Simple Incentives and Group Dependence for Successful Payments for Ecosystem Services Programs: Evidence from an Experimental Game in Rural Lao PDR

Abstract

In this article, we use a new game-based tool to evaluate the immediate and longer term behavioral change potential of three different payments for ecosystem services (PES) delivery mechanisms: direct payments for individual performance, direct payments for group performance, and insurance. Results from four rural shifting-cultivation dependent communities in Lao PDR suggest that easily understood group-oriented incentives yield the greatest immediate resource-use reduction and experience less free-riding. Group-based incentives may succeed because they motivate participants to communicate about strategies and coordinate their actions and are perceived as fair. No incentive had a lasting effect after it ceased, but neither did any crowd out the participants’ baseline behavior. Temporary reductions in resource dependence may provide a buffer for development of new livelihoods and longer term change. Games like the one developed here can help policy makers appropriately target environmental incentive programs to local contexts and teach program participants how incentive schemes work.