Assessing Collective Measures in Rural Policy: The Effect of Minimum Participation Rules on the Distribution of Benefits from Irrigation Infrastructure

Abstract

Despite the increasing interest from both policy makers and scholars in the collective management of natural resources in the rural sector, the literature has not covered many aspects of the incentives targeting collective actors. In this article, we analyze how embedding minimum participation rules in rural policies affect the distribution of benefits of a group of players that cooperate. The article applies the Shapley Value and the Nash-Harsanyi solution, two of the key solutions of cooperative game theory, to an incentive scheme in Emilia-Romagna (Italy) to support the construction of collective reservoirs for irrigation water. Results show that rules on the minimum storage capacity and on the minimum number of users affect the benefit distribution in opposite directions. The main conclusion of the article is that minimum participation rules should be carefully designed if welfare distribution is an issue. However, further studies are required to have a comprehensive assessment of minimum participation rules within rural policies.