Voluntary Cooperation in the Provision of a Semi-public Good. Community-based Soil and Water Conservation in Semi-arid India.

Abstract

This dissertation analyses the question whether households in India’s semi-arid tropics can be expected to voluntarily maintain semi-public investments in soil and water conservation. Increasingly, public investment programs decentralise project planning, implementation and management to local communities, whereas it is unclear whether local communities can be expected to effectively manage these investments in the long run. The analysis in this dissertation suggests that to maintain a socially efficient level of soil and water conservation investments it is important that a strategic coalition of cooperative households exists. Also, the external environment plays an important role. Emerging labour markets, market access and resource scarcity all help determine whether individual households have an incentive to cooperate in semi-public good provision or not. Using experimental data on village trust levels, the analysis suggests that targeting investments at homogeneous communities might help improve project effectiveness, since communities with higher trust levels are more likely to maintain public investments than communities where trust is low. Finally, the analysis suggests that decentralising decision-making can also have a negative effect. When water is scarce, upstream investments in soil and water conservation might negatively affect farmers downstream. Hence, for community-based interventions to be welfare enhancing it is crucial that the potential externalities of decentralised decision-making are sufficiently addressed.