Forest conservation policy and motivational crowding: Experimental evidence from Tanzania

It has been hypothesized that the effectiveness of payments for ecosystem services (PES) programs could, in some cases, be undermined by motivational crowding out, the detrimental interaction between new material incentives and payees' pre-existing intrinsic incentives. Of particular concern is the possibility for motivational crowding out to linger longer than the PES program itself. We use a modified, forest conservation-framed dictator game to test for potential persistent motivational crowding out among famers in the East Usambara Mountains, Tanzania, a global biodiversity hotspot. We apply four stylized policy treatments: an individual payments type PES, where farmers are compensated individually for donations they make to a recipient group (an action representing forest conservation); a collective payments PES, where a group of farmers are compensated as a whole for their donations; and two mandated levels of contribution, low and high, backed by penalties. The PES treatments did not induce significant, persistent motivational crowding, and the mandate treatments showed some evidence of a positive effect (motivational crowding in) beyond the policy period. We also found that motivational crowding in and motivational crowding out tendencies coexist within our sample, and that the sample subsets exhibiting these behaviors can be predicted by socio-demographic and farm characteristics.