What incentivizes local forest conservation efforts? Evidence from Bolivia

Efforts to promote forest conservation have focused on two separate types of policy reforms. Decentralization reforms have attempted to make local forest governance more accountable to demands from voters. Meanwhile, Payment for Ecosystem Services (PES) schemes like the REDD program (Reducing Emissions from Deforestation and Forest Degradation) have sought to use economic incentives to promote conservation. These programs make different assumptions about the incentives most likely to work in forest conservation. Decentralization reforms assume that citizen pressures on politicians will encourage conservation, while PES approaches assume that an economic incentive – money – is the best approach. Which type of incentive works best in settings with weak institutions? Here, using a unique longitudinal dataset of forest policy in 100 Bolivian municipalities, we examine the relationships between citizen pressures and economic incentives on forest policy. We find that both types of incentives are positively and significantly associated with government investments in forest conservation, and that the magnitudes of these relationshipsare similar. Further, we find that economic incentives may be especially effective at promoting conservation where citizen pressures are weak or absent.