Transaction Cost Analysis of Upstream-Downstream Relations in Watershed Services: Lessons from Community-Based Forestry Management in Sumatra, Indonesia
This study analyzes transaction costs occurred in the existing set-up of upstream-downstream relations and reward mechanisms of the watershed services in Sumatra, Indonesia. The rewards are manifested through property right reforms in terms of "recognition" and "loss of fear of eviction" among local communities to utilize land within the "protection forest", such as implemented under the community-based forestry management (CBFM) policy. The study sites of Sumber Jaya watershed in Sumatra, Indonesia has been notoriously known as a benchmark for conflict of watershed functions between the state and the society, and among stakeholders such as coffee growers, domestic water-users, hydroelectric power company, etc. Estimated transaction cost to implement the rewards is US$ 55 per household, a relatively high cost for rural standards. The component consists of costs of searching information (70%), organizing the group (27%), and enforcement of working rules and regulations (3%), implying a non-efficient economic organization of the society and non-clear policy structures at regional and national level. Roles of intermediaries such as NGO (national and international) are extremely important to implement the negotiation support system and develop multi- stakeholders strategy to reduce transaction costs, especially to ensure conflict resolutions, improve trusts and shared responsibility to achieve more sustainable resource management.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
More information through EDIRC
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.:
- Mburu, John & Birner, Regina & Zeller, Manfred, 2003. "Relative importance and determinants of landowners' transaction costs in collaborative wildlife management in Kenya: an empirical analysis," Ecological Economics, Elsevier, vol. 45(1), pages 59-73, April.
- Coase, Ronald, 1998. "The New Institutional Economics," American Economic Review, American Economic Association, vol. 88(2), pages 72-74, May.
- Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25788. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.