Payments for Ecosystem Services as Incentives for Collective Action

Abstract

The design and thriving of payments for ecosystem services (PES) have occurred as a response to the relative failure of integrated strategies for reconciling conservation and development. The most widespread definition of PES conceives these payments as markets to solve environmental externalities. This article analyzes the limitations of this “Coasean” approach using insights from transaction costs economics, and it pleads for looking at PES with different analytical lenses. It argues that PES should be seen as “incentives for collective action.” However, the extent to which incentives can contribute to the management of ES should not be taken for granted. The effects of monetary incentives are determined by their “social meanings,” which are context and culture dependent. The proposed conceptual shift has significant analytical and practical implications.

Keywords:

• behavioral economics
• collective action
• environmental governance
• payments for ecosystem services
• transaction costs economics

Acknowledgments

This research has been supported by the FP7 Biodiversa ERA-NET scheme, and by the Netherlands Organization for Scientific Research (NWO).