Natural Resources Management

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Contributor: World Bank
Author: Decentralization Thematic Team
Contact: Jennie Litvack

Natural Resource Management & the Environment

The term "natural resource management" (NRM) encompasses a broad spectrum of activities and projects. This information bulletin is focused on those NRM activities that specifically require the participation of local communities for their sustainable management. Examples of these kinds of projects include: micro-watershed management, irrigation water management, soil and water conservation, community forestry, community-based coastal zone fisheries management, and conservation of biodiversity. Experiences have shown that centralized "top-down" conservation is only effective with large expenditures on enforcement or under undemocratic circumstances. As an alternative, participation of different types of stakeholders is now considered to be essential for effective and sustainable management and conservation of natural resource systems. It is generally accepted that participation by local communities can be fostered by a significant degree of decentralization. While focusing on decentralization to communities, the note recognizes that there are theoretical and practical arguments for higher level governments and the international community to play an active role in NRM. Management and utilization of the natural resources has implications for sub-national, national, and supranational territorial units, because of diverse costs and benefits associated with how and where they are managed. Furthermore, numerous dangers exist in delegating responsibility for management to local entities and communities that may themselves be undemocratic, unaccountable, and controlled by a small and powerful local elite. The following table outlines some of the general principles for assigning functions, while the rest of the note elaborates on guidelines for decentralizing natural resource management to communities.



Central Government Local/Community
Coordinating compensation for resources.The market does not always compensate for resource use: management and exploitation of resources by one community can lead to negative externalities for another community. One frequently effective means of resolving the conflicts which arise from these externalities is to compensate affected communities. Higher levels of government, possibly even international bodies. An example of this pattern is the well known example of rich countries compensating poorer countries to maintain forest reserves, in order to slow ozone depletion.  
Specific Resource Management Resources (e.g., rangeland management) where the the minimum unit for sustainable management is too large, or the resource users cannot be clearly identified. Most other resources.
Implementing environmental strategy Should create conditions for large-scale adoption of successful local efforts, also facilitate coordination between local units. Perform day-to-day resource management: levy user charges, enforce compliance with exclusion orders, manage financial resource, etc.
Three inter-related issues need to be considered when seeking to understand the relationship between decentralization and natural resource management:

1) Enabling policy and institutional environment

Decentralization policies have potential to encourage the evolution of community-based institutions to manage natural resources locally. The propensity of individuals to organize themselves into institutions for collective action will be partly determined by the expected pay-offs. The benefits of cooperative management will, in turn, be affected by the:
  • nature of property rights for resources (i.e., whether private or common, and how well-defined)
  • legal status of community-based institutions and whether they have authority to manage financial resources, levy user charges, enforce compliance with exclusion orders, etc.
  • macro-economic conditions affecting the financial viability of small producers
  • extent of rural infrastructure which affects the ease of access to arkets for local producers

2) Participatory processes for establishing community-based groups

Evidence suggests that community-based groups are an effective means of managing the free-rider problems associated with most resource management regimes. Decentralization policies on their own, however, are not necessarily sufficient to result in the formation of these community-based groups. Catalytic external agencies using participatory processes are also required to facilitate and build local organizational capacity, effective community participation, and local control and authority over decisions and resources. Important issues to consider in strengthening local organizational capacity are:
  • entry point subprojects that result in positive financial and/or economic returns to local communities while attaining sustainable resource management goals - the incentive for collective action
  • benefits from management of natural resources must accrue quickly, locally, transparently, and as equitably as possible given the resource constraints - providing incentives to as many resource users as possible
  • externalities and asymmetric costs and benefits associated with most natural resource management activities means that appropriate financial incentives are required for co-financing entry point subprojects with local communities -- improving the incentives

3) Effective operational linkages between institutional actors to facilitate large-scale adoption of sustainable NRM practices.

There are many successful examples of using participatory processes for the formation of local management systems. However, most of these successes only operate on a small scale. The challenge lies in creating the conditions for large-scale adoption of successful community-based management systems. This requires effective operational linkages between the public sector, private sector, and community-based groups. Issues to be considered include:

  • review and restructuring of public sector agencies to become more responsive to clients
  • decentralization of responsibility and authority for resource management decisions to the most appropriate level (subsidiarity)
  • design of appropriate decentralized financial instrument (e.g., social fund, demand driven rural investment fund, or local development fund) for financing community-based resource management initiatives
  • decentralized financial instruments must enable community-based local procurement of goods and services.
It must be recognized that knowledge and examples of good practices in this sphere are limited. Therefore, all decentralized systems of resource management must pay particular attention to monitoring and evaluation. Apart form regular financial and physical tracking of program performance, the monitoring systems need to assess the participatory processes, transparency, accountability, equity, effectiveness of institutional and operational linkages, and technical aspects of local management regimes. Furthermore, the impacts of the institutional arrangements need to be regularly assessed in order to ascertain whether the welfare of the poor is being adversely affected by resource management regimes.