative analysis, using both qualitative and quantitative methods. The next section summarizes some of my main findings related to these central questions and hypotheses.

Main Research Findings

One of the core findings in the literature on natural resource governance is that local institutions matter a great deal when explaining subnational variation of environmental conditions (Ostrom, 1990; Gibson et al 2000; Agrawal, 2005; Baland and Platteau, 1996). Contrary to predictions from conventional micro-economic theory, this research has found that the effect that local institutions have on the governance outcomes is highly variable, and that local communities are sometimes able to govern their natural resources sustainably without any external interventions from national governments. One of the main contributions of my research to the local governance literature is the specification of several institutional and socioeconomic conditions under which local organizations manage their environmental resources effectively.

In a paper, published in the Proceedings of the National Academy of Sciences (PNAS), my co-authors and I show that by promoting decentralized governance of forests, national governments in developing countries can help reduce deforestation (Wright et al 2016). This positive effect of decentralization, however, is contingent on the active engagement of local governments -charged with the governance of forests through the reforms – with forest user groups. We use matching and regression techniques to analyze longitudinal observations of local institutional arrangements, local government practices, and forest cover change in a large number of subnational jurisdictions in Bolivia and Peru., and find evidence in support of on a likely causal process behind the observed pattern: when user groups engage with the decentralized units, it creates a more enabling environment for effective local governance of forests, including more local government-led forest governance activities, fora for the resolution of forest-related conflicts, intermunicipal cooperation in the forestry sector, and stronger technical capabilities of the local government staff.

The role of local institutional arrangements in efforts to reduce deforestation is also the topic of a 2007 article published in the Journal of Policy Analysis and Management. Here, my co-author and I employ time series data on forest conditions derived from satellite imagery of Bolivian forests and interview data from local municipalities. We show that varying forest conditions depend on the moderating effects that local institutions have on the socioeconomic and biophysical drivers of environmental change. In other words, the negative environmental effects of factors such as road density and historical deforestation patterns depend on strength of the local institutional arrangements in each specific location. We further find that the local institutional performance affects unauthorized deforestation directly and indirectly in the areas targeted by policy, but detect no effects on total deforestation rates (Andersson and Gibson, 2007).

What our analysis shows is that local governance institutions form an important part of explanations of environmental change. It also shows that local governments that perform well in terms of their internal organization of forestry activities also enjoy healthier forests. I propose that there are two conditions that must be fulfilled in order for local governments to achieve a high level of performance in environmental governance. First, local government leaders need to be motivated to invest their scarce resources into the environmental sector, and second, they need to have the means to acquire sufficient human and physical capital to be effective in whatever actions they decide to undertake. The empirical testing and discussion of these two theoretical propositions represent the bulk of my published work during the past five years. Next, I report on some of the main results of this effort.

What motivates local politicians to invest in natural resource governance? Comparing local responses to policy reforms in Bolivia and Guatemala, we argue in this article that successful environmental governance at the local level hinges upon the incentives of local politicians (Andersson et al, 2006). We test this argument by studying the experiences of local forestry sector governance in Bolivia and Guatemala, analyzing survey responses of 200 mayors. Building on earlier findings published in Andersson, 2003 and Gibson et al, 2003, we show that local-level institutional incentives are systematically linked to variations in local politicians’ investment decisions in the forestry sector. Further, we find that a decentralization policy that transfers very limited decision-making powers to local governments stifles local interest in organizing resource governance activities. These findings are consistent with later work by other scholars (Agrawal and Chhatre, 2006; Larson and Ribot, 2007).

In subsequent work, I have taken the analysis of institutional incentives in local governance one step further by analyzing the question as to why local politicians would be interested in participatory governance. Andersson and Laerhoven (2007) compare the effect of institutional incentives for democratic deliberation in 390 rural municipalities in Brazil, Chile, Mexico and Peru. The chapter tests and rejects the widely accepted idea that more decentralized regimes would necessarily enjoy better conditions for promoting participatory governance. We find that decentralization alone is not enough to induce participatory resource governance in local governments. A more powerful explanation to varying levels of participatory governance is the combination of two sources of political incentives: demands from local self-organized resource groups as well as central government agencies on the local government.

However, even if local politicians respond to these incentives by investing in local environmental governance and in democratic institutions, such investments do not necessarily lead to better environmental outcomes. To achieve sustainable outcomes is more complicated than that. After a local administration has decided it will do something about the environmental problems they face, their effectiveness will depend on what they decide to do and how they actually carry out such activities. The next set of articles explores this issue further.

Under what conditions is local natural resource governance effective? In my most frequently cited single-authored article to date (197 citations as of August 2018) I argue that efforts to study subnational policy outcomes would benefit from widening the unit of analysis from the most-commonly used local government administration to the local governance system (Andersson, 2004). Many individual local governments, especially in developing countries, lack the human and physical resources to be effective governors by themselves. It is therefore useful to recognize the linkages between different governance actors. The empirical analysis, based on observations in Bolivia’s forestry sector, finds that the degree of connectivity between the actors in a municipal governance system helps explain why some systems are more effective than others are. I have also tested this idea in a broader context in recent work, by comparing the conditions for successful governance of local common goods and services among local governments in Brazil, Chile, Mexico and Peru (Andersson, et al, 2009; Kauneckis and Andersson, 2009; Andersson, 2005, 2006).

One of contributions of this research is that it shows the incredible subnational variation that exists for environmental governance in many Latin American countries. And perhaps the most controversial finding is that contrary to conventional wisdom in this literature, I have shown that the availability of financial resources and formally trained employees have very little to do with environmental performance. The performance of local institutions is a far better predictor of such performance.

My most acknowledged contribution to the field of comparative development policy is probably my work on the incentives of development aid. This work started out as a commissioned study for the Swedish International Development Cooperation Agency (Sida) and eventually resulted in a peer-reviewed book, published by Oxford University Press (2005). The study analyzes the incentives structures that are often present in multi and bilateral aid programs.

In this work, my co-authors and I identify two fundamental reasons why simply channeling more resources to developing countries is ineffective for relieving their plight: incentives and information. Even when aid is conducted bilaterally, development aid confronts a very intricate and complicated web of divergent actor interests. For instance, any development aid process will inevitably involve the separate, often contradictory interests of citizens in the donor country, from whom the resources for foreign aid are extracted. Add to these, the interests of aid-savvy contractors, recipient government, local interest groups, varying degrees of organized citizenry (who are often the claimed beneficiaries of the aid) and it is easy to see the challenge of making aid work in the “common” interest. The real complications begin, however, when the actors with these diverging interests start to interact with each other and seek to use the aid programs to further their individual agendas. Unfortunately, such strategic and opportunistic behavior is not rare for any of the actors involved in the often tangled relationships within aid programs.

The Samaritan’s Dilemma has been cited over 650 times (Google Scholar, 2018) and has received enthusiastic reviews in several peer-reviewed journals. One reviewer had the following to say about the book:

“Free copies of The Samaritan’s Dilemma should be sent to U2’s Bono, Jeffrey Sachs, and all others who take the “gobs-of-cash-will-do-you” approach to curing world poverty. As an increasing portion of the development community now recognizes, sending oodles of money to poor countries does not make them rich and may even make them poorer. This important book explains why. The authors’ discussion is clear, straightforward, and easy to understand, even for Bono” (Leeson, 2008).

Potential Future Directions

As an extension of my study of how national government initiatives and interventions affect local decision making, I have moved beyond decentralization and rural development policies to assess the impact of Payments for Ecosystem Services on conservation behavior (Andersson et al 2018a; Andersson et al 2018 b; Alston et al 2013; Alston and Andersson 2011) industrial tree plantations on poverty rates (Andersson et al 2015); Pigouvian taxes on groundwater use (Smith et al 2017), as well as the effect of gender quotas on cooperative solutions to common pool resource dilemmas (Cook et al 2018). I have also expanded my methodological toolbox and have started to use behavioral experiments in my research. Two recent studies employ framed field experiments to explore how forest users respond to PES incentives as well as the introduction of a gender quota (Andersson et al 2018a, and Cook et al 2018).

If I were to identify the research question that I am the most intrigued and excited by it would be this one: Why do resource users decide to self-organize governance institutions for sustainable development? Fifty years of groundbreaking research on the governance of common pool resources have shown that local institutions matter a great deal. Evidence that is still lacking is why these institutions emerge in the first place. Together with colleagues at the Center for the Governance of Natural Resources, I design studies that seek to answer this question. For example, using framed field experiments with forest users in Bolivia and Uganda, we are finding that local forest users are more likely to create and enforce their own rules about forest use when they perceive the resource to be of significant economic value, when there are large increases or decreases in resource availability, and when a group member takes the initiative to facilitate communication between group members (Andersson et al 2018).

Broader Relevance

It is estimated that there are about 1.6 billion people in the world today who live on less than 2 dollars a day and depend directly on forests for their daily subsistence (World Bank, 2004). It is clear that sound use of these forests play a major role in efforts trying to improve the livelihoods of this large group of people. The problem is that much of the world’s forests grow in countries with weak governance arrangements and unclear property rights systems. Ironically, many of the people who rely on the forest the most for their survival often do not have legal access to the resource (WRI, 2005). As a result they have little incentive to invest in the long-term productivity of the forests they use. Most policy analysts agree that major reforms are needed to improve the governance of these forests to the benefit of current and future forest users, but surprisingly little scientific knowledge exists about the types of policies and governance arrangements that are likely to work best in specific national and local contexts. The purpose of my research is to contribute to increased knowledge in this area.

References Cited

Agrawal A.and Chattre, A. 2006. Explaining Success on the Commons: Community forest governance in the Indian Himalayas. World Development (34(1):149-166.

Agrawal, A. 2005. Environmentality: Technologies of Government and the Making of Subjects. Durham, N.C. Duke University Press.

Alston, L. and Andersson, K. 2011. Reducing greenhouse gas emissions by forest protection: The transaction costs of implementing REDD. Climate Law 2(2): 281-289

Alston, L., Andersson, K. and Smith, S. 2013. Payment for Environmental Services: Hypotheses and Evidence. Annual Review of Resource Economics 5(1):139-160.

Andersson, K. 2006. Understanding Decentralized Forest Governance: An Application of the Institutional Analysis and Development Framework. Sustainability: Science, Practice, & Policy 2(1):25-35.

Andersson, K. 2004. Who Talks With Whom? The Role of Repeated Interactions in Decentralized Forest Governance. World Development Vol 32(2): 233-249.

Andersson, K. 2003. What Motivates Municipal Governments? Uncovering the Institutional Incentives for Municipal Governance of Forest Resources in Bolivia. Journal of Environment and Development 12(1):5-27.

Andersson, K. 2005. ¿Cómo Hacer Funcionar la Gestión Forestal Municipal? Lecciones de Bolivia. La Paz, Bolivia: Plural Editores.

Andersson, K.P., Cook, N.J., Grillos, T., Lopez, M.C., Salk, C.F., Wright, G.D., Mwangi, E. 2018. Experimental Evidence on Payments for Forest Commons Conservation. Nature Sustainability 1(3): 128-135

Andersson, K.P., Smith, S.M., Alston, L.J. Duchelle, A. E., Mwangi, E., Larson, A.M., de Sassi, C., Sills, E.O., Sunderlin, W.D. and Wong, G. Y. 2018. Wealth and the Distribution of Benefits from Tropical Forests: Implications for REDD+. Land Use Policy 72: 510-522

Andersson, K., Lawrence, D., Zavaleta, J., Guariguata, M. R. 2016. More Trees, More Poverty? The Socioeconomic Effects of Tree Plantations in Chile, 2001-2011. Environmental Management 57:123-136.

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Andersson, K. and Gibson, C. 2007. Decentralized Governance and Environmental Change: Local Institutional Moderation of Deforestation in Bolivia. Journal of Policy Analysis and Management 26(1): 99-123.

Andersson, K. Gibson, C. and Lehoucq, F. 2006. Municipal Politics and Forest Governance: Comparative Analysis of Decentralization in Bolivia and Guatemala. World Development 34(3): 576-595.

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Gibson, C., and Lehoucq, F. 2003. The Loc al Politics of Decentralized Environmental Policy in Guatemala. Journal of Environment and Development, 12(1), 28-49.

Hooghe, L., & Marks, G. 2003. Unraveling the Central State, but How? Types of Multi-level Governance. American Political Science Review, 97 (2), 233-43.

Kauneckis, D. and Andersson, K. 2009. Making Decentralization Work: A Cross-National Examination of Local Governments. Stud Comp. International Dev 44(1): 23-46.

Knight, J. 1992. Institutions and Social Conflict. Cambridge: Cambridge University Press.

Larson, A. and Ribot, J. 2007. The Poverty of Forestry Policy: Double Standards on an uneven playing field. Sustainability Science 2 (2): 189-204

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North, D. 1990. Institutions, Institutional Change and Economic Development. New York, NY: Cambridge University Press.

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Putnam, Robert D. 1994. Making Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton University Press.

Smith, S.M., Andersson, K.P., Cody, K.C., Cox, M. Ficklin, D. 2017. Responding to a Groundwater Crisis: The Effects of Self-Imposed Economic Incentives. J. Assoc. Environmental and Resource Economists 4(4):985-1025.

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World Resources Institute 2005. The Wealth of the Poor-Managing Ecosystems to Fight Poverty. United Nations Development Programme, United Nations Environment Programme, World Bank, World Resources Institute, Washington DC.

Wright, G.D., Andersson, K.P., Gibson, C.C., Evans, T. 2016. Decentralization May Reduce Deforestation when User Groups Engage with Local Government. Proceedings of the National Academy of Sciences 113(52): 14958-14963.