transactions (e.g., through credit)
Southgate et al. (1991) examined the effect of security of land tenure in Ecuador, measured by the prevalence of adjudicated land claims. They found that security of tenure is associated with lower rates of deforestation. This re-fl ects results from other countries where there is ample case study evidence that rapid deforestation is associated with poorly enforced property rights.
Private land tenure, however, does not always result in positive resource management outcomes. Certain traditional West African land tenure systems are based on tenure in standing crops. Planting trees provided people with tenure in land for extended periods, which also secured their right to farm annual crops on the understory. This resulted in a sustainable agroforestry system. Furthermore, the trees often provided cash crops for the farmers. Land tenure reforms, providing permanent title, were introduced, driven by the desire to increase production of these cash crops and the assumption that fewer than the economically optimal number of trees were being planted because people did not have long-term tenure of the land. The unpredictable outcome was that the principal incentive for planting and maintaining trees disappeared, resulting in their removal to make way for more production of annual crops, leading, in turn, to baked soil, loss of windbreaks, soil erosion, land degradation, and the collapse of sustainable agroforestry (Rayner and Richards 1994).
Of course, property rights should not be equated simply with private property. Community networks and common property are significant resource management arrangements in various contexts and locations. Ostrom et al. (1999) point out the enormous damage that was done to the reputation of common property management regimes by Hardin's mischaracterization of open access resources (ones where property rights are undefined) as commons.
That common property regimes can be an effective means to manage natural resources is dramatically illustrated by Sneath's (1998) comparison of satellite images showing grassland degradation in northern China, Mongolia, and Southern Siberia. Mongolia, which permitted pastoralists to maintain their traditional common property management of seasonal pastures, showed only about 10% of the area to be significantly degraded, compared to 75% of the Russian territory, which had been subjected to the imposition of permanently settled, state-owned agricultural collectives. China, which had more recently privatized pasture land by allocating it to individual herding households, suffered about 33% degraded area. "Here, socialism and privatization are both associated with more degradation than resulted from a traditional group-property regime" (Ostrom et al. 1999:278). Ostrom and her colleagues have embarked on an extensive multiyear comparative program to identify the conditions under which a wide range of community-based common property systems sus-tainably manage both terrestrial and aquatic resources.
Non-state providers of market functions may also be important. One function not explicitly emphasized by Cantor et al. (although it probably fits under conveying supply/demand information) is that of assaying quality. The past few years has seen the rise of international non-state actors who have taken on the role of certifying the origin of various resources to assure purchasers that they have been produced according to a wide range of sustainability criteria. These include the Marine Stewardship Council, which certifies that fish are harvested from viable stocks using techniques (such as mesh sizes for nets) that minimize damage to juvenile members of the species and other non-target species, and the Forest Stewardship Council (FSC), which certifies that timber traded internationally is harvested from sustainable sources. Some of these non-state actors receive state backing for their activities. For instance, in Britain, the Soil Association certifies foodstuffs that are produced in accordance with organic standards, and only produce so certified by the association may be sold under the "organic" label. In the late 1990s, concerns arose about rebel groups in Angola, Sierra Leone, and the Democratic Republic of Congo which forced local populations into illegal diamond mining activities to support their insurgencies. In 2000, this concern led to the initiation of the Kimberley Process (Kantz 2007) to certify the origin of rough (uncut) diamonds to ensure that they were not produced under conditions of conflict and/or forced labor (so-called conflict or blood diamonds).
The rigorousness of certification schemes, however, may be quite variable and difficult to monitor. For example, the FSC allowed a certain proportion of uncertifi ed timber to be included in FSC certifi ed particle board, leading suppliers of board timber to demand a similar level of contamination of their product that could still qualify for certification. Once a mixture of sources is permitted, it becomes much harder to determine that contamination of certified timber is kept below the permitted threshold. Furthermore, timber certification is often done at the mill or the point of export. It is not always clear that certification stamps are only applied to properly sourced products, especially when supply chains pass through third countries.
The Fair Trade label is another way of certifying the provenance of a product and the integrity of its supply chain. In principle, this gives the consumer confidence that appropriate rewards are distributed among those contributing to each stage in production and marketing of a commodity. However, as New (2004) points out, in practice, Fair Trade labeling tends to privilege romantic consumer notions of small-scale producers that might not refl ect the actual conditions of production. In tea production, for example, large unionized firms may engage in fairer labor practices and more environmentally sustainable land management than many small producers are able to achieve.
The literature on supply chains is too vast to summarize here, but the concept represents another set of institutional arrangements highly relevant to assessing the sustainability of the stocks and fl ows of material resources. While most academic discussion of markets is based on the model of individual consumers, most economic exchange is actually interorganizational. Interfirm commerce is probably about five times the size of the global consumer economy and is shaped not by the individual shopper but by the corporate or government procurement officer, whose decisions and relationships are likely to be significant shapers of materials flows. Firms often establish stable supply relationships that last thirty to forty years, much longer than the time in post of the individual procurement officers; this suggests that commercial (and governmental) supply networks are truly institutional relationships that do not depend on individual human capital.
Was this article helpful?