LAUSR

Participatory conservation projects imply direct involvement of local communities in natural conservation efforts, aiming at combining economic development with protecting the environment. NGOs engaged in both development and conservation massively implement such projects. Numerous field studies document mixed results of such interventions and the persistence of conservation-development tradeoff: better conservation comes at the expense of lowering the livelihoods of community members because they have to abstain from using the conservation area for hunting or agriculture. Economists argue that transferring property rights to relevant stakeholders would provide the right incentives for escaping this tradeoff. We build a simple model explaining why this policy might be insufficient. If the revenue from the conservation project is low and/or volatile, the community members may rationally reject conservation unless the NGO allocates a part of resources to sustaining community livelihoods (e.g. by agricultural extension). Hence, the NGO should deviate from its narrow mission to reach its broader objective. If the NGO is funded by strictly environmentally-oriented donors it may struggle to justify diverting a part of resources to agricultural extension, as such donors obtain little “warm-glow” utility from giving to the NGO that substantially engages in non-core mission activities. Thus, the NGO faces a “size versus efficiency” dilemma: poorly conserving a larger area (with non-cooperating local communities but happier donors) or conserving well a smaller area (with cooperation by local communities but keeping donors unsatisfied).