4. SOCIO-PSYCHOLOGICAL AND ENVIRONMENTAL FACTORS CONTRIBUTING TO THE SUPPLY OF SUCCESSFUL INSTITUTIONS

The previous chapter has discussed the role of macro policies in creating an enabling environment for the formation of institutions for collective action and also the economic viability of adopting NRM technologies. This chapter, in contrast, identifies some generic factors that underlie the propensity of individuals to voluntarily organize themselves into institutions. It is important to recognize these factors when designing a community-based NRM program. The next chapter will begin to elaborate the program strategies for catalyzing the supply of local institutions that are based on the generic factors outlined here.^[8]

4.1 INDIVIDUALS DISCOUNT FUTURE BENEFITS

Individuals attribute less value to benefits that they expect to receive in the distant future, and more value to those benefits that they expect to receive in the immediate future. The rate of discounting is affected by the degree of vulnerability (both physical and economic) which individuals feel. Where individuals have a high level of security (including security of tenure of landholdings) they tend to expect their children and their grandchildren to reap benefits of current investments; in other words, their internal discount rates are low. Where individuals have a high degree of insecurity, they tend to discount future returns more heavily than immediate returns because survival is a priority.

These observations are corroborated by Ostrom (1990) in analyzing institutions for collective action, Feder and Nishio (1997) in discussing the benefits of land registration and titling, and Esmail (1994) in conceptualizing rural peoples’ perceptions of poverty. Barbier and Bishop (1995) review empirical research that provides insights into the economic factors influencing a farmer’s decision to conserve or deplete soil. Their analysis found that some of the factors relate to the value the farmer attaches to future, as opposed to present, income. This, in turn, may reflect the farmer’s attitude to risk and uncertainty, as well as the level of household poverty and access to credit and off-farm income.

In general, NRM programs need to enhance the perceived levels of security so that discount rates are reduced and investments increased. The discount rate used by individuals in different environments also has important implications regarding the financial incentives that are required to encourage collective action and sustainable management of natural resource systems (these will be discussed further in section 0).

4.2 LOCAL ORGANIZATIONAL CAPACITY (LOC)

Uphoff (1997) and Narayan and Ebbe (1997) define local organizational capacity as the ability of people to work together, trust one another, and organize to solve problems, mobilize resources, resolve conflicts, and network with others to achieve agreed-upon goals. LOC is related to shared norms, behavior, beliefs and values.^[9] It is an expression of social capital which is a concept advanced by Putnam (1993) when explaining how differences in regional prosperity in Italy could be related to the existence of various forms of civic associations. Social capital is characterized by the networks of civic institutions and associated norms of trust and reciprocity that facilitate cooperation and coordination. Trust, however, varies from one society to another. The presence or absence of trust is itself dependent on cultural differences, past traditions and traditional institutions (Seabright, 1993 and Fukuyama, 1995).

There is a growing body of empirical evidence to demonstrate that the level of social capital can have positive impacts on household welfare and also on improved delivery of services and resources. Narayan and Pritchett (1997) found that social capital in Tanzania has a greater impact on household welfare (measured through consumption and expenditure surveys) than household’s own physical assets, years of schooling, gender of household head, or the household’s own membership groups. Numerous studies on coping mechanisms of the poor have also shown that social capital is an asset in coping with vulnerability (Chambers, 1989). One of the positive aspects of collectivization policies promoted in the Former Soviet Union is that, after the collapse of the Union in 1992/93, many communities were able to cope with the harsh period of adjustment because of existing high levels of social capital.^[10] A number of other studies show the importance of social capital and the role of local organizational capacity in the delivery and management of sustainable services to the poor, creation and maintenance of physical infrastructure, management of natural resources, and provision of micro-savings and credit programs (see for example: Uphoff, 1986, 1996, 1997; Jodha, 1992 to name a few).

The propensity of a given society or community to voluntarily form an institution for collective action is therefore intrinsically linked to the level of indigenous LOC and social capital. The level of social capital, in some cases, reduces the importance of discount rates affecting participation in collective action. For example, it has been observed on a number of occasions that individuals are more willing to forgo immediate returns in order to gain larger joint benefits when they observe others following the same strategy (Uphoff, 1994). On the other hand, even if discount rates are low, individuals may not participate in collective action if there is a high degree of mistrust between households. Higher level of mistrust (and associated low levels of reciprocity) are often found in societies which are heterogeneous. For example, in many villages in India, caste, class and ethnic divisions impede the voluntary formation of institutions for collective action. Even if institution formation is externally catalyzed, the institutions can suffer from factionalism which ultimately leads to their collapse. Uphoff (1986) found that the tasks of local institutions in natural resource management are greatly simplified when the users are homogenous. Conflicts over natural resource use are less likely when users see themselves as unified by kinship, occupation, or some other basis.

Local organizational capacity is undoubtedly an important determinant for voluntary formation of local institutions for collective action. Putnam’s (1993) thesis would tend to suggest that LOC takes hundreds of years to reach a level sufficient for societal change. However, there are many examples of community-based programs which have managed to stimulate the formation of LOC during a much shorter time period of five to ten years. It should be recognized, therefore, that societies and communities have some base level of LOC. This capacity can be viewed as being “latent”. It can be stimulated through program interventions that provide the necessary incentives and support. Section 0 will discuss program design aspects that have been shown to be effective at releasing latent capacity and building LOC.

4.3 ENVIRONMENTAL CHARACTERISTICS

Populations living in areas where there are clear indicators of resource degradation are more willing to adopt new rules that will restrict their resource appropriation. This was observed by AKRSP(I) in western India. The willingness of individuals to organize for collective action was greatly enhanced during a drought period spanning three years in the late 1980s. During and following the drought, farmers began demanding AKRSP(I) services to construct groundwater recharge structures and micro-watershed management activities. The resource scarcity caused by the drought had resulted in many cases of individuals agreeing to collaborate in order to preserve their incomes and resources. For example, many livestock owners collectively hired trucks to transport cattle to feeding camps set up by government or to areas where fodder was still plentiful. Moreover, awareness about the extent of environmental degradation increased during the drought and it became painfully obvious that lack of water was a critical issue affecting the majority of the population. AKRSP(I), which had been struggling to organize individuals for community-based micro-watershed activities, began to notice increasing awareness amongst farmers and a greater propensity to self organize with the result that their program evolved to demand driven.

Populations living in marginal areas where productive land is scarce also have a greater propensity to self organize and adopt rules restricting appropriation. Usually, in order to settle marginal environments in the first place, populations will probably have had to work together in order to make the land productive. For example, AKRSP(P) operates in the mountainous region of northern Pakistan. The available land for cultivation is limited to glacial fluvial outwashes, valley bottoms, and terraced hillsides and mountains. Rainfall is low and agriculture is primarily irrigated through glacial meltwater transported by canal to terraced arable land. The existing terraces and irrigation canals where built through collective action organized by the ruling Mir over the last few hundred years. Population growth rate over the last 20 years has increased the pressure on land resources. However, the high population density has also lowered the opportunity cost of labor and therefore made it feasible to bring additional marginal land under cultivation. AKRSP(P) found it relatively easy (in comparison to AKRSP-I) to catalyze the population to self organize for collective action. The income benefits of bringing additional land under irrigated agriculture and of promoting intensive agriculture was clearly apparent to the population. In addition, the population already had a tradition of collective action and higher LOC which was evolved through the colonization of a fragile environment.

The relationship between resource scarcity and local initiative is, unfortunately, not as straightforward as mentioned above. Ostrom (1990) notes that in areas where resource units vary wildly from season to season (e.g. in semi-arid areas dependent upon rainfed agriculture), it is particularly difficult for resource users to obtain accurate estimates of average yields and to make reasoned judgments about the meaning of low yields. This was also the case in Western India. It required a severe and prolonged drought to make the population aware of the extent of resource scarcity which was previously not considered as being so extreme. Hobley and Shah (1997), in studying forest management systems in Nepal and India, found that self-catalyzed institutions for collective active are also dependent upon: local leadership, consensus on action to be taken, ability to enforce restrictions and confirmation from government that local organizational units are empowered to take such action. Therefore, equating resource scarcity with local action is useful as a broad planning tool. However, many other factors also need to be considered.