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B2 - Economics


Resilience of SES from a Resource-Economics Perspective

Research Areas: Resource and Institutional Economics
Principal Investigators:     
Prof. Dr. Karin Holm-Müller
Prof. Dr. Thomas Heckelei

Massive transformation of user groups and land use change characterise today's socialecological dynamics in the savannahs of Eastern and Southern Africa. Changing populations and market environments as well as institutional dynamics – for instance altered rights of access to resources – are driving these changes. Resource economics will concentrate on strengthening the link between natural and social sciences by modelling the interaction between ecosystems, the resources that these ecosystems incorporate, and the human communities using and managing these resources in the described SES. The main analytical tools will be bio-economic numerical simulation and the empirical analysis of the formal and informal institutional designs that are relevant for the regulation of resource use. The sub-project will work in Naivasha/Kenya and Thaba Nchu/South Africa.
As in almost all ecosystems that serve as a productive resource base for human societies, decisions on resource use in African savannahs are driven to a large extent by economic considerations and pressures. The resulting 'resource-economic behaviour' is determined by knowledge about ecological processes, preferences of individuals and groups, and by the institutional framework governing action and interaction of individuals and groups. Microeconomic theory presupposes that preferences drive economic behaviour in a sense that actors maximise their individual utility. On the other hand, according to the New Institutional Economics (NIE), institutions defined as formal and informal rules of human behaviour and interaction shape the set of choices available to individuals (North 1990). A central hypothesis to be investigated in this context is that the resilience or robustness of an SES crucially depends on the nature, flexibility, and cross-scale dynamics of the institutions that govern the economic behaviour of members of the relevant actors in a dynamic environment. The transformation of an SES – as a consequence of the degradation of its resource base through internal (e.g. population pressure) or external driving forces (climate change, economic growth) – involves an adaptation of both institutions and the behaviour of individuals within the SES to cope with the effects of driving forces.
The sub-project will carry out investigations in two research sites, the Lake Naivasha region in Kenya (see also sub-projects A2, B1), and in grasslands in South Africa (Thaba Nchu, Mangaung Municipality, see also sub-projects A1, A3, and C1). B2 will directly cooperate with A1 on the emergence of institutions in the context of land reform in South Africa's arid savannas in the Northwestern Province (Kuruman case study). Historical research in C1 and B1 (counterpart project) will directly add to the knowledge base of B2 on institutional stability and change. C2 will inform B2 on the medialisation of conservationist institutions in the Naivasha context. Two analytical tools will be used:

1. Institutional analysis is the basis for an understanding of the economic significance of various rules for resource use. The most important institutions relevant from the perspective of resource economics are the formal and informal systems of access-and-use rights for land and water resources. Such institutions emanate from various scales in which local systems are embedded, be it international agreements (e.g. the RAMSAR status), national legislation (e.g. land reform programme in South Africa) or local institutions (e.g. customary law for communal pastures in South Africa or rules and regulations of the Lake Naivasha Riparian Association). In most cases institutional structures intersect, and habitually actors may refer to diverse institutions when attempting to tackle challenges in resource use. Moreover, institutions providing or inhibiting effective risk management will be investigated, both informal ones such as traditions relevant for food or production and new, market-oriented institutions such as credit markets or insurance. A special focus will be given to the functioning of existing user or community organisations in two project regions, their mutual relations, and their cross-scale interactions with national and international organisations. In the Kenyan site, for instance, research on the influence of institutions on the acceptance of use restrictions will start from the management plan for the Naivasha catchment and will then focus on the factors influencing the acceptance of rules by different user groups. These preferences not only drive ecologically relevant economic behaviour, but also provide the basis for assessing the robustness of the SES and eventually (in later phases of the RU) for modelling feedbacks from natural resource management to institutional change. In the case of the South African sites, institutional change as a consequence of post-apartheid land reforms will be investigated in particular.

2. Bio-economic modelling in a dynamic framework will enable the simulation of various driving forces on the social, economic, and ecological buffer capacity of the SES. The modelling approach addresses both land and water use, incorporating a spatially explicit multi-agent framework when appropriate. This will enable a broad variety of participating disciplines to test and simulate propositions on the robustness of the SES in an integrated numerical framework. One bio-economic simulation model will be established for Naivasha/ Kenya with a focus on wetland use, the other model will represent the interaction of large farms and smallholders in the area surrounding Thaba Nchu/South Africa. Most importantly, bio-economic modelling will incorporate the results from institutional analysis. Institutions and the actors steering and changing them will be quantitatively formalised and represented in dynamic simulation models, involving transaction costs and specific objective functions. The ultimate goal is to simulate the institutional choices of resource users and the dynamic consequences of these choices on resource use and thus the resilience of the SES in question.