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Inequality and Conservation on the Local Commons: A Theoretical Exercise

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Author Info
Jeff Dayton-Johnson (Department of Economics, Dalhousie University, Halifax, Nova Scotia)
Pranab Bardhan (Department of Economics, University of California, Berkeley)

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Abstract

To analyze the effect of asset inequality on cooperation within a group, we consider a two-player noncooperative model of conservation of a common-pool resource (CPR): a fishery. We give necessary and sufficient conditions such that conservation is a Nash equilibrium, and we show that increasing inequality does not, in general, favor full conservation. However, once inequality is sufficiently great, further inequality may push the players closer to efficiency. Thus the relationship between inequality and economic efficiency is U-shaped. We analyze the implications for conservation if players have earning opportunities outside the commons. Finally, we consider various schemes of community regulation of the commons in the light of the noncooperative model with or without exit options. We find that increases in inequality may restrict the range of implementable mechanisms.

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Paper provided by Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley in its series Center for International and Development Economics Research, Working Paper Series with number 1039.

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Date of creation: 09 Jun 1996
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Handle: RePEc:cdl:ciders:1039

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Keywords: collective action; common property; exit options; inequality; international economics;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September. [Downloadable!] (restricted)
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  6. Bardhan, Pranab, 2000. "Irrigation and Cooperation: An Empirical Analysis of 48 Irrigation Communities in South India," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 847-65, July.
  7. Pranab Bardhan & Maitreesh Ghatak, 2000. "Inequality, Market Imperfections, and Collective Action Problems," Public Economics 0004001, EconWPA. [Downloadable!]
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  8. Bardhan, Pranab, 1993. "Symposium on Management of Local Commons," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 87-92, Fall. [Downloadable!] (restricted)
  9. Benhabib, Jess & Rustichini, Aldo, 1996. " Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-42, March.
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  12. Pranab Bardhan., 1993. "Rational Fools and Cooperation in a Poor Hydraulic Economy," Center for International and Development Economics Research (CIDER) Working Papers C93-015, University of California at Berkeley.
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  15. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  1. McCarthy, Nancy, 2004. "The relationship between collective action and intensification of livestock production: the case of Northeastern Burkina Faso," CAPRi working papers 34, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Dwayne Benjamin & Loren Brandt & John Giles, 2004. "The Evolution of Income Inequality in Rural China," William Davidson Institute Working Papers Series 2004-654, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  3. Khwaja, Asim Ijaz, 2001. "Can Good Projects Succeed in Bad Communities? Collective Action in the Himalayas," Working Paper Series rwp01-043, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  4. Aggarwal, Rimjhim & Narayan, Tulika A., 2000. "Does Inequality Lead To Greater Efficiency In The Use Of Local Commons? The Role Of Strategic Investments In Capacity," Working Papers 28572, University of Maryland, Department of Agricultural and Resource Economics. [Downloadable!]
  5. Pranab Bardhan & Jean-Marie Baland & Sanghamitra Das & Dilip Mookherjee & Rinki Sarkar, 2002. "The Environmental Impact of Poverty: Evidence from Firewood Collection in Rural Nepal," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-126, Boston University - Department of Economics. [Downloadable!]
  6. Pranab Mukhopadhyay, 2008. "Heterogeneity, Commons and Privatization: Agrarian Institutional Change in Goa," Working Papers id:1777, esocialsciences.com. [Downloadable!]
  7. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," NBER Working Papers 10313, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Dwayne Benjamin & Loren Brandt & John Giles, 2006. "Inequality and Growth in Rural China: Does Higher Inequality Impede Growth?," IZA Discussion Papers 2344, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Schiff, Maurice, 2004. "On the Inefficiency of Inequality," IZA Discussion Papers 1283, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Rucha Ghate, 2008. "Ensuring ‘Collective Action’ in ‘Participatory’ Forest Management," Working Papers id:1759, esocialsciences.com. [Downloadable!]
  11. Sarker, Debnarayan & Das, Nimai, 2006. "A Study of Economic Outcome of Joint Forest Management Programme in West Bengal: The Strategic Decisions between Government and Forest Fringe Community," MPRA Paper 14875, University Library of Munich, Germany, revised 2007. [Downloadable!]
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  12. Balasubramanian R, 2008. "Poverty, Private Property and Common Pool Resource Management: The Case of Irrigation Tanks in South India," Working Papers id:1735, esocialsciences.com. [Downloadable!]
  13. Pranab Bardhan & Maitreesh Ghatak, 1999. "Inequality, Market Imperfections, and Collective Action Problems," Center for International and Development Economics Research, Working Paper Series 1014, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
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  14. Das, Nimai & Sarker, Debnarayan, 2006. "Reforms in Forest Management in West Bengal: A Game of Strategic Profile," MPRA Paper 14803, University Library of Munich, Germany, revised 2007. [Downloadable!]
  15. Stephan Kroll & Todd Cherry & Jason Shogren, 2007. "The impact of endowment heterogeneity and origin on contributions in best-shot public good games," Experimental Economics, Springer, vol. 10(4), pages 411-428, December. [Downloadable!] (restricted)
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  16. Juan Camilo Cardenas, 2002. "Real Wealth and Experimental Cooperation: Evidence from Field Experiments," Artefactual Field Experiments 0017, The Field Experiments Website. [Downloadable!]
  17. Russell Davidson & Adriana Cornea, 2008. "A Refined Bootstrap For Heavy Tailed Distributions," Departmental Working Papers 2008-03, McGill University, Department of Economics. [Downloadable!]
  18. Suman Ghosh & Alexander Karaivanov & Mandar Oak, 2005. "A Case for Bundling Public Goods Contributions?," Working Papers 05005, Department of Economics, College of Business, Florida Atlantic University. [Downloadable!]
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  19. Tarui, Nori, 2004. "Common-Property Resource Use And Outside Options: Cooperation Across Generations In A Dynamic Game," 2004 Annual meeting, August 1-4, Denver, CO 20029, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  20. Araujo, M. Caridad & Ferreira, Francisco H.G. & Lanjouw, Peter & Ozler, Berk, 2006. "Local inequality and project choice : theory and evidence from Ecuador," Policy Research Working Paper Series 3997, The World Bank. [Downloadable!]
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  21. Ngo Van Long & Shengzu Wang, 2008. "Resource-Grabbing By Status-Conscious Agents," Departmental Working Papers 2008-08, McGill University, Department of Economics. [Downloadable!]
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