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Property Rights and Collective Action in Natural Resources with Application to Mexico

This lecture series explores the political economy of natural resources, theories of collective action, principal-agent analysis, and the challenges of incomplete contracts. It also examines the distribution of benefits and problems with empirical measurement in the context of Mexico. The lectures move beyond economics to consider power dynamics, actors, and accountability in the management of natural resources.

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Property Rights and Collective Action in Natural Resources with Application to Mexico

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  1. Property Rights and Collective Action in Natural Resources with Application to Mexico Lecture 1: Introduction to the political economy of natural resources Lecture 2: Theories of collective action, cooperation, and common property Lecture 3: Principal-agent analysis and institutional organization Lecture 4: Incomplete contracts with application to Mexico Lecture 5: A political economy model Lecture 6: Power and the distribution of benefits with application to Mexico Lecture 7: Problems with empirical measurement with application to Mexico Lecture 8: Beyond economics: An interdisciplinary perspective

  2. From property to power • Move attention away from property rights • Consider actors, power and accountability • Power: ability to influence others to increase your benefits • Related work: • Theories of access (Ribot 1998) • Devolution (Larson and Ribot 2004) • Accountability frameworks (Nygren 2000) • Social capital (Wilshusen 2007) • Political economy (Our work in progress)

  3. Power through lens of natural resource problems Natural resources: • critical for local livelihoods • Significant wealth base of government and national elites  Often a point of struggle

  4. Theory of Access – Ribot (1998) • Property is one mechanism among many to access the market • Access as a bundle of powers • Advocates moving back to empirical political economy models • Come back to in last lecture

  5. Devolution • Worldwide policy trend • Changes locale of decisionmaking from central to local • Goals: economic development • Many forms: • Decentralization, administrative, Deconcentration • Co-administration or co-management • Political-democratic • Environmental justice movement

  6. Rationale for Devolution • Equity: opens up decisionmaking process • Efficiency: better information at local level to make better policies; more incentives for stakeholders to invest • Cons: Local level susceptible to capture by elite

  7. Problems with Devolution • Barely happening: • Tanner Act, California state law on toxic waste, top down • Local actors not given adequate power • Local actors not accountable • Larger political economy constrains devolution • Better where locals mobilized to demand authority: • Examples from Cameroon, Nicaragua, India cited in (LR 2004) • Mexico: included state reformers and local communities • Recommend: • Identify when inadequate powers transferred to actors who are not accountable • Understand larger political economy of state formation

  8. Creating local institutions “not enough” • Nygren (2005) – Honduras • Maps actors and accountability • Wilshusen (2007) – Mexico • Applies social capital (Bourdieu) approach • “Institutions” fell short of program goals

  9. The “Lepartique process” • 1992-2003: Finnish government project, MAFOR in Lepartique • Defined criteria and indicators of sustainable forest management • Over time: Structural exclusion and political marginalization of “subalterns”

  10. Problems • Low political commitment of officials to social forestry • When community leaders not legitimate representatives • Accountability (e.g. Transporting timber at night) Alternative view: • “Illegal forestry as an institutionalized political economic system forged from state authorities and molded around local power.” • “Networks of corruption and path from legal regulations to illegal practices.”

  11. Timber marketing fund • Subgroup of SS created a fondo de acopio maderero to help move lesser known species • Holding facility • Marketing • Financing • Initial funds from federal agency • Funds to be used for: • Working capital advances • Processing • Assembly of delegates and staff • Increased volume and sales 1997-2001

  12. Collapse of fund • No institutional organization • No formal procedures • No accountability or reporting • No meetings of delegates after 1st • Unclear affiliation • Loans to: • Individuals • Work groups • Wholesalers (in form of timber) • Unregulated lending operation

  13. Effect • Shifted power between and among ejidos • Members and brokers and individuals accumulated timber stock and capital

  14. Social capital framework • Bourdieu (1986) • SK as power relationship and power resource • “aggregate of actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition.” • Both positive and negative outcomes

  15. Social capital framework Fields of play: institutional and cultural contexts of social interactions: • Field of lending • Field of technical management • Overlap • Informal lending custom eroded enterprise • Informal lending had tacit legitimacy; history traced to 60s • Institutional design insufficient to stop

  16. Power and status • Elements of cooperation in commons (Kopelman et al.) • Massey study of power, status and offending acts: • Act was less proper if reason given was invalid as opposed to valid. • If offender has higher status, it positively impacts other’s judgments if justification is also valid or at least ambiguous in terms of validity. High status was a liability if the offense was not valid. • Higher level of power had a positive impact on public judgments but not on private judgments of the impropriety. • If offender has high status and high power, then positive impact on public and private judgments.

  17. Political economy of forestry in Mexico • Who are actors? • Who are decision makers? • Who are interest groups? • What is power and what does it effect? • Can we apply a multilateral bargaining model to Mexican forestry?

  18. Power groups • Center • Groups • Organized • Unorganized but responsive

  19. Decisionmaking centers • Anyone who can authorize decisions, e.g.: • Community authorities • General Assembly • Consultative councils or committees • SEMARNAT • CONAFOR • Unions (pricing?)

  20. Policy instrument: xo • Investments levels in public goods and types of public goods • Investment in diversification away from forestry • Repartos (dividends) • Degree of local hiring • Wage advance payments and loans • Change in land cover over time (see land use change component of survey) • Conservation programs • Reinvestments in forestry (including investments in roads, physical capital, natural capital) • Forestry diversification

  21. Center objectives Centers choose xo to maximize: uok(xo;Z) +  (si(xi;Z)) where: uok: authorities’ utility xo: decisions or policy instruments si: “strength function” of interest group i xi: actions by groups or individuals to deliver the reward/penalty Z: set of exogenous shift parameters for costs/benefits of delivering rewards or penalties

  22. Interest groups • Organized and unorganized groups: • Workers in forestry operations • Parcel owners • Women • Non-comunero residents • “Elite” within the community • NGOs • Buyers, private sector?

  23. External actors • Examples: • Broader citizenship • Centers’ objectives may account for “reaction function” of external actors: r(x0)

  24. Groups’ objectives Groups choose xi to maximize the following function: ui(xo;Z) – ci where: ui: each group or individual’s evaluation in utility terms of xo ci: cost of exercising influence to deliver rewards/penalties.

  25. Actions to exert influence: xi • Nonoberservable

  26. Cost of exerting power Groups choose xi to maximize the following function: ui(xo;Z) – ci • ci = ci (i, si) • i = pressure you want to exert • si = strength function (function of power base)

  27. The b’s • Function of cost of generating power through penalties or rewards

  28. Power bases • Members’ political and social connections • “Social capital” among individuals in the community • Wealth, asset base • Socioeconomic status • Sources of income • Knowledge, skills, training at the collective level • Governance characteristics (structure, delegation of authority and decisionmaking processes, networking capital at the community level/external connections) • Peer pressure

  29. Z-characteristics • Resource characteristics • Forest size • Physical location (e.g. slope, altitude) • Ecological zones (e.g. tropical, temperate) • Pre-existing infrastructure (e.g. roads access) • Demographics

  30. Solving the model • Nash-Harsanyi bargaining solution among the centers and interest groups • Maximize “political governance function” – sum of the decision makers’ and group’s utility functions: W(xo) = max [Bk*uok(xo) +  bi*ui(xo)] where: Bk: weight for center’s marginal power to make decisions bi: weight for each interest group’s marginal strength of power over centers. Centers choose xo to maximize the function

  31. Modeling tactic and empirical strategy • Use revealed preference approach: • surmise objectives for each group • look at the outcomes (xo) • work backwards • dynamic game gives weight on b’s to explain what is observed • comparative statics to generate hypotheses

  32. Conclusions • Need attention to power, influence and accountability • Studies of access, devolution, SK, accountability • How measure accountability? • How identify actors? • Collecting data • Is this adequate?

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