Conservation performance payments for carnivore conservation in Sweden.

Many carnivores require vast territories, and as human population increases, more pristine natural areas are being developed and converted into agricultural land. Unsurprisingly, carnivores that live at the fringe between wild and agricultural land occasionally prey on livestock. Predation of livestock can result in severe economic losses (Mishra 1997; Thirgood et al. 2005; Woodroffe et al. 2005). Herders, whose livelihoods depend on livestock, often seek to kill predators to prevent further damage. Conservationists, on the other hand, engage in measures to protect endangered carnivores because they are appreciated as an important component of biodiversity. Viable solutions to make coexistence of wildlife and livestock acceptable to conservationists and livestock owners are much needed and are likely to be increasingly sought after as human sprawl increases. Schemes that provide ex post compensation to livestock owners for losses to predation have been implemented in many places around the world, but they have not proven to be widely successful. Most of the schemes’ deficiencies can be ascribed to one or several of the following problems: moral hazard (Cozza et al. 1996; Swenson & Andrén 2005), high transaction costs (Saberwal et al. 1994; Blanco 2003), long time lags (Fourli 1999; Madhusudan 2003), and problems of trust and transparency (Montag 2002; Western & Waithaka 2005). Mainly due to these problems, practitioners and analysts have denounced ex post compensation schemes as inadequate, fraudulent, and cumbersome (Naughton-Treves et al. 2003). Drawing on empirical insights into a conservation performance-payment scheme in Sweden, we