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the role of property rights in natural resource management, good ...

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environment. These are significant achievements. Landowners and users “w<strong>in</strong>” as <strong>in</strong>dividuals but also derivecollective benefits from productive <strong>management</strong> <strong>of</strong> land. 18There are numerous benefits <strong>of</strong> <strong>the</strong> land tenure contracts: (i) <strong>the</strong> terms are solely at <strong>the</strong> discretion <strong>of</strong> <strong>the</strong>contract<strong>in</strong>g parties and not imposed by central authorities who are ostensibly promot<strong>in</strong>g development orenvironmental goals; (ii) <strong>the</strong>y are simple and clear; (iii) <strong>the</strong>y represent a step toward enhanced security <strong>in</strong> landhold<strong>in</strong>g (for both owners, whose historical <strong>rights</strong> are acknowledged, and borrowers, who have access toarable land for at least a guaranteed m<strong>in</strong>imum time period); and (iv) <strong>the</strong>y open <strong>the</strong> door for similarformalization between private parties wish<strong>in</strong>g to identify, have recognized and secure <strong>rights</strong> to a variety <strong>of</strong>land and o<strong>the</strong>r <strong>natural</strong> <strong>resource</strong> transactions.3.2.4 Balanc<strong>in</strong>g Equity and EfficiencySometimes solutions to <strong>natural</strong> <strong>resource</strong> concerns present trade<strong>of</strong>fs between efficiency (<strong>the</strong> greatest socialvalue for <strong>the</strong> least social cost) and equity (relative distribution <strong>of</strong> <strong>resource</strong>s among <strong>in</strong>dividuals and groups,particularly socially disadvantaged and marg<strong>in</strong>alized groups). However, <strong>the</strong>se two sets <strong>of</strong> issues are not<strong>in</strong>herently <strong>in</strong> opposition to one ano<strong>the</strong>r, and <strong>in</strong> many cases appropriate enabl<strong>in</strong>g arrangements enhanceefficiency <strong>in</strong> land and <strong>natural</strong> <strong>resource</strong> use while simultaneously address<strong>in</strong>g equity issues effectively.A debate that has long dom<strong>in</strong>ated <strong>the</strong> <strong>property</strong> <strong>rights</strong> discussion focuses on <strong>the</strong> efficiency and equityoutcomes <strong>of</strong> private or state <strong>property</strong> versus common <strong>property</strong> <strong>resource</strong>s. Many commentators argue thatprivate <strong>property</strong> or state control and managed regimes are more efficient than common <strong>property</strong> <strong>resource</strong>s(Hard<strong>in</strong>, 1968). To that end, private (<strong>in</strong>dividually) alienable <strong>property</strong> <strong>rights</strong> and market exchange have beenpromoted <strong>in</strong> <strong>the</strong> belief that <strong>the</strong>se will enhance decision-mak<strong>in</strong>g powers for <strong>the</strong> <strong>rights</strong> holders, and thusprovide critical <strong>in</strong>centives to avoid <strong>in</strong>efficiencies <strong>in</strong> <strong>the</strong> system. Common <strong>property</strong> regimes on <strong>the</strong> o<strong>the</strong>r handare <strong>of</strong>ten characterized as <strong>in</strong>efficient; as not provid<strong>in</strong>g <strong>in</strong>dividuals proper <strong>in</strong>centives to <strong>in</strong>vest and act <strong>in</strong> asocially efficient manner. Three ma<strong>in</strong> sources <strong>of</strong> <strong>in</strong>efficiencies associated with common <strong>property</strong> <strong>rights</strong> havebeen identified (Ostrom, 2002): (i) rent dissipation, that is, <strong>in</strong>ability to capture value from communal use; (ii)high transaction costs <strong>of</strong> controll<strong>in</strong>g and exclud<strong>in</strong>g non-members, as well as enforcement costs <strong>in</strong> terms <strong>of</strong>devis<strong>in</strong>g, monitor<strong>in</strong>g and apply<strong>in</strong>g rules that encourage susta<strong>in</strong>able use; and (iii) low productivity, that is, lack<strong>of</strong> <strong>in</strong>centive to <strong>in</strong>vest <strong>in</strong> a <strong>resource</strong> or even to benefit from that <strong>resource</strong>. Ostrom ma<strong>in</strong>ta<strong>in</strong>s that <strong>the</strong>se areproblems that all common <strong>property</strong> arrangements have to overcome.Careful analysis <strong>of</strong> common <strong>property</strong> <strong>rights</strong> suggests that where associated <strong>in</strong>stitutional arrangements arestrong, such <strong>rights</strong> can help achieve very high degrees <strong>of</strong> efficiency <strong>in</strong> use <strong>of</strong> <strong>natural</strong> <strong>resource</strong>s. Indeed, wellfunction<strong>in</strong>gcommon <strong>property</strong> regimes are <strong>of</strong>ten characterized by high legitimacy, high levels <strong>of</strong> voluntarycompliance, low levels <strong>of</strong> disputes, resilience and ability to adapt to chang<strong>in</strong>g socioeconomic contexts—particularly sudden shocks such as droughts (McKean, 1992), as well as greater sense <strong>of</strong> equity <strong>in</strong> terms <strong>of</strong>distribution <strong>of</strong> benefits derived from <strong>resource</strong> (Gibbs and Bromley, 1989). Fur<strong>the</strong>rmore, <strong>resource</strong>s such aspastures, where costs <strong>of</strong> monitor<strong>in</strong>g and enforcement may require extensive <strong>in</strong>vestments, group governancemay be more cost-effective than governance by <strong>in</strong>dividuals. 19 Moreover, rural poor <strong>in</strong> particular are heavilydependent on common <strong>property</strong> <strong>resource</strong>s for <strong>the</strong>ir livelihood. For <strong>the</strong>se communities, governance and<strong>management</strong> costs are <strong>of</strong>ten outweighed by benefits derived from govern<strong>in</strong>g and manag<strong>in</strong>g <strong>the</strong> <strong>resource</strong>(Hanna, 1995). Given repeated failures <strong>in</strong> <strong>management</strong> <strong>of</strong> state-owned <strong>resource</strong>s and <strong>in</strong> many cases excessiveexploitation <strong>of</strong> <strong>resource</strong>s by states, common <strong>property</strong> regimes provide relatively effective systems for<strong>management</strong> <strong>of</strong> <strong>natural</strong> <strong>resource</strong>s and prevention <strong>of</strong> ecological degradation <strong>in</strong> specific circumstances.18For a more detailed discussion <strong>of</strong> formal recognition <strong>of</strong> customary <strong>rights</strong>, see Fitzpatrick (2005), Toulm<strong>in</strong> et al. (2002), and Toulm<strong>in</strong> andQuan (2000).19In arid pastures, <strong>in</strong> particular, where ra<strong>in</strong>fall patterns are unpredictable, divid<strong>in</strong>g common <strong>property</strong> pastures <strong>in</strong>to <strong>in</strong>dividual parcels maywell be doomed to failure. Extensive pastoral systems are <strong>of</strong>ten <strong>the</strong> only efficient production systems <strong>in</strong> such circumstances.ROLE OF PROPERTY RIGHTS IN NRM: GOOD GOVERNANCE AND EMPOWERMENT OF THE RURAL POOR 25

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