Thanks but no thanks: A new policy to reduce land conflict

• We propose a new policy to overcome land conflicts in developing countries.
• A salient feature is the option to by-pass regulation through consensus.
• The key idea combines social preferences with forward induction logic.
• We test for empirical relevance in an experiment among Ethiopian farmers.

Land conflicts in developing countries are costly both directly and through increased land degradation. An important policy goal is to create respect for borders. This often involves mandatory, expensive interventions. We propose a new policy design, which in theory promotes neighborly relations at low cost. A salient feature is the option to by-pass regulation through consensus. The key idea combines the insight that social preferences transform social dilemmas into coordination problems with the logic of forward induction. As a first, low-cost pass at empirical evaluation, we conduct an experiment among farmers in the Ethiopian highlands, a region exhibiting features typical of countries where borders are often disputed.