Conservation payments and perceptions of equity: Experimental evidence from Indonesia, Peru, and Tanzania

Abstract

While monetary incentives may be a promising tool for encouraging tropical forest conservation in order to reduce greenhouse gas emissions, the equity implications of such incentives are drawing scrutiny. Furthermore, little is known about how program design shapes perceptions of fairness and equity among program participants, and it remains unclear whether devolving the decision power over the distribution of payments to local leaders helps or harms local perceptions of equity. We implemented a ‘lab-in-the-field’ experiment with 448 participants in rural villages in Indonesia, Peru, and Tanzania, framed around two versions of a collective payments for ecosystem services (PES) program. Participants perceived the program as less equitable when the collective payment was distributed according to the discretion of a locally chosen leader, compared to when the payment was distributed perfectly equally by design. The negative effect is only seen among participants who were given a low share of the payment, which suggests that it is not the involvement of a leader per se that leads to lower perceptions of equity, but the inegalitarian distribution of the payment that sometimes occurs when a leader has the discretion to choose how the payment is distributed. The results highlight the importance of designing conservation incentive programs that give opportunities for local involvement while still encouraging equitable local decisions.