Hostname: page-component-848d4c4894-4hhp2 Total loading time: 0 Render date: 2024-05-19T07:19:59.442Z Has data issue: false hasContentIssue false

Payments for ecosystem services: durable habits, dubious nudges, and doubtful efficacy

Published online by Cambridge University Press:  09 January 2014

JUHA HIEDANPÄÄ*
Affiliation:
Finnish Game and Fisheries Research Institute, Turku, Finland
DANIEL W. BROMLEY
Affiliation:
University of Wisconsin-Madison, Madison, WI, USA

Abstract:

Payments for ecosystem services (PES) have become a popular approach to bring about improved environmental behaviors. When such programs are launched in developing countries, an additional benefit is that they are said to improve incomes for the poor. In this paper, we argue that PES schemes are not ‘market-based’. Indeed, they are not even ‘market-like’. The incentive properties said to be present in such programs are of doubtful efficacy. We suggest that PES schemes are instances of a new class of transaction – the inducing transaction – whose purpose is to make certain resource users the instruments of the desires of others. We relate the success of PES schemes to Veblenian ‘habituation’ and Peircean ‘habit breaking and habit taking’ to suggest that PES schemes face a daunting challenge if they are to bring about durable behavioral changes.

Type
Research Article
Copyright
Copyright © Millennium Economics Ltd 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arriagada, R., Ferraro, P., Sills, E., Pattanayak, S., and Cordero, S. (2012), ‘Do Payments for Environmental Services Affect Forest Cover? A Farm-Level Evaluation from Costa Rica’, Land Economics, 88 (2): 382399.CrossRefGoogle Scholar
Bromley, D. W. (1991), Environment and Economy: Property Rights and Public Policy, Oxford: Blackwell.Google Scholar
Bromley, D. W. (2006), Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions, Princeton, NJ: Princeton University Press.Google Scholar
Bromley, D. W. (2008), ‘Resource Degradation in the African Commons: Accounting for Institutional Decay’, Environment and Development Economics, 13 (5): 5396308.CrossRefGoogle Scholar
Bromley, D. W. (2009), ‘Formalising Property Relations in the Developing World: The Wrong Prescription for the Wrong Malady’, Land Use Policy, 26 (1): 2027.CrossRefGoogle Scholar
Chang, H.-J. (2011), ‘Institutions and Economic Development: Theory, Policy and History’, Journal of Institutional Economics, 7 (4): 473498.CrossRefGoogle Scholar
Clark, A. (1997), ‘Economic Reason: The Interplay of Individual Learning and External Structure’, in Drobak, J. N. and Nye, J. V. C. (eds.), The Frontiers of the New Institutional Economics, San Diego, CA: Academic Press.Google Scholar
Commons, J. R. (1995), Legal Foundations of Capitalism (original 1924), London: Macmillan.Google Scholar
Commons, J. R. (1990), Institutional Economics: Its Place in Political Economy (original 1934), London: Macmillan.Google Scholar
Commons, J. R. (1931), ‘Institutional Economics’, American Economic Review, 21 (4): 648657.Google Scholar
Deacon, T. (2012), Incomplete Nature: How Mind Emerged from Matter, New York: W. W. Norton & Company.Google Scholar
Dedeurwaerdere, T. (2005), ‘From Bioprospecting to Reflexive Governance’, Ecological Economics, 53 (4): 473491.CrossRefGoogle Scholar
Dewey, J. (1988), Human Nature and Conduct. The Middle Works of John Dewey, Volume 14, 18991924, Carbondale, IL: Southern Illinois University Press.Google Scholar
de Soto, H. (2000), The Mystery of Capital, New York: Basic Books.Google Scholar
Duhigg, C. (2012), The Power of Habit, New York: Random House.Google Scholar
Ferraro, P. J. (2001), ‘Global Habitat Protection: Limitations of Development Interventions and a Role for Conservation Performance Payments’, Conservation Biology, 15 (4): 9901000.CrossRefGoogle Scholar
Ferraro, P. J. (2008), ‘Asymmetric Information and Contract Design for Payments for Environmental Services’, Ecological Economics, 65 (4): 811822.CrossRefGoogle Scholar
Ferraro, P. J. (2011), ‘The Future of Payments for Environmental Services’, Conservation Biology, 25 (6): 11341138.CrossRefGoogle ScholarPubMed
Ferraro, P. J. and Kiss, A. (2002), ‘Direct Payments to Conserve Biodiversity’, Science, 298 (5599): 17181720.CrossRefGoogle ScholarPubMed
Folke, C. (2006), ‘Resilience: The Emergence of a Perspective for Social–Ecological Systems Analyses’, Global Environmental Change, 16 (3): 253267.CrossRefGoogle Scholar
Hartshorn, G., Ferraro, P., Spergel, B., and Sills, E. (2005), Evaluation of the World Bank—GEF Ecomarkets Project in Costa Rica, Durham: North Carolina State University.Google Scholar
Hiedanpää, J. (2002), ‘European-wide Conservation vs. Local Well-being: The Reception of Natura 2000 Reserve Network in Karvia, SW-Finland’, Landscape and Urban Planning, 61 (2–4): 113123.CrossRefGoogle Scholar
Hiedanpää, J. and Bromley, D. W. (2012), ‘Contestation Over Biodiversity Policy: Considering Peircean Semiosis’, Environmental Values, 21 (3): 357378.CrossRefGoogle Scholar
Hiedanpää, J., Kotilainen, J., and Salo, M. (2011), ‘Unfolding the Organised Irresponsibility: Ecosystem Approach and the Quest for Forest Biodiversity in Finland, Peru, and Russia’, Forest Policy and Economics, 13 (3): 159165.CrossRefGoogle Scholar
Hodgson, G. M. (1997), ‘The Ubiquity of Habits and Rules’, Cambridge Journal of Economics, 21 (6): 663684.CrossRefGoogle Scholar
Hodgson, G. M. (1998), ‘The Approach of Institutional Economics’, Journal of Economic Literature, 36 (1): 166192.Google Scholar
Hodgson, G. M. (2004), The Evolution of Institutional Economics: Agency, Structure and Darwinism in American Institutionalism, London: Routledge.Google Scholar
Hodgson, G. M. and Knudson, T. (2012), Darwin's Conjecture: The Search for the General Principles of Social and Economic Evolution, Chicago: University of Chicago Press.Google Scholar
Hulswit, M. (2002), From Cause to Causation: A Peircean Pespective, Philosophical Studies Series 90, Dortdrecht: Kluwer Academic Press.CrossRefGoogle Scholar
Hutchins, E. (1996), Cognition in the Wild, Massachusetts, Boston: MIT Press.CrossRefGoogle Scholar
Joas, H. (1996), The Creativity of Action, Chicago: University of Chicago Press.Google Scholar
Juutinen, A., Mäntymaa, E., Mönkkönen, M., and Svento, R. (2008), ‘Voluntary Agreements in Protecting Privately Owned Forests in Finland — To Buy or to Lease’, Forest Policy and Economics, 10 (4): 230239.CrossRefGoogle Scholar
Kerekes, C. B. and Williamson, C. R. (2008), ‘Unveiling De Soto's Mystery: Property Rights, Capital Formation and Development’, Journal of Institutional Economics, 4 (3): 299325.CrossRefGoogle Scholar
Kronman, A. T. (1985), ‘Contract Law and the State of Nature’, Journal of Law, Economics, and Organization, 1 (1): 532.Google Scholar
Lacetera, N., Macis, M., and Slonin, R. (2013, 24 May), ‘Economic Rewards to Motivate Blood Donation’, Science, 340: 927928.CrossRefGoogle Scholar
Larson, B. A. and Bromley, D. W. (1990), ‘Property Rights, Externalities, and Resource Degradation: Locating the Tragedy’, Journal of Development Economics, 33 (2): 235262.CrossRefGoogle Scholar
MacIntyre, A. (1984), After Virtue, Notre Dame: Notre Dame University Press.Google Scholar
Martin, C. (1978), ‘The War Between Indians and Animals’, Natural History, 87 (6): 9296.Google Scholar
Milder, J. C., Scherr, S. J., and Bracer, C. (2010), ‘Trends and Future Potential of Payment for Ecosystem Services to Alleviate Rural Poverty in Developing Countries’, Ecology and Society 15 (2): 4, http://www.ecologyandsociety.org/vol15/iss2/art4/.CrossRefGoogle Scholar
Ormerod, P. (1998), Butterfly Economics: A New General Theory of Social and Economic Behavior, New York: Pantheon Books.Google Scholar
Peirce, C. S. (1934), Collected Papers of Charles S. Peirce, 8 vols., Hartshorne, C. and Weiss, P. (vols. 1–6) and Burks, A. (vols. 7–8). 8 eds., Cambridge, MA: Harvard University Press.Google Scholar
Peirce, C. S. (1998), The Essential Peirce: Selected Philosophical Writings, Vol. 2 (1892–1913), Bloomington: Indiana University Press.Google Scholar
Quellette, J. A. and Wood, W. (1998), ‘Habit and Intention in Everyday Life: The Multiple Processes by which Past Behavior Predicts Future Behavior’, Psychological Bulletin, 124 (1): 5474.CrossRefGoogle Scholar
Ramstad, Y. (1990), ‘The Institutionalism of John R. Commons: Theoretical Foundations of a Volitional Economics’, in Samuels, W. (ed.), Research in the History of Economic Thought and Methodology, Boston: JAI Press, pp. 53104.Google Scholar
Ramstad, Y. (1996), ‘Is A Transaction a Transaction?’, Journal of Economic Issues, 30 (2): 413425.CrossRefGoogle Scholar
Reynolds, A. (2002), Peirce's Scientific Metaphysics: The Philosophy of Change, Law, and Evolution, Nashville: Vanderbilt University Press.Google Scholar
Sagoff, M. (2011), ‘The Quantification and Valuation of Ecosystem Services’, Ecological Economics, 70 (3): 497502.CrossRefGoogle Scholar
Shackle, G. L. S. (1961), Decision, Order and Time in Human Affairs, Cambridge: Cambridge University Press.Google Scholar
Shelley, B. G. (2011), ‘What should we call instruments commonly known as payments for environmental services? A review of the literature and a proposal’, Annals of the New York Academy of Sciences, 1219: 209225. DOI:10.1111/j.1749-6632.2010.05941.xGoogle Scholar
Simon, H. (1987), ‘Rationality in Psychology and Economics’, in Hogarth, R. and Reder, M. W. (eds.), Rational Choice, Chicago: University of Chicago Press.Google Scholar
Spinks, C. W. (1991), Peirce and Triadomania: A Walk in the Semiotic Wilderness, Berlin: Mouton de Gruyter.CrossRefGoogle Scholar
Sunstein, C. (2013), Simpler: The Future of Government, New York: Simon & Schuster.Google Scholar
Vatn, A. (2005), Institutions and the Environment, London: Edward Elgar.Google Scholar
Vatn, A. and Bromley, D. W. (1994), ‘Choices Without Prices Without Apologies’, Journal of Environmental Economics and Management, 26 (2): 129148.CrossRefGoogle Scholar
Veblen, T. (1898), ‘Why is Economics Not an Evolutionary Science?’, The Quarterly Journal of Economics, 12 (4): 373397. (Reprinted in: Veblen, T. (1990), The Place of Science in Modern Civilization, New Brunswick, NJ: Transaction Publishers, pp. 56–81.)Google Scholar
Williamson, O. E. (2002), ‘The Theory of the Firm as Governance Structure: From Choice to Contract’, Journal of Economic Perspectives, 16 (3): 171195.CrossRefGoogle Scholar
Williamson, O. E. (2005), ‘The Economics of Governance’, American Economic Review, 95 (2): 118.CrossRefGoogle Scholar
Wunder, S. (2005), ‘Payments for Environmental Services: Some Nuts and Bolts’, Occasional Paper No. 42, CIFOR.Google Scholar