Daniela Miteva & Subhrendu Pattanayak Duke University

 Mixed evidence from empirical models  The outcome depends on the context ▪ Different mechanisms at play!  Very few studies on the impact on conservation policies  Pfaff et al, 2011: Federal vs. State PAs  Engel et al (Forthcoming): game theoretic model between PA managers and communities

 Seem to work on average  Evidence from Latin America and Thailand mostly  Heterogeneity by PA type  Multi-use PA more effective than strict PAs at preventing forest fires (Nelson & Chomitz, 2011)  Heterogeneity by geographic attributes  PAs more effective close to cities (e.g. Ferraro et al, 2011; Nelson & Chomitz, 2011; Pfaff & Robalino, 2012)  PAs not effective in poor areas (Ferraro et al, 2011)

 Significant increase in district government authority  District gov’t regulate logging  Significant increase in community role  Obtained weak property rights of forest resources  Can elect district governments  Corruption  Weak PA enforcement  District splitting: 292 districts in >483 in 2008

Other districts in the province (timber market) Timber prices Quantities of logging permits (Cournot model) District government Logging firms Communities Electoral participa tion Bargaining Logging vs. no logging PAs effective or not Corruption

Profits Community benefits Community willing to bargain Firm willing to bargain No bargaining Logging PAs ineffective No bargaining No logging PAs effective Bargaining Adapted from Engel et al (2006) Logging unprofitable I II III

Net revenue Community benefits Community willing to bargain Firm willing to bargain No bargaining Logging No bargaining No logging Logging unprofitable Bargaining

Profits Community benefits Community willing to bargain Firm willing to bargain No bargaining Logging PAs ineffective No bargaining No logging Logging unprofitable Bargaining

 Electoral participation increases PA effectiveness (makes logging costlier)  PA effectiveness depends on the type of PA and the proximity to major cities (role of tourism)  IUCN II (national parks) close to major cities are likely to have the greatest impact  Baseline poverty & forest dependence are likely to decrease the effectiveness of PAs

 L*=fn(accessibility, proximity to ports, local markets and large cities, baseline forest, forest dependence, poverty, voters, presence & type of PA, timber prices)  DID matching methods (within a province)  PLM for heterogeneity Endogenous placement No data, change through time

HighLow 0.65%** 0 1% 0.38%** -0.27%* 1.5% 0.5% -0.5% Electoral participation HighLow Forest dependence Probability of fire

 Burgess, R., Hansen, M., Olken, B. A., Potapov, P., & Sieber, S. (Forthcoming). The Political Economy of Deforestation in the Tropics. Quartterly Journal of Economics  Deaton, A. (2010),'Understanding the Mechanisms of Economic Development', Journal of Economic Perspectives, 24(3),  Engel, S., López, R., & Palmer, C. (2006). Community–Industry Contracting over Natural Resource use in a Context of Weak Property Rights: The Case of Indonesia. Environmental and Resource Economics, 33(1), doi: /s  Fox, J. J., Adhuri, D. S., & Resosudarmo, I. P. (2005). Unfinished edifice or Pandora's box? Decentralization and resource management in Indonesia. In B. Resosudarmo (Ed.), The politics and economics of Indonesia's natural resources (pp ). Singapore: Institute of Southeast Asian Studies.  Larson, A. M., & Soto, F. (2008). Decentralization of Natural Resource Governance Regimes. Annual Review of Environment and Resources, 33(1), doi: doi: /annurev.environ  Miteva, D. A., Pattanayak, S. K., & Ferraro, P. J. (2012). Evaluation of biodiversity policy instruments: What works and what doesn't? Oxford Review of Economic Policy, 28(2).  Pfaff A, Robalino J, & Herrera LD (2011) Decentralization given environment-development tradeoffs: Federal versus state conservation and impacts on Amazon deforestation. Working paper  Ravallion, M. (2009),'Evaluation in the Practice of Development', The World Bank Research Observer, 24(1),  Shleifer, A., & Vishny, R. W. (1998). The grabbing hand : Government pathologies and their cures. Cambridge, Mass.: Harvard University Press.