Property Rights and Natural Resource: Socio-economic Heterogeneity and Distributional Implications of Common Property Resource Management in Nepal

The relationship between socio-economic heterogeneity and distributional implications of community-based resource management is becoming a growing concern in issues of local level collective action. This study tries to examine the contested role of heterogeneity and equity of resource distribution in community-based property rights regimes in reference to community-based forest management in Nepal. The analysis is based on field data from 309 households from the mid-hills of the country to investigate stockholder’s incentives in common property forest management. The analysis of household level benefits from community forestry suggests that poorer stakeholders are currently benefiting less from community forestry than relatively better off households. This paper also develops a regression model of determinants of household level income from community forests. Econometric results show that some socio-economic variables of the resource-using group place stringent limits on the extent to which certain groups are able to again access to and benefit from collective action. I reconsider the issue of persistent socioeconomic inequality in communities and argue that restricting the access of poor people through changes in property rights structure in common-pool resources is likely to increase the level of poverty unless specific measures of compensatory transfer schemes are in place to safeguard the interests of the most vulnerable section of the community. At a glance, the impact of common property forest management seems to be ambiguous. While community forestry seems to be good for the forest resource itself and local environment, fundamental questions remain about the equity, distribution and livelihood implications of community property resource (CPR) institutions. I argue that clearly defined common property rights on common-pool resources are a necessary but not sufficient condition for equitable resource use. Property rights on natural resources need to be combined with social goals for equity, efficiency and the ecology of environmental resilience. The results show that transaction costs of community-based resource management can be a significant part of resource management costs, which is generally ignored in economic analysis of participatory forest management.