Forest conservation policy and motivational crowding: Experimental evidence from Tanzaniawca2014-LA-041 Brent Swallow 1,*
Agroforestry adoption and forest conservation is being increasingly promoted through the use of incentive-based policy. One such policy is payments for ecosystem services (PES), which provide direct incentives to landholders to undertake agroforestry or forestry activities which produce environmental benefits. The use of PES has been questioned, however, due to the possibility for motivational crowding out: the detrimental interaction between a new monetary incentive and the pre-existing incentive structure that governs farmers’ behavior. Motivational crowding out can cause a policy to under-achieve the expected benefit, or lead to a net negative effect. Of particular concern for policy designers is the tendency for motivational crowding effects to linger longer than the policy itself. In this study we used an experimental economics technique – a modified dictator game – to test farmers’ responses to four stylized policy types: an individual payments type PES, where farmers were compensated for any contribution they made to a public good (representing forest or agroforest), a collective type PES where a group of farmers were compensated as a whole for their contributions, and low and high level regulations, where farmers were told they must contribute to the public good. The study site is the East Usambara Mountains, Tanzania, a global biological hotspot where agroforestry is a prominent land use. The stylized PES did not show evidence of motivational crowding out beyond the life of the policy, and the regulation treatments showed some evidence of the opposite: a positive effect beyond the life of the policy. The collective PES treatment was ineffective at eliciting contributions to the public good. Results were varied within the sample, with farmers with larger landholdings, women, and farmers not born in the village exhibiting crowding out behavior due to PES. Our results provide experimental evidence that overall motivational crowding may not be a large cause for concern regarding the use of PES policies for agroforestry and forest conservation.