The Impact of Payments for Environmental Services on Communal Lands: An Analysis of the Factors Driving Household Land-Use Behavior in Ecuador

This article examines how Payments for Environmental Services (PES) influence household land-use behavior in the context of common-property lands. PES programs have been increasingly applied to communities who collectively manage their lands. While a number of authors have expressed concerns about the ability of said programs to generate additional environmental benefits and the potential for PES to counter community resource management arrangements, few empirical studies have explicitly examined PES in the context of communal resource management. Here, we take advantage of the gradual rollout of an Ecuadorian PES program to compare land-use behavior on collective lands in participant communities to households in communities that are waiting to participate. The goals of the analysis are to (a) identify if the PES program has produced changes in land-use, (b) assess the degree to which household characteristics and communal governance conditions drive land-use behavior, and (c) explore the interplay between PES and communal resource management institutions. Data were gathered from a cross-sectional survey of 399 households located in 11 communities. We use difference-in-differences to estimate the average effect of PES program participation on household behavior. Logit models, coupled with qualitative analysis, unpack how communal governance characteristics influence land-use behavior and the interplay between communal governance conditions and PES. We find that PES reduced the number of households grazing livestock on collective lands by 12%, however, household and communal governance factors are also instrumental in determining land-use decisions. Our results provide empirical insights into the debate over PES in collective resource management and illustrate how PES and communal resource management institutions can build upon each other to attain desired household conservation behavior.