When Needs Change Norms: Experimental Evidence that Income Shocks Undermine Norm-Driven Cooperation in Forest Commons

Forest protection contributes to climate change mitigation and biodiversity conservation.Yet negative income shocks can induce local forest users to increase extraction in order to cope with economic hardship. We study how social norms shape collaborative forest management when communities face an exogenous income shock. We implement an incentivized framed field experiment with 162 smallholder farmers in rural Ethiopia using an interactive dynamic resource extraction game. Farmers individually decide how many trees to harvest from a community forest: harvested trees yield private income, whereas unharvested trees generate group benefits. They do so under different experimental treatments—either with or without i) the presence of a negative income shock and ii) a previous activation of social norms—allowing us to causally identify mechanisms shaping forest management. We find that the activation of social norms fosters fully sustainable resource management in the absence of an income shock. Moreover, a different norm emerges when the community encounters an income shock: now, harvesting more than can sustainably regrow is considered socially appropriate and harvesting behavior adjusts accordingly. Yet without norm activation, the negative income shock puts even more pressure on deforestation. Taken together, these findings suggest that policy-makers should work with local communities to develop complementary institutional mechanisms that sustain collective forest management in times of crisis.