Failing Forward: How to Enhance Payment for Ecosystem Services in the Developing World

Lot Elshuis & Charlotte Corinne Davidsen

Student thesis: Master thesis


As a response to the current rising levels of various environmental challenges, this thesis explores the concept of payment for ecosystem services (PES), a market-based approach that aims to account for the negative externalities of common pool resource (CPR) extraction. Despite PES’ globally attractive and promising prospect of improving environmental systems while simultaneously enhancing social development, the application of the concept fails to live up to its potential. As such, this paper investigates how to structure PES in the developing world in order to enhance social and environmental sustainability. To address this question, the present study employs an interdisciplinary methodology that integrates Elinor Ostrom’s design principles of CPR management theory with Pierre Bourdieu’s research on the field. The confluence of these two theorists’ insights provides a novel perspective of not only the social and environmental challenges within PES schemes, but also the dynamic structures within an institution. Guided by the careful coding of 38 peer-reviewed studies on PES schemes, our research and analysis suggest a misalignment between Ostrom’s theory and the implementation of PES projects, revealing barriers, a) inadequacy of community engagement, b) weak emphasis on sanctions, c) lack of autonomy and voluntariness, that obstruct the proper management of CPRs. As such, PES blankly applies formal, restrictive rules, and follows its path dependent nature of ‘do less harm,’ without considering the dynamic complexities of local communities. In this way, PES emphasizes mere compliance in an attempt to execute fast and rigid conservation solutions, which causes negative second-order outcomes, and inhibits new outlets of positive conservation. To overcome these obstacles, this thesis takes inspiration from Bourdieu’s research on the underlying social structures to emphasize the factors that constrain or empower local agents within the field of PES, i.e. holding a) the right connections, b) established trust, and c) the ability to respond to the program’s characteristics. By recognizing the dynamics of potential participants in localized communities, this thesis provides an alternative approach (PES 2.0) to the application of PES, in an attempt to promote social and environmental sustainability through the lens of Ostrom’s design principles and Bourdieu’s field theory. In this way, PES 2.0 acts as a choice architect, and transitions PES into a dynamic institution through a sequential process of 1) reducing uncertainty, 2) prompting trust, 3) promoting collective action, 4) changing social norms, and ultimately, 5) altering the habitus of participating agents. PES 2.0 attempts to strengthen a community’s attitude towards positive conservation, rather than merely imposing strict rules to obey. However, PES 2.0 must recognize the multifaceted components of each project and community when enacting the scheme, and acknowledge and embrace these local differences. PES 2.0 promotes procedural sustainability, encouraging communities to learn from localized trial and error, and as such, encourages ‘failing forward.’

EducationsMsc in Business Administration and Philosophy, (Graduate Programme) Final Thesis
Publication date2018
Number of pages117
SupervisorsKristjan Jespersen