Biodiversity Conservation under ICDPs in a Bioeconomic Model: Nonprofit vs For-Profit National Parks

Integrated conservation development projects (ICDPs) are considered important for enhancing biodiversity conservation and local development in developing countries. These projects usually share benefits with local communities and incorporate locals in biodiversity management. While some studies shed light on the effectiveness of ICDPs in biodiversity conservation, most of them do not consider the employment of locals in biodiversity management. Moreover, existing literature assumes that national parks are for-profit organizations whereas they are generally nonprofit entities. We develop a bioeconomic model to investigate the effect of introducing ICDPs in nonprofit as well as for- profit national parks with the employment of local labor in tourism on biodiversity conservation. We demonstrate that there are conditions for the ICDP to be successful in enhancing biodiversity. Under these conditions, if biodiversity improves or has no impact on agricultural productivity, the nonprofit national parks invariably bring higher utility to locals and improve biodiversity than for-profit national parks. Otherwise, nonprofit national parks do not necessarily bring higher utility to locals or improve biodiversity, as compared to for-profit national parks. Moreover, the ICDP is evaluated in terms of social welfare, and we show that a subsidy/taxation on wage rates will bring the market equilibrium to a social optimum.