SPECIAL ISSUE
THE VALUES OF WETLANDS: LANDSCAPE AND INSTITUTIONAL
PERSPECTIVES
Wetland restoration, collective action and the role of water
management institutions
Ian Hodge
a,*, Sandra McNally
baDepartment of Land Economy,Uni6ersity of Cambridge,19Sil6er Street,Cambridge,CB3 9EP, UK bInstitute of Terrestrial Ecology,Monks Wood,Abbots Ripton,Huntingdon,Cambridgeshire,PE17 2LS,UK
Abstract
Over the past 50 years, large areas of agricultural land have been drained and put into intensive agricultural production. Increasing attention is now being paid to the issue of restoring wetland areas and promoting environmen-tal benefits. Collective action is important for wetland restoration, both because of the physical interactions among landholders and because of the cost saving and enhanced environmental benefit that can be achieved at a larger scale. Policy needs to be geared towards facilitating co-operation among farmers if environmental schemes are to be effective in enabling wetland restoration. Internal Drainage Boards have been primarily involved with securing of land drainage for local landholders. They now have a formal responsibility to further nature conservation but could take a more proactive role in promoting wetland restoration. They have good information on local water management options and are well placed to co-ordinate actions for restoration. Agri-environment policy could be redirected in order to promote collective action for wetland restoration. © 2000 Elsevier Science B.V. All rights reserved.
Keywords:Collective action; Institutions; Internal drainage boards; Wetland restoration; Water management
www.elsevier.com/locate/ecolecon
1. Introduction
In lowland England, active periods of land drainage in the 19th century, and again between 1940 and 1980, resulted in a massive loss of wetland habitat (Williams and Bowers, 1987). More recently, there have been very few new land drainage schemes as a result of changing
govern-ment policy (grants are generally no longer paid for new field drainage), the declining fortunes of agriculture, a growing awareness of the resulting environmental damage and the fact that much of Britain’s wetland habitat has already been drained (Dunn et al., 1994). The main threat to UK wetlands in recent years has been more intensive agricultural management on existing grasslands.
In recognition of the threats posed to important natural habitat, there have been several
agree-* Corresponding author.
ments and legislation, nationally and internation-ally, to protect what remains and restore where possible. At an international level, the govern-ment signed the Ramsar Convention, which aims to promote the conservation of wetlands. The EC Birds Directive and the EC Habitats Directive require the designation of special protection areas and special areas of conservation, respectively. At a national level, under the 1981 Wildlife and Countryside Act, wetlands may be notified as sites of Special Scientific Interest (SSSIs).
The need to curb over-production, while also recognising the important role of farmers as man-agers of the countryside, has provided the ratio-nale for the various agri-environment schemes that have grown in importance since the initial designation of Environmentally Sensitive Areas (ESA) in the UK in 1987. Several of the 22 areas now designated in England and Wales contain wetland habitats, where the aim is to maintain or enhance the wetland resource by paying farmers to pursue appropriate agricultural practices.
There has been much debate over the appropri-ate mechanism to ensure that farmers deliver the public benefit of nature conservation or enhance-ment at least economic cost (Colman et al., 1992; Whitby and Saunders, 1996; Smith and Colman, 1997). However, there has been little discussion of the importance of collective action among farmers in delivering this public good and the role water management institutions in facilitating this pro-cess. There has been some attention in the media given to the lack of co-operation among farmers. This is perceived as a significant impediment to the effective conservation of wet grassland in the Somerset Levels; compulsion has been proposed as an alternative approach (The Times 24/2/98).
In this paper, we review the reasons why collec-tive action among farmers may be important for the purpose of wetland restoration (Section 2). We discuss how the findings in the social science literature can be related to collective action in this context (Section 3). We then ask whether there are suitable water management institutions in the UK that could facilitate this process, drawing on the findings of a survey of Internal Drainage Board representatives (Sections 4 and 5). We conclude with some potential directions for institutional
reform and policy development more generally. While the emphasis here is on the experience in England and Wales, water management in other countries involves similar institutional issues. In particular, the study by White and Runge (1995) on watershed management in Haiti has some rele-vant findings in this regard (Section 3). Institu-tions for the collective management of irrigation are more often discussed in the literature (e.g. Loehman and Dinar, 1994; Ostrom, 1990). How-ever, the principles discussed here will apply in a similar way to diverse locations and water man-agement issues.
2. The rationale for collective action
The term ‘restoration’ can accommodate vari-ous degrees of reinstatement and may encompass a broad spectrum of activities from minor repara-tion of damage through contrived reassembly of species to de novo regeneration (Wheeler, 1995). There is a growing literature on how to determine what to restore as well as the best techniques to use (Treweek et al., 1993; Parker, 1995). Depend-ing on the objectives of restoration and the loca-tion, the technical complexity of restoring wetlands can vary markedly. In some areas, at-taining suitable conditions may just mean reduc-ing the extent to which water is removed from an area, with little control over water levels. In con-trast, it is possible, especially in areas with high levels of infrastructure and flat land, to generate specific water regimes for particular ecological requirements. The former approach is more likely to be associated with gravity drained areas and less productive land while the latter may be more often associated with pump drained areas of higher agricultural productivity.
management; the relationship between scale of restoration and environmental benefits.
2.1. The costs of water management
Whatever the extent of control over conditions, it will often be difficult, if not impossible, for individual land holders to control the wetness of their fields without affecting their neighbours’ fields. Furthermore, restoration may require some alteration of regional wetness. Thus in the Somer-set Levels and Moors ESA, Baldock et al. (1990) comment that ‘it is impossible for a farmer indi-vidually to control water levels of holdings with-out introducing a very complex and costly system of sluices within the Internal Drainage Board water courses…’.
There is some anecdotal evidence of economies of size involved in restoring a larger area if ma-nipulation of the arterial drainage infrastructure is required. Raising the water level of a block of land above an adjacent area leads to some natural drawdown. To protect adjacent landowners, water that seeps out in this way may have to be pumped back in. The extent to which this happens is positively related to the perimeter-area ratio. Since larger areas have a smaller perimeter in relation to area, there is some marginal cost sav-ing in restorsav-ing larger areas (Adrian Armstrong, Agricultural Development and Advisory Service Land Research Centre, Gleadthorpe, personal communication, 1997). In some locations, these costs can become substantial through time as land levels fall with the oxidation of peat on the sur-rounding intensively farmed land in relation to the level maintained on a nature reserve by envi-ronmental conservation.
In such cases, whether or not wetland restora-tion is achieved depends not only on how one individual farmer reacts to the monetary incen-tives offered through government conservation schemes, but also whether agreement can be reached with neighbouring land holders to take advantage of the opportunity to provide wetland habitats. From some investigation of what hap-pens in ESAs, it would seem that farmer coali-tions of perhaps 7 – 12 land holders in the case of the Somerset Levels and Moors, and 15 – 20 land
holders in the Upper Thames tributaries might be required before raising water tables or a major alteration in the hydrological regime becomes a practical option.
2.2. En6ironmental benefits and scale of
restoration
Even in cases where hydrological and topo-graphical conditions permit individual land hold-ers to control field wetness effectively, there are other reasons why collective action may lead to a disproportionate increase in environmental and economic benefit.
The environmental benefit of a wetland restora-tion scheme will often depend on what is happen-ing in the surroundhappen-ing area. Wheeler (1995) makes the point that wetlands are far more influ-enced by their surroundings than are drylands because the character of wetlands is often criti-cally dependent on the nature of their water sup-ply. Thus fens may have various water sources and a wide catchment, and changes in these may materially influence the quantity and quality of their water inputs. In the context of restoration of lowland wet grassland, Treweek et al. (1991) com-ment that the weakness of current efforts to pro-tect wetlands lies in the separation of the management of protected areas and adjacent land. They discuss the problems of ‘edge effects’ — any wetland that is recreated from agricultural land will be surrounded by land still under agricultural management. Impacts might take the form of disturbance (from livestock or people), run-off of the agro-chemicals which affects water quality, sedimentation, the encroachment of non-wetland plant species, and, most seriously, the effect of continued drainage.
ones. O’Brien and Buckingham (1989) comment in the context of the broads ESA that to ensure success in restoring bird populations, such as red-shank, lapwing and oystercatcher, it is important to have whole river catchments entering tier two of the ESA scheme (which involves raising water levels).1One more specific example is that a
mini-mum of 20 ha of wet reedbed is necessary for the successful breeding of bitterns (Royal Society for the Protection of Birds research, Jeff Kew, per-sonal communication, 1997). It is very likely that the appropriate area for restoration would not fall exclusively within the land owned by one farmer.
3. Relevant findings from social science literature
In the social science literature, wetland benefits would be regarded as a type of public good since they display characteristics of non-excludability and non-rivalry in consumption. This provides the rationale for government intervention in the form of various agri-environment schemes.
As argued in Section 2, the production of this good requires collective action by farmers. Due to technical constraints and the costs of water man-agement, often wetland restoration will not be possible unless all producers co-operate (within a specific location). This is analogous to the exam-ple put forward by Mueller (1980) as the crew of a sailing boat. He argues that in such cases co-op-erative behaviour will be voluntarily forthcoming; no one can gain from non-co-operation. This is in contrast to other common property situations where individual producers have an incentive for non-operation (or ‘free-riding’), given the co-operation of other producers. In the wetlands context, ‘free-riding’ is not likely to be an issue because it is not clear that the farmer (as a producer) will gain by non-co-operation, given the
co-operation of other farmers. In this context, Mueller’s argument would suggest that if private incentives are high enough (i.e. subsidies in agri-environment schemes), adjacent farmers will par-ticipate and co-ordination will be achieved.
However, there are some very practical reasons for arguing that even if private incentives are high, collective provision will not happen sponta-neously by producers acting independently. Pro-ducers must have the information on the technical requirements of wetland restoration and the im-plications for water management in the catch-ment. A level of communication and agreement is needed between farmers before individuals can participate in the scheme (i.e. if wetland restora-tion requires altering water levels in the catch-ment). This process involves acquiring information and incurring the transaction costs of coming to agreement. It is quite possible that such factors might outweigh the effect of government incentives, thus preventing wetland restoration.
In this context, the role of an external agent or water management organisations becomes very important. This is an issue considered by White and Runge (1995) in their analysis of the emer-gence and evolution of collective action in water-shed management in Haiti. In this case study, a non-governmental organisation (NGO) is at-tributed with a major role in initiating collective action among resource users. Among their find-ings is that the NGO acted as a ‘political en-trepreneur’ by facilitating dialogue over watershed interdependencies and alternative solutions. It also bore the transaction costs of encouraging co-ordination through the hiring and training of extension agents. The authors argue that the emergence of collective action is explained by a ‘critical mass’ of practical knowledge of potential benefits and not by variables indicating physical scale or social heterogeneity.
There is now a substantial body of research in experimental economics regarding the conditions under which individuals will co-operate. For ex-ample, face-to-face communication among re-source users is a critical factor in the resolution of dilemmas involving common property resources (Hackett et al., 1994). In his review of the litera-ture of experimental research in relation to public
goods, Ledyard (1995) finds that communication and high marginal payoffs are the two factors that have a very well-documented effect on contribu-tions to the voluntary provision of public goods. Thus, it might be expected that some external agent or water management organisation which facilitates communication between farmers, pro-vides information and incurs transactions costs, would help overcome the problems of collective action in a wetlands context. Furthermore, water management within a catchment can involve more complex issues beyond serving the collective needs of farmers. Importantly, there are implications of water management for flood control in the river basin. Water management also has implications for urban and industrial interests. The complexity of managing water levels for multiple interests means that decisions may be taken by some tier of local government or formal water management organisation with statutory duties. Since these organisations, and not just individual farmers (or collectives), have decision-making powers, it is also relevant to consider the incentives that they face.
4. Policy and water management institutions in the UK
Under the current structure of incentives — within the countryside stewardship scheme and
within several Environmentally Sensitive Areas — there is an opportunity for individual farmers (in addition to organisations that may own land in the area) to enter agreements where wetland restoration is the main objective. Collective action is not explicitly encouraged, although in practice, for the reasons discussed above, this will often be necessary if alteration in the water management infrastructure is required. Information on uptake in both the Upper Thames tributaries ESA and the Somerset Levels and Moors ESA shows that uptake for the raised water tiers is much less than for the lower tiers of agreement (see Table 1). This suggests either that the payment for these tiers is not high enough for the changes in agricultural practices that would be required, or that there are other obstacles such as high transactions costs that prevent farmers from coming to an agree-ment to enter the scheme.
In England and Wales, internal drainage boards (IDBs) usually decide on the feasibility of raising water levels and may also balance the drainage requirements of different types of farm-ing and other land uses (Friend and Laffin, 1983). In many cases, IDBs started out as a ‘club’ of local landholders who came together to organise land drainage. IDBs are now more formal institu-tions with statutory responsibilities. As a conse-quence, they have evolved from being landholder ‘clubs’ to acting more like a tier of local govern-ment where different interests, such of those of
Table 1
Tiers Description Payment rate per ha (£) Uptake (has)
Somerset Le6els and Moors ESA Permanent grassland
1 130 11320
1s Tier one+raised water level area supplement 130+80 26
Wet permanent grassland 2415
2 215
Tier two+raised water level area supplement
2s 215+80 231
3 Permanent grassland raised water level areas 415 920
Upper Thames tributaries ESA Permanent grassland
1a 30 2452
1b Extensive permanent grassland 105 1735
155 383
2 Wet grassland
Reversion of arable land to extensive permanent grassland
3a 290 462
Reversion of arable land to wet grassland
Fig. 1. Food and coastal defense.
local residents, are represented (although in prac-tice, the extent of this change varies among loca-tions). Given their direct role in influencing whether or not wetland restoration takes place, it is important to consider the way in which these organisations have changed and to discuss whether they contribute to the attainment of envi-ronmental goals.
IDBs may also exert an indirect influence over whether wetland restoration takes place through their role as providers of information and in potentially reducing transaction costs in enabling groups of farmers to reach an agreement. In this way, they are very like the water management
institutions described by Loehman and Dinar (1994) in the context of an irrigation externality problem in the Central Valley of California. Os-trom (1990) also provides similar examples with regard to irrigation.
drainage of land within their district, and they have powers to carry out drainage work within all watercourses of the internal drainage district ex-cept the main rivers, which come under the remit of the Environment Agency. However, perhaps water management organisations would better de-scribe their current role. Since 1991, new legisla-tion has given them some conservation responsibilities. There are about 248 such organi-sations in England and Wales, though they differ greatly in size and structure. The variation in size partly reflects topographical differences in local river catchments and drainage systems and partly reflects amalgamations (Friend and Laffin, 1983). Apart from their supervisory role, IDBs also carry out many of the practical tasks of water management. This work varies from the regular clearing of weeds and ‘sludging out’ of channels in order to maintain the required levels of water flow, to the more complex design, construction and operation of systems to control water tables using pumping stations, sluice gates and other apparatus.
Board members are elected by the drainage ratepayers in their area on a property-based fran-chise in which the number of votes which an elector may cast (up to a maximum of ten) de-pends on the rateable value of his/her property. Thus the system gives more votes to those occu-piers who contribute higher drainage rates. Re-cently, local authorities have been able to nominate members in numbers commensurate with the proportion of the Board’s total income that they contribute. The maximum number of such nominated members provides a bare major-ity of one over the elected members (Institution of Civil Engineers, 1996).
Although legislation gives IDBs a greater role, they have often been perceived as run by local farming cliques exclusively serving agricultural in-terests (Baldock et al., 1990). In the 1960s and 1970s, IDBs were particularly active in serving the collective needs of farmers. Agricultural produc-tion subsidies and the generous government grant aid provided for both arterial and in-field drainage, gave a powerful incentive for farmers and their representative bodies to lower water tables. IDBs acted as the institution through
which an arterial drainage system could be agreed upon and implemented. According to Morris (1990), IDBs also exerted an important influence on whether or not farmers chose to take advan-tage of the opportunities presented by land drainage. He writes that where formal (IDB) or informal drainage organisations were present, ‘Farmers were most aware of the potential of improved drainage, they pushed for improve-ments to be carried out, were quick to exploit new opportunities, and the organisations ensured that necessary follow-up work, operation or mainte-nance was carried out’. This role as an informa-tion provider and a forum for establishing co-ordination indicates that such organisations were able to reduce the transactions costs in-volved in coming to an agreement. This is similar to the role of NGOs (described in Section 3) concerning watershed management in Haiti. Thus it may be expected that IDBs could also facilitate collective action in a conservation context. This would require IDBs to have a positive attitude towards conservation — which could depend on who is represented on the Boards and how schemes are financed.
In recent years, there has been some reform of IDBs. Among the environmental responsibilities imposed on IDBs in the Land Drainage Act 1991 is to ‘further the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological or physiographical features of special interest consistent with any enactments relating to their functions’. MAFF (who have the main policy responsibility for flood and coastal defence) stress that the use of the term ‘to further’ implies a positive obligation and they strongly advise operating authorities to consult relevant organisations such as English Nature or the Countryside Agency, even where it is not a statu-tory requirement to do so, before carrying out any work. Consultations should attempt to ensure that damage to the environment is minimised or prevented and also to encourage the conservation and enhancement of wildlife and landscape and to create new habitats.
in SSSIs. A WLMP is ‘an agreed schedule of operations for each water control structure within a given area, outlining target water levels for specified periods during the year or agreed re-sponses to certain conditions’ (Swash, 1993). The operating authority is responsible for drawing up the WLMP, and in the case of SSSIs, there must be close consultation with English Nature (in England) or the Countryside Council for Wales. Since water level management is so important for certain species, these WLMPs, if implemented, are potentially important in a wetland restoration context.
The domination of IDBs by farmers, especially in this historic context of their role in land drainage and the ensuing environmental damage, provides a reason why they have been severely criticised by those representing environmental in-terests. For example, Buisson (1991) called for the abolition of IDBs and transfer of their responsi-bilities to the National Rivers Authority (now the Environment Agency). A decision-making pro-cess, which places power in the hands of the farmers and landowners, led to a ‘vociferous call for reform from the nature conservation move-ment’. Baldock et al. (1990) also explained the negative influence that IDBs had in the Somerset Levels and Moors. They were described as being ‘a law unto themselves’ and ‘at the heart’ of the prevailing conservation problems on the Levels and Moors.
However, not all reports of the actions of IDBs have been so negative. George (1992) notes how the Lower Bure, Halvergate Fleet and Acle Marshes IDB altered water levels in some of its arterial drains so that graziers could take advan-tage of the ESA’s provision, enabling 942 ha of marsh qualifying for tier one payments in 1988 to
meet the tier two criteria. This suggests that at least some IDBs do help facilitate farmer involve-ment in schemes and that they can respond to the collective needs of farmers in a conservation context.
5. Summary of the findings from a survey of IDB representatives
Given these changes, a survey was undertaken of IDBs to investigate the extent to which they have taken up their conservation responsibilities and to examine their potential role in wetland restoration (Dunn et al., 1994). The survey was of 62 boards across the country (25% of the total). It was decided to concentrate on IDBs within Eng-land. A wide geographical mix of IDBs was achieved, covering the counties of Yorkshire, Nottinghamshire, Lincolnshire, Norfolk, Suffolk, Cambridgeshire, Kent and Somerset (see Table 2). The survey was in the form of semi-structured face-to-face interviews. We will summarise some of the main findings.
All of the boards that were visited were aware of their obligations to further conservation under the 1991 Drainage Act. Although very few had a written conservation policy, all said that they did have a strategy within which they worked and that conservation was considered in everyday op-erations and decisions taken. There were varying degrees of enthusiasm among different boards ranging from those who were very pro-active and wanted to take the initiative in creating new habi-tats and enhancing the environment to those who were more reactive and wanted to be seen to be doing something purely from a public relations point of view.
Table 2
Coverage of the total area of internal drainage districts
Agricultural area (ha)a Number of SSSIs
PRIVATE Number of IDBs Total area (ha) Area pumpeda
623 930 223
1 135 907 1 030 693 Total in England 248
62 338 027 100 238 658
Sample 380 064
25% 32% 44% 38%
% of total 33%
Most of the IDBs felt that their management practices had changed in recent years to incorpo-rate conservation measures, although the type and extent of measures varied considerably across boards. Several boards had extended the use of environmental management practices, which were initially introduced in SSSIs to cover the rest of their districts. In general, the smaller, more tradi-tional boards, which had fewer staff, were less involved in environmental practices. The larger boards (which covered a broader area) were more often involved in activities such as creating new habitat, planting trees and hedges and drawing up agreements with local wildlife trusts. Since larger boards were more likely to contain land owned by conservation bodies or SSSIs, it is not surprising to see a relationship between size of board and conservation interest. Perhaps what matters here is not the size of the board per se, but rather whether conservation bodies own land in the loca-tion and are therefore represented on the board.
One of the larger boards, the Kings Lynn Con-sortium, had a separate conservation committee. This comprised seven people and included a board member who worked for English Nature, another who was a trustee of the Norfolk Natu-ralists Trust, two academic ecologists and the chief conservation officer of the Broads Author-ity. This board is working with English Nature to create a GIS system which will help show what areas should be conserved. Another group of boards had a full-time conservation officer whose post was grant-aided by English Nature. It is his job to liase with the environmental bodies and set out the IDBs’ conservation strategy. Many of the other boards had a conservation committee, and with only one exception, the representatives inter-viewed indicated a good working relationship with conservation bodies.
Most of the IDB respondents could identify at least one area where it would be possible to re-create wetland, although the size of the area varied considerably. In East Anglia, most of the boards had certain pockets of land, usually on the extreme edges of the catchment, which were self-contained and which, with the owner’s consent, could practicably be turned into wetland areas with minimum risk of flooding to the surrounding
area. Those interviewed emphasised feasibility is-sues in identifying suitable land: that the area should be at the upstream end of the pumping system, that it is a self-contained area independent of the adjoining drainage systems and that there is a fresh water supply to keep the levels high. The ability to manage the raising and maintenance of high water levels precisely often depends on the presence of considerable water management in-frastructure. Ironically, in the absence of further investment in infrastructure, this criterion would make wetland restoration more feasible on flat or gently sloping land, which also tends to be most profitable for agriculture. In fact the areas which the clerks or engineers identified as being most suitable for wetland restoration were often on the highly productive agricultural land, rather than on the areas of lower grade land in the district. This highlights the complexity involved in balanc-ing the opportunity cost and environmental benefits in identifying land suitable for wetland restoration.
All of the IDB respondents stated that they would be willing to help in any scheme that involved water level management as long as that was what rate-payers required. They would have to undertake substantial feasibility work to ensure that raising water levels in one area would allow a safe level of flood protection for other land users. The larger IDBs in particular were keen to have a very pro-active role. This suggests the potential responsiveness of IDBs to economic opportuni-ties, as opposed to their having a narrow preoccu-pation with agricultural production.
6. Potential of the new water management institutions and the need for reform
6.1. The role of IDBs
conservation could take place. IDBs in general have detailed local knowledge of water tables and flows, soil characteristics and variations in farm-ing practice (Friend and Laffin, 1983). This makes existing organisations a potentially a rich source of information for policy makers interested in targeting areas for wetland restoration, or conser-vation more generally. However, although some of the larger IDBs appear very constructive in efforts to restore habitat, there are other smaller IDBs that have no formal conservation represen-tation on their boards and appear to give little attention to conservation issues and opportuni-ties. There are some aspects of how these institu-tions are constituted that may impede the development of any new role they might have as more general water management institutions.
Within many IDBs, representation is still very highly skewed in favour of agricultural landhold-ers. The voting procedure, as discussed above, gives farmers with higher value (and therefore more productive) agricultural land greater weight in the voting procedure. This is due to the fact that rates, the IDBs’ main source of income, are calculated on the basis of the value of land and buildings. This voting procedure for IDBs has long ago been considered as outdated (Ministry of Agriculture Fisheries and Food, 1985). Given the statutory remit of IDBs and their role as providers of public goods, there is a case for allowing for more formal representation of con-servation interests on boards, even in districts where conservation organisations are not impor-tant landholders. Such a move would not be unprecedented in the light of recent changes to local authority representation.
Similarly, one could argue that if IDBs are providing public goods, there needs to be some change in the way activities are financed. There is a general argument for central contributions to local spending in cases where the central govern-ment or residents of other localities have an inter-est in particular aspects of an authority’s spending (Helm and Smith, 1987). However, there is cur-rently no mechanism by which IDBs can fully recover costs for work they undertake specifically for environmental reasons. Although, they are eligible for a capital grant of 25% from MAFF
for specific projects (rising to 50% in special pro-tected areas), the implication is that ratepayers must pay at least half of the proposed costs. Unless affected ratepayers increase their contribu-tion, this would reduce the revenue available to IDBs to carry out other types of work within the catchment. Hence this system of financing reduces the incentive for such organisations to consider more ambitious projects — even where the public benefit could be very high. On this basis, it could be argued that where projects are carried out with a ‘public good’ objective, organisations should be eligible for full compensation for technical work that is directly related to the scale of the public good provided. This would follow the ‘Provider Gets’ principle (OECD, 1994; Hanley et al., 1998).
6.2. Incenti6es for collecti6e action
If IDBs were reformed, they might also be more effective in identifying opportunities for wetland restoration and there might be more examples of boards undertaking similar activities to those of the Kings Lynn consortium. They might also be more enthusiastic about providing information to farmers about possible environmental schemes and reducing the transactions costs of farmer co-operation where this is an issue.
schemes within their area and to sound out poten-tial participation among local landholders. Advice from local conservation bodies could help in iden-tifying potential conservation outputs appropriate in local circumstances.
A major disadvantage of the existing approach is that the rate of compensation is the same for each landholder despite the inevitable variations in costs between farmers. Introducing more flex-ible agreements would allow scope for levels of compensation to be varied between group mem-bers and perhaps reduce the problem of one or two high cost landholders holding out against the local scheme. On the other hand, bargaining be-tween landholders could introduce its own incen-tive problems and inefficiencies. However, neighbouring farmers involved in similar produc-tion operaproduc-tions are in a good posiproduc-tion to judge what costs are reasonable in assessing fair com-pensation — unlike the government agency, where often a problem of ‘asymmetric informa-tion’ is experienced (Moxey et al., 1999).
The incentive for cost-effectiveness could be promoted through competitive tendering (see e.g. Latacz-Lohmann and Van der Hamsvoort, 1998) whereby tenders for contracts from different groups of farmers would be scored by the govern-ment in terms of the environgovern-mental benefits of-fered and the payment levels demanded. This provides an incentive for landholders not to state an excessive cost for the proposed action. This process of competitive tendering would also en-hance the efficiency and transparency of the deci-sion-making process in that projects could be evaluated in relation to each other, and projects with highest net benefit could be funded. Incorpo-ration of environmental assessment or cost – benefit appraisal techniques into the process of assessing competitive tenders would allow more explicit consideration of the potential environ-mental and economic benefits of increased size.
7. Conclusion
There is a clear rationale for collective action in restoring wetland areas. More could be done to encourage farmers to act collectively by
introduc-ing more flexibility into the agreements offered to farmers. This offers a more equitable and cost effective alternative to suggestions that schemes should be made compulsory. However, since wa-ter management institutions (IDBs) may also ex-ert an influence on whether wetland restoration proposals are accepted, it is important to consider whether the current institutional structure is ap-propriate for the multiple objectives such organi-sations have to consider.
In many IDBs, there is still a strong bias to-wards agricultural interests. Although there have been some positive changes in how IDBs operate, questions need to be asked about representation on the boards and how they are financed. Perhaps if IDBs were not already present in localities, it would not be a good idea to create them in their present form. There may be a conflict between keeping the institutional capital that has been developed over the years and reorienting incen-tives towards a more open attitude to environ-mental conservation. To farmers, IDBs have an established role in providing information about possible schemes and reducing the transaction costs of farmer co-operation. Friend and Laffin (1983) recognised the strength of the IDBs in their regular contact with farmers and their perceived accessibility. To policy makers, IDBs are poten-tially an important source of information about where wetland restoration schemes could be un-dertaken. It may be easier to change the structure of existing institutions than to create new ones.
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