Pro-environmental behavior under bundled environmental and poverty reduction goals: Empirical evidence from Ethiopia

Developing countries often design programs that bundle poverty reduction and environment goals. One such program is the Ethiopian food-for-work program in which participants get food or cash in return for participating in environmental protection, typically, forest and soil conservation works. While the economic impacts have been well investigated, little is known about the program’s environmental impact and the willingness to participate in such programs. We elicit Ethiopian farmers’ willingness to participate in a hypothetical afforestation program that mimics the components of the Ethiopian food-for-work program. We find that introducing food incentives decreases willingness to participate in the program. The participation rate, however, increases with an increase in the proportion of individuals selected for the food incentive. Our data points to signaling as the likely channel for the non-linearity of the participation rate in response to an increase in the share of food incentive recipients. These results suggest that (1) food-for-work programs could have unintended negative environmental effects and (2) directions for design reform that could mitigate such negative effects.