Conservation and employment creation

Can privatizing natural resources benefit traditional users?

Jean-Marie Baland, Kjetil Bjorvatn

Research output: Contribution to journalArticle

Abstract

The establishment of a private property regime is often proposed as a solution to the degradation of natural resources. While arguably more efficient than open access, private property often comes at a distributional cost (Weitzman, M. (1974), 'Free access vs private ownership as alternative systems for managing common property', Journal of Economic Theory 8(2): 225-234) as traditional users of the resource lose income and employment in the process. The present paper demonstrates that, in the case of renewable resources, traditional users may gain from privatization even if they are denied ownership of the resource. Indeed, a private owner maximizing profits tends to preserve the resource, which results in long-term increases in employment. We derive the conditions under which these long-term gains more than compensate traditional users for the short-run fall in labor demand and resource rents.

Original languageEnglish
Pages (from-to)309-325
Number of pages17
JournalEnvironment and Development Economics
Volume18
Issue number3
DOIs
Publication statusPublished - 1 Jun 2013

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privatization
natural resources
natural resource
conservation
private ownership
economic theory
renewable resources
private property
ownership
resource
resources
profits and margins
preserves
labor
income
labor demand
common property
common property resource
degradation
renewable resource

Cite this

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Conservation and employment creation : Can privatizing natural resources benefit traditional users? / Baland, Jean-Marie; Bjorvatn, Kjetil.

In: Environment and Development Economics, Vol. 18, No. 3, 01.06.2013, p. 309-325.

Research output: Contribution to journalArticle

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