Global Hub

Leads implementation of EfD’s strategy and promotes the development of the network.

EfD Director Gunnar Kohlin

Contracts versus trust for transfers of ecosystem services: Equity and efficiency in resource allocation and environmental provision.

Submitted by Manuela Fonseca on 29 February 2020

Managing natural-resource allocation and environmental externalities is a challenge. Institutional designs are central when improving water quality for downstream users, for instance, and when reallocating water quantities including for climate adaptation. Views differ on which institutions are best: states; markets; or informal institutions. For transfers of ecosystem services, we compare informal trust-based institutions to enforced contracts, both being institutional types we observe commonly in the field.

Policy Design