Anke Fischer, Lorenz Petersen:
How Incentives Matter -- A Conceptual Framework for Natural Resource Governance in German Development Co-operation


German Agency for Technical Cooperation (GTZ), Environment and Infrastructure, Germany

Many problems of unsustainable management of natural resources all over the world are due to a limited number of basic governance shortcomings such as open access, lack of property rights definitions or insufficient enforcement of existing rules. Often however, researchers and to an even greater extent practitioners in development cooperation focus on one single natural resource and ignore the analogy of problems in related fields. As a consequence, many insights gained in one field, e.g. with regard to irrigation, are not transferred to similar issues and thus remain idle. Chances to learn from other sectors are passed up.

In this paper, a conceptual framework for analysing the governance problems behind unsustainable management of natural resources is proposed. The framework takes an institutional economic perspective, and is applicable to all kinds of natural resources, regardless of their physical quality. The core of the framework draws on the Institutional Analysis and Design (IAD). Consequently, it focuses on an identification of incentives that motivate the way environmental goods and services are used. In addition, it provides an elaborated instrument to analyse and categorise related governance measures. Overarching objectives of development cooperation such as poverty alleviation are also included. The framework serves as a common theoretical background on which to analyse management problems, their causes, and possible interventions. Thus, a basis is provided to compare actual case studies and to draw conclusions on explicit and implicit goals of development policy and its shortcomings.

The empirical part of the paper illustrates the application of the framework and presents a survey of case studies on resource management in developing countries. The results of this survey include (i) a quantification of governance measures applied, (ii) data on proportions of effective and ineffective attempts to modify institutional arrangements, and (iii) an analysis of interdependencies between the economic characteristics of the good, institutions, and successful development cooperation. For the first time, it gives an overview of the actual approaches applied in German development cooperation with regard to natural resource management.

Keywords: Development co-operation, governance, incentives, institutions, natural resource management, sustainability

Full paper:


Contact Address: Anke Fischer, German Agency for Technical Cooperation (GTZ), Environment and InfrastructureDag-Hammarskj÷ld-Weg 1-5, 65726 Eschborn, Germany, e-mail:
Andreas Deininger, September 2004