Decentralization, market integration and efficiency-equity trade-offs: Evidence from Joint Forest Management in Ethiopian villages

Published Date

Author Info

• Gelo, Dambala
• Muchapondwa, Edwin
• Koch, Steven F.

Abstract

Extant literature on Joint Forest Management (JFM) impact evaluation has concluded that it generally does not provide sufficient incentives to justify the costs that forest use restrictions impose on local people. However, there is a dearth of evidence concerning whether alternative JFM intervention with improved market linkages for non-timber forest products has similar implications. In this study, we evaluated the income and distributive effects of a JFM program in Ethiopia in which additional support was provided for improved market linkages for non-timber forest products (NTFPs). Exploiting exogenous variation in customary rights across eligible groups of communities that participate in JFM programs, as well as using heteroskedasticity-based instrumentations, we identified the income and distributive effects of the program. Our analysis shows that the program has raised the income of the households who chose to participate by approximately 400 Ethiopian Birr or 26% of per capita expenditure; that result was robust to various specifications. We also found that this effect is largely driven by marketing incentives to use non-timber forest products. However, we found that the program's benefit is biased toward the upper end of the income distribution, a result that points to the inequality-reinforcing effects of the program.


References

1. Kleibergen, F.R. & Paap, R., 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Institute Research Papers EI 2003-01, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute. 
   •  Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
   • Frank Kleibergen & Richard Paap, 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Tinbergen Institute Discussion Papers 03-003/4, Tinbergen Institute.
   • Richard Paap & Frank Kleibergen, 2004. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Society 2004 Australasian Meetings 195, Econometric Society.
2.  Guush Berhane & Cornelis Gardebroek & Henk A. J. Moll, 2009. "Risk-matching behavior in microcredit group formation: evidence from northern Ethiopia,"Agricultural Economics, International Association of Agricultural Economists, vol. 40(4), pages 409-419, 07.
3. Frölich, Markus, 2002. "Nonparametric IV Estimation of Local Average Treatment Effects with Covariates," IZA Discussion Papers 588, Institute for the Study of Labor (IZA). 
   •  Frolich, Markus, 2007. "Nonparametric IV estimation of local average treatment effects with covariates," Journal of Econometrics, Elsevier, vol. 139(1), pages 35-75, July.
   • Markus Froelich, 2002. "Nonparametric IV estimation of local average treatment effects with covariates," University of St. Gallen Department of Economics working paper series 2002 2002-19, Department of Economics, University of St. Gallen.
4. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2009. "Understanding Instrumental Variables in Models with Essential Heterogeneity," Working Papers 200941, Geary Institute, University College Dublin. 
   •  James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
   • James J. Heckman & Sergio Urzua & Edward J. Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," NBER Working Papers12574, National Bureau of Economic Research, Inc.
   • Heckman, James J. & Urzua, Sergio & Vytlacil, Edward, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," IZA Discussion Papers2320, Institute for the Study of Labor (IZA).
5. Shenkute, Awraris Getachew & Getachew, Yemisrach & Assefa, Dejen & Adgaba, Nuru & Ganga, Gebeyehu & Abebe, Workneh, 2012. "Honey production systems (Apis mellifera L.) in Kaffa, Sheka and Bench-Maji zones of Ethiopia," MPRA Paper 56580, University Library of Munich, Germany, revised Sep 2012.
6. Kibrom A. Abay & Goytom Abraha Kahsay & Guush Berhane, 2014. "Social Networks and Factor Markets: Panel Data Evidence from Ethiopia," IFRO Working Paper 2014/12, University of Copenhagen, Department of Food and Resource Economics. 
   • Abay, Kibrom A. & Kahsay, Goytom A. & Berhane, Guush, 2014. "Social networks and factor markets: Panel data evidence from Ethiopia:," ESSP working papers 68, International Food Policy Research Institute (IFPRI).
   • Abay, Kibrom & Kahsay, Goytom & Berhane, Guush, 2015. "Social Networks and Factor Markets: Panel Data Evidence from Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 210869, International Association of Agricultural Economists.
7. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Working Papers 11259, National Bureau of Economic Research, Inc. 
   •  James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, 05.
   • James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Technical Working Papers 0306, National Bureau of Economic Research, Inc.
8. Caeyers, Bet & Dercon, Stefan, 2012. "Political Connections and Social Networks in Targeted Transfer Programs: Evidence from Rural Ethiopia," CEPR Discussion Papers 8860, C.E.P.R. Discussion Papers. 
   •  Bet Caeyers & Stefan Dercon, 2012. "Political Connections and Social Networks in Targeted Transfer Programs: Evidence from Rural Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 639 - 675.
   • Bet Caeyers & Stefan Dercon, 2008. "Political Connections and Social Networks in Targeted Transfer Programmes: Evidence from Rural Ethiopia," CSAE Working Paper Series 2008-33, Centre for the Study of African Economies, University of Oxford.
   • Stefan Dercon & Bet Caeyers, 2008. "Political Connections and Social Networks in Targeted Transfer Programmes: Evidence from Rural Ethiopia," Economics Series Working Papers WPS/2008-33, University of Oxford, Department of Economics.
9.  Adhikari, Bhim, 2005. "Poverty, property rights and collective action: understanding the distributive aspects of common property resource management," Environment and Development Economics, Cambridge University Press, vol. 10(01), pages 7-31, February.
10.  Ichimura, Hidehiko & Todd, Petra E., 2007. "Implementing Nonparametric and Semiparametric Estimators," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 74 Elsevier. 
    • Hidehiko Ichimura & Petra E. Todd, 2006. "Implementing Nonparametric and Semiparametric Estimators," CIRJE F-Series CIRJE-F-452, CIRJE, Faculty of Economics, University of Tokyo.
11.  Bluffstone, Randall & Boscolo, Marco & Molina, Ramiro, 2008. "Does better common property forest management promote behavioral change? On-farm tree planting in the Bolivian Andes," Environment and Development Economics, Cambridge University Press, vol. 13(02), pages 137-170, April.
12.  Delacote, Philippe, 2007. "Agricultural expansion, forest products as safety nets, and deforestation," Environment and Development Economics, Cambridge University Press, vol. 12(02), pages 235-249, April.
13. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc. 
    •  Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
14.  Bluffstone, Randy & Robinson, Elizabeth & Guthiga, Paul, 2013. "REDD+and community-controlled forests in low-income countries: Any hope for a linkage?," Ecological Economics, Elsevier, vol. 87(C), pages 43-52.
15.  Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
16. Heckman, James & Navarro-Lozano, Salvador, 2003. "Using matching, instrumental variables and control functions to estimate economic choice models," Working Paper Series 2003:4, IFAU - Institute for Evaluation of Labour Market and Education Policy. 
    •  James Heckman & Salvador Navarro-Lozano, 2004. "Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 30-57, February.
    • James J. Heckman & Salvador Navarro-Lozano, 2003. "Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models," NBER Working Papers 9497, National Bureau of Economic Research, Inc.
    • Heckman, James J. & Navarro, Salvador, 2003. "Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models," IZA Discussion Papers 768, Institute for the Study of Labor (IZA).
17.  Anirban Basu & James J. Heckman & Salvador Navarro-Lozano & Sergio Urzua, 2007. "Use of instrumental variables in the presence of heterogeneity and self-selection: an application to treatments of breast cancer patients," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1133-1157.
18.  Cragg, John G. & Donald, Stephen G., 1993. "Testing Identifiability and Specification in Instrumental Variable Models," Econometric Theory, Cambridge University Press, vol. 9(02), pages 222-240, April.
19.  Wunder, Sven, 2001. "Poverty Alleviation and Tropical Forests--What Scope for Synergies?," World Development, Elsevier, vol. 29(11), pages 1817-1833, November.
20.  Ameha, Aklilu & Nielsen, Oystein Juul & Larsen, Helle Overgard, 2014. "Impacts of access and benefit sharing on livelihoods and forest: Case of participatory forest management in Ethiopia," Ecological Economics, Elsevier, vol. 97(C), pages 162-171.
21.  Edward Vytlacil & James J. Heckman, 2001. "Policy-Relevant Treatment Effects," American Economic Review, American Economic Association, vol. 91(2), pages 107-111, May.
22.  Robinson, Elizabeth J. Z. & Lokina, Razack B., 2012. "Efficiency, enforcement and revenue tradeoffs in participatory forest management: an example from Tanzania," Environment and Development Economics, Cambridge University Press, vol. 17(01), pages 1-20, February.
23. Anirban Basu & James J. Heckman & Salvador Navarro-Lozano & Sergio Urzua, 2007. "Use of instrumental variables in the presence of heterogeneity and self-selection: An application in breast cancer patients," Health, Econometrics and Data Group (HEDG) Working Papers 07/07, HEDG, c/o Department of Economics, University of York.
24.  Vega, Dora Carias & Keenan, Rodney J., 2014. "Transaction cost theory of the firm and community forestry enterprises," Forest Policy and Economics, Elsevier, vol. 42(C), pages 1-7.
25.  Agrawal, Arun & Gibson, Clark C., 1999. "Enchantment and Disenchantment: The Role of Community in Natural Resource Conservation," World Development, Elsevier, vol. 27(4), pages 629-649, April.
26.  Varughese, George & Ostrom, Elinor, 2001. "The Contested Role of Heterogeneity in Collective Action: Some Evidence from Community Forestry in Nepal," World Development, Elsevier, vol. 29(5), pages 747-765, May.
27.  Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
28.  AfDB AfDB, . "AfDB Group Annual Report 2006," Annual Report, African Development Bank, number 62 edited by Koua Louis Kouakou, 8.
29.  Gelo, Dambala & Koch, Steven F., 2014. "The Impact of Common Property Right Forestry: Evidence from Ethiopian Villages," World Development, Elsevier, vol. 64(C), pages 395-406.
30.  Edmonds, Eric V., 2002. "Government-initiated community resource management and local resource extraction from Nepal's forests," Journal of Development Economics, Elsevier, vol. 68(1), pages 89-115, June.
31.  Charles Blessings Laurence Jumbe & Arild Angelsen, 2006. "Do the Poor Benefit from Devolution Policies? Evidence from Malawi’s Forest Co-Management Program," Land Economics, University of Wisconsin Press, vol. 82(4), pages 562-581.
32. repec:taf:jnlbes:v:30:y:2012:i:1:p:67-80 is not listed on IDEAS
33.  Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
34.  Kumar, Sanjay, 2002. "Does "Participation" in Common Pool Resource Management Help the Poor? A Social Cost-Benefit Analysis of Joint Forest Management in Jharkhand, India," World Development, Elsevier, vol. 30(5), pages 763-782, May.
35.  Baland, Jean-Marie & Platteau, Jean-Philippe, 1999. "The Ambiguous Impact of Inequality on Local Resource Management," World Development, Elsevier, vol. 27(5), pages 773-788, May.
36.  Alberto Abadie & Guido W. Imbens, 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 1-11, January. 
    •  Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
37.  Cattaneo, Matias D., 2010. "Efficient semiparametric estimation of multi-valued treatment effects under ignorability," Journal of Econometrics, Elsevier, vol. 155(2), pages 138-154, April.
38.  Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.

For further details log on website :
https://ideas.repec.org/a/eee/foreco/v22y2016icp1-23.html