Exploring the impact of tenure arrangements and incentives on sustainable forest use: Evidence from a framed-field experiment in Ethiopia

Abstract

The types of tenurial arrangements and incentives appropriate for the sustainable management of common pool resources (CPRs), such as forests, remain a topic of debate. In this study, we aim to (i) investigate the extraction level of forest resources under short and long-term property rights, and (ii) evaluate the effectiveness of introducing mechanisms that leverage reputation and feelings of guilt in promoting cooperation among CPR users with short-term property rights to reduce over-harvesting. We develop a simple theoretical model to predict the optimal extraction level of a shared forest resource and validate the predictions using data from a framed field experiment conducted in rural Ethiopia. Our findings demonstrate that extraction levels under short-term property rights are higher compared to long-term property rights, aligning with the model predictions. Leveraging reputation and feelings of guilt is effective in bridging the gap in extraction intensity between short- and long-term property rights. However, as implementing reputation requires reliable monitoring that can be costly and challenging in the study context, we propose extending the duration of property rights over shared forest resources as a preferred strategy for curtailing over-extraction.