Deforestation in Tanzania’s East Usambaras: Sticks, Carrots and the ‘Crowding Out’ effect

David Kaczan

M.Sc Student

Brent Swallow

Professor and supervisor

Vic Adamowicz

Professor and co-supervisor

Delia Catacutan

ICRAF co-supervisor

What is the ‘Crowding Out’ effect, and why does it matter?

Framing

Self determination

Information conveyance

Endogenous preferences

(Reyes et al. 2006; Burgess et al. 2007)

The Context

•3300 km2 of sub montane and montane forest

•A Biodiversity hotspot: “...the highest ratio of endemic flora and fauna per 100 km2 of all biodiversity hotspots in the world”

•35 % of species endemic

•Other important ecosystem functions: water provision, local climate

(Reyes, et al. 2006)

Human Impact

Reyes et al. (2007)

•60 percent of forest cover lost in East Usambaras

•26 percent of remaining forest has cardamom

Hall, 2006

Conservation efforts

•Forest reserves, Amani nature reserve, Deremacorridor

•What about incentive schemes (PES)?

•If so, how would you design such a scheme for maximum effectiveness?

Intervention Points> 100 percent compensation

(- altruism / pro social)

No compensation?(Knowledge transfer,

Credit)

> 50 percent compensation (- altruism / pro social)

But: if PES is used, is there a danger that economic incentives could ‘crowd out’ pre existing altruistic/pro social incentives?

A research question

Approach 1: Experiments

Precedents, mechanisms?

Experimental design: dictator game

30 Tsh

50 Tsh

20 Tsh

40 Tsh

50 Tsh

20 Tsh

Donated to passive group

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

1 3 5 7 9 11 13 15 17 19 21 23 25 27

Period

Control PES treatment

Control (average) PES (average)

Not Significant Significant

Dictator game: stylized PES

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

1 3 5 7 9 11 13 15 17 19 21 23 25 27

Period

Control Enforcement - high

Control (average) Enforcement - high (average)

Significant Not significant

Dictator game: stylized enforcement (high)

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

1 3 5 7 9 11 13 15 17 19 21 23 25 27

Period

Control Enforcement - low (average)

Control (average) Enforcement - low

Not Significant Not significant

Dictator game: stylized enforcement (low)

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

1 3 5 7 9 11 13 15 17 19 21 23 25 27

Period

Control PES - collective

Control (average) PES collective (average)

Significant Significant

Dictator game: stylized PES (collective)

62%

23%

11%

2.5%

0%

10%

20%

30%

40%

50%

60%

70%

No payment but provision for

village infrastructure

Individual payment of

Tsh2000

Payment of Tsh2000

transferred to village

committee

Disagree/Need additional

options

Experiment II: Which of the payment options will you prefer? (n=194)

Vardhan, 2010 (unpublished)

Vardhan, 2010 (unpublished)

97%

82% 76%74%

64%

0%

20%

40%

60%

80%

100%

120%

High individual payment (Tsh1000)

offered

No mention of payment

High social payment (Tsh 1000) offered

Payment mentioned

but not offered

Low individual

payment (Tsh 200 offered)

Experiment I: Will your neigbor participate under these payment options? (n=194)

In summary...

•Preliminary evidence suggests crowding out for rewards, less so for enforcements

• Fact of enforcement may be more important than its magnitude

•Contrary to other studies, but some similarities with Vardhan?

•Collective payment unsuccessful

“First do no harm....”

With thanks…

to supervisors B. Swallow, V. Adamowicz and D. Catacutan;

field assistants F. Njilima, V. Mkongewa, Y. Mwaikio and A. Kajiru;

administrators at ICRAF Tanzania and Kenya;

and valuable, regular advice from H. Vihemaki, S. Rantala and R. Bullock