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Understanding markets fosters environmental stewardship

Published on
November 5, 2021

Markets drive users of shared natural resources, like grazing lands and fresh water reserves, to overexploitation, that is what is commonly believed. In a recent article published in Ecological Economics, Gugissa and colleagues show that there is more to this story. They use a well-established common resource lab-in-the-field experiment to test the decisions of Ethiopian pastoralists in common resource dilemmas, while taking into account pastoralists’ market knowledge. The results show that pastoralists that have more market knowledge make more environment-friendly decisions than their peer with less market knowledge do.

“The logical explanation is that pastoralists that better understand their market have more faith in their long-term market position which they can only secure if there is healthy resource-base on which they can build their business”, says Paul Ingenbleek, co-author of the paper. “The results imply that markets are not only a threat to sustainable resource use. They can also be part of the solution if we empower resource users with a sufficient understanding of how markets function to align their business goals with sustainable decision-making.”

The full article can be found here: https://www.sciencedirect.com/science/article/pii/S0921800921000975