Property Rights and Natural Resource Management in Developing Countries

Abstract

As forestland and grazing land grow scarcer and rural poverty persists in developing countries, sustainable natural resource management (NRM) for income generation and poverty reduction is imperative. Although securing property rights on forestlands is fundamental for sustainable resource management, the conditions under which one institution outperforms the others in the efficiency of forest management have not yet reached a consensus. In contrast, forest management under common property regimes (e.g., community forest management) is commonly adopted in developing countries in Asia and Africa. As argued by Ostrom, community forest management is effective in protecting forest resources, but it may fail to provide proper incentives for intensive forest management activities. This paper argues that the community management system performs efficiently for non-timber forests, whereas a mixed management system of private and common ownership is a desirable institution for timber forest management in developing countries. This empirical research conducted a randomized experiment in Ethiopia and confirmed that the mixed management system significantly stimulated intensive forest management activities, such as pruning, guarding, and watering.