An institutional analysis of Payment for Environmental Services on collectively managed lands in Ecuador

• We examine a Payment for Environmental Services (PES) program on communal lands.
• We find that PES participation is associated with collectively crafted conservation rules.
• Rule creation was not directly associated with level of PES payment.
• Wealthier communities were more likely to receive payment for existent conservation.
• Poorer and organized communities were more likely to craft rules after participation.

The application of Payment for Environmental Services (PES) programs on communal lands raises questions about how PES interacts with collective resource management institutions. We explore how an Ecuadorian payment program is associated with the development of rules to manage shared grazing lands. In addition, we assess the communal characteristics that make it more likely that a participant community will change their land-use rules. Our analysis draws from an almost complete census of participant communities in the Ecuadorian highlands (n = 44), a survey of non-participant communities (n = 23) and a household questionnaire (n = 420). We find that the majority of participant communities have strengthened their land-use rules since program participation. Communities that craft new rules and apply their rules are more likely to be organized and have internal monitoring and enforcement mechanisms. Poorer communities are also more likely to have made a rule change in response to participation; wealthier communities are more likely to maintain existent land-use institutions. We find no association between rule change and level of payment. Our results highlight the need to disaggregate the role of payments and contract commitment and to further analyze how community characteristics may influence the effectiveness and equity of PES in communal contexts.