Abstract

Payments for Environmental Services (PES) are a nature conservation policy in which landowners receive financial compensation conditional on verified environmental service delivery. PES contracts have been found to be effective in inducing conservation on private lands, as the agent signing the contract is also the one ensuring the environmental service delivery. If land is (de facto) collectively owned, offering collective conservation payments may give rise to strong free-riding incentives. We implement a Randomized Controlled Trial in arid Burkina Faso, aimed at stimulating reforestation in community-managed forest areas, to test the relative effectiveness of two community PES payment schemes — a linear group payment scheme, in which group payments increase linearly with tree survival rates, and a threshold group payment scheme. Contrary to standard economic theory we find that linear group payments give rise to higher tree survival rates than threshold group payments. We use both field-experimental evidence as well as lab-experimental results to explore the mechanisms giving rise to this surprising result.

Co-authors: Serge Adjognon, and Eline van der Heijden

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