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Exploiting common resources with capital-intensive technologies: the role of external forces

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  • ENGEL, STEFANIE
  • LÓPEZ, RAMÓN

Abstract

This paper focuses on the interactions between local communities having at least some degree of informal claims over natural resources and firms interested in commercially exploiting such resources, explicitly allowing for interventions by third parties interested in community welfare and environmental outcomes. Integrating conflict and bargaining theories, we develop a bargaining model with endogenous inside and outside options, in which the feasibility and outcomes of a potential bargaining game depend on the unraveling of a conflict stage and vice versa. The model implies that, contrary to the conventional bargaining model, distribution and efficiency cease to be separable. We show that certain third-party interventions in the bargaining process may have unexpected and counterproductive effects.

Suggested Citation

  • Engel, Stefanie & López, Ramón, 2008. "Exploiting common resources with capital-intensive technologies: the role of external forces," Environment and Development Economics, Cambridge University Press, vol. 13(05), pages 565-589, October.
  • Handle: RePEc:cup:endeec:v:13:y:2008:i:05:p:565-589_00
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    Cited by:

    1. Stefanie Engel & Ramón López & Charles Palmer, 2006. "Community–Industry Contracting over Natural Resource use in a Context of Weak Property Rights: The Case of Indonesia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(1), pages 73-93, January.
    2. López, Ramón, 2010. "Global economic crises, environmental-resource scarcity and wealth concentration," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    3. Engel, Stefanie & Palmer, Charles, 2008. "Payments for environmental services as an alternative to logging under weak property rights: The case of Indonesia," Ecological Economics, Elsevier, vol. 65(4), pages 799-809, May.
    4. Stefanie Engel & Charles Palmer, 2011. "Complexities of Decentralization in a Globalizing World," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 157-174, October.

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