Newsletter #1 March 2008

Social capital and local environmental projects

eeLocal communities are increasingly being made responsible for the maintenance of roads, irrigation and sanitation infrastructure, water supply and schools. Community-based projects have become one of the fastest growing mechanisms of development assistance, the World Bank’s portfolio alone being estimated at USD 7 billion. Evidence of whether communities are successful in managing collective and semi-public structures is, however, scarce and little is known as to how the effectiveness of community-based approaches might be improved.
The main problem that needs to be addressed when managing collective and semi-public resources is that free-rider behaviour has to be controlled. Jetske Bouma analyzes in her PhD dissertation (Voluntary cooperation in the provision of a semi-public good: Community-based soil and water conservation in semi-arid India), whether we can assume that local communities will effectively control free-rider behaviour themselves. The literature on common pool resource management has established that communities are capable of managing collective and semi-public resources. However, most of this literature concentrates on traditional cases of community resource management, where, over time, communities established behavioural rules and internal sanctioning mechanisms to control free rider behaviour and coordinate resource use. In newly-established community-based projects such mechanisms are unlikely to play a role, and long-term maintenance will depend on incentives for voluntary cooperation.
Bouma’s analysis suggests that long-term voluntary cooperation requires the availability of social capital at the community level and a stable coalition of cooperative households with enough strategic power to make non-cooperative households join. The maintenance of semi-public investments in soil and water conservation also frequently depends on external incentives. In arid regions with little access to irrigation and severe poverty, even high levels of social capital might not be sufficient to ensure investment maintenance in the long run. Still, provided that investments generate sufficient benefits, targeting homogeneous communities is likely to help improve the effectiveness of the community-based approach. In more heterogeneous communities, external support might be required. Finally, the analysis suggests that upstream investments in rainwater harvesting and soil and water conservation might actually have adverse impacts downstream: if these are not accounted for, investing in soil and water conservation might actually reduce welfare at the basin scale.
Jetske Bouma has been working at IVM as an environmental and development economist since 1 February 2007. She conducted her PhD research while working at the International Water Management Institute in Hyderabad, India (2002-2005), writing her thesis at CentER graduate school, Tilburg University (2006-2007). Her dissertation is published in the CentER dissertation series, no 207, Tilburg University, Tilburg, The Netherlands. 
Jetske Bouma