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Policy instruments for sustainable land management: the case of highland smallholders in Ethiopia

  • Shiferaw, Bekele
  • Holden, Stein T.

Degradation of land continues to pose a threat to future food production potential in many developing economies. Various approaches, mainly based on command-and-control policies, have been tried (with limited success) in the past to encourage adoption of erosion-control practices by farm households. High transactions costs and negative distributional impacts on the welfare of the poor limit the usefulness of standards and taxes for soil and water conservation. One innovative approach is the use of interlinked contracts which create positive incentives for land conservation. This study analyses the social efficiency of such policies for erosion-control in the Ethiopian highlands using a non-separable farm household model. Incentive contracts linked with conservation seem to be promising approaches for sustainable resource use in poor rural economies. This may suggest that conservation programs should give greater consideration to better fine-tuning and mix of policies that help achieve both economic and environmental objectives.© 2000 Elsevier Science B.V. All rights reserved.

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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 22 (2000)
Issue (Month): 3 (April)
Pages: 217-232

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Handle: RePEc:eee:agecon:v:22:y:2000:i:3:p:217-232
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  1. Shiferaw, Bekele & Holden, Stein T., 1998. "Resource degradation and adoption of land conservation technologies in the Ethiopian Highlands: A case study in Andit Tid, North Shewa," Agricultural Economics, Blackwell, vol. 18(3), pages 233-247, May.
  2. repec:cup:cbooks:9780521311120 is not listed on IDEAS
  3. Bose, Gautam, 1993. "Interlinked contracts and moral hazard in investment," Journal of Development Economics, Elsevier, vol. 41(2), pages 247-273, August.
  4. Stefano Pagiola, 1996. "Price policy and returns to soil conservation in semi-arid Kenya," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 8(3), pages 225-271, October.
  5. Jeffrey T. LaFrance, 1992. "Do Increased Commodity Prices Lead To More Or Less Soil Degradation?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 36(1), pages 57-82, 04.
  6. repec:cup:cbooks:9780521322249 is not listed on IDEAS
  7. Shiferaw, Bekele & Holden, Stein, 1999. "Soil Erosion and Smallholders' Conservation Decisions in the Highlands of Ethiopia," World Development, Elsevier, vol. 27(4), pages 739-752, April.
  8. Holden, Stein T. & Shiferaw, Bekele & Wik, Mette, 1998. "Poverty, market imperfections and time preferences: of relevance for environmental policy?," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 105-130, February.
  9. Lutz, Ernst & Pagiola, Stefano & Reiche, Carlos, 1994. "The Costs and Benefits of Soil Conservation: The Farmers' Viewpoint," World Bank Research Observer, World Bank Group, vol. 9(2), pages 273-95, July.
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