Pigouvian Rabbits in Tropical Forests

The following guest post is by Prakash Kashwan, an assistant professor of political science at the University of Connecticut.


Might the enthusiastic support for forest conservation in the tropics produce negative social and political consequences, and contribute to environmental degradation?  The answer is yes, and Henry Pigou (of the Pigou tax fame) may have foreseen the potential for such counterintuitive outcomes. In a New York Times blog post entitled “The Real Pigou”, Nobel laureate economist Paul Krugman points to a puzzle of great significance to the scholars of political economy. Discussing the concept of negative externalities, Krugman quotes from Henry Pigou’s classic work “The Economics of Welfare (1932),”

“…incidental uncharged disservices are rendered to third parties when the game-preserving activities of one occupier involve the overrunning of a neighbouring occupier’s land by rabbits”

Thinking aloud about Pigou’s choice of the rabbit metaphor, Krugman remarks,

“The principle is there, all right. But, I mean, rabbits? And no, this wasn’t written in an era when England was still a green and pleasant land; this was written in 1920, when much of the population lived in sooty, smog-ridden industrial conurbations…..Not what I expected”

Krugman’s reflections point to the classical problem of the environment – development tradeoffs. However, Pigou’s use of the rabbit metaphor to explain negative externalities is a useful reminder that even the apparently innocent and normatively desirable outcomes (such as forest conservation) may potentially produce some serious negative consequences. Moreover, because such actions or outcomes are considered to be normatively desirable, we are more likely to ignore their negative consequences. A case in point is the ongoing debates about climate change and what to do about it.

The recent spike in the frequency of catastrophic climate events such as hurricanes and floods has lent urgency to calls for action. In addition to the ongoing debates regarding domestic policies of cap and trade (California’s greenhouse gas cap and trade program is up and running), calls for global action on climate change have also intensified in recent times. One of the key proposals on the table at the U.N. conventions on climate change relates to forest conservation and forest protection in developing countries in the tropics. Because forests capture atmospheric carbon, maintaining natural forests and supporting new forest plantations anywhere in the world will reduce greenhouse gas concentration. This sounds like a great plan – developed countries can contribute meaningfully to global efforts at climate change mitigation, at costs much lower than what similar reductions at home would cost. These arguments are often used to make a case for institutionalizing international carbon offset programs (see, McDermott et al. 2011).

However, these intuitively appealing plans run into steep barriers on the ground, and the full appreciation of these challenges may be difficult precisely for the reasons that may have made Krugman wonder about the Pigouvian rabbits. One possible reason Pigou may have chosen to use rabbits in a discussion of negative externality may have had to do with the normative confusion potentially involved in a discussion of externalities. In other words, no action, however benign, should be deemed to be good (or bad) in an absolute sense. It is the consequences on Pigou’s disinterested actors, which matter more than the nature of the actions in question.  Let us now turn back to the developed country support for forest and biodiversity conservation in the tropics. Are there reasons for environmentalists to be cautious in their support of tropical forest conservation financing?

To begin, unlike in the developed West, property rights are not clearly defined in developing countries. The indigenous and other forest peoples the world over are up in arms against their governments’ claim of forest ownership (also consider the Canadian First Nations’ ongoing Idle No More movement). Given the prevalence of these conflicts, it is rather easy to see that there is high risk in proposals that promise an exchange of funds (from developed states) for forest and biodiversity conservation (in developing states).  A recent GreenPeace report articulates similar concerns against the firms in California buying carbon offsets from the State of Chiapas in Mexico) Even so, the gravity of these problems does not become apparent until one digs a little deeper into the history of political economy of forest exploitation.

The roots of forest property rights conflicts go back to the days when colonial governments, interested mainly in exploiting the rich timber resources in the tropics, nationalized vast territories previously occupied and used by indigenous peoples. Because many post-colonial governments also relied on the exploitation of timber and other natural resources to keep themselves solvent, the colonial era institutions – the combination of property rights and other punitive laws meant to protect those property rights – have lived way beyond their colonial shelf lives. It is these political economic interests of national governments that motivate government-appointed delegates to ask for finances in return for ensuring forest protection at home (Kashwan 2013). The sudden influx of carbon forestry funds creates perverse incentives for national governments and powerful market actors, leading to the phenomenon of green-grab. By this token the well-meaning advocacy of forest conservation in the tropics may have very serious social, political, and environmental consequences. In particular, the rent-seeking activities of the governments and government officials may turn the forest people against the projects aimed at promoting forest conservation, thereby reinforcing old conflicts or creating new conflicts. Such conflicts are in turn likely to lead to increased deforestation and ecological destruction.

Having said this, one would perhaps agree with Krugman about Pigou’s poor choice of rabbits as an exemplar of negative environmental externalities. Nevertheless,  Pigou may then have made a profound statement about the political economy of struggles over environmental resources. Indeed, he may have been thinking well ahead of his time.

12 Responses to Pigouvian Rabbits in Tropical Forests

  1. Sean January 9, 2013 at 9:14 am #

    I don’t think Pigou’s choice of rabbits is at all surprising or poor. Farmers hate rabbits. See, e.g., Mr. MacGregor and Peter Rabbit. Rabbits eat crops (lettuce, beets, etc.) that farmers grow to sell to humans. While an urban forest-lover may look at them and see “cute and fuzzy bunnies,” a farmer looks at them and sees a menace. This very difference in how groups see rabbits – lovable woodland creature v. agricultural pest – actually helps make Pigou’s point. The negative externality might not even look like a negative externality to the person generating it. The forest lover might say to the farmer “they’re rabbits, get over it!” While the farmer is seriously peeved that his cash crop of beets has been devoured.

  2. Prakash Kashwan January 9, 2013 at 10:13 am #

    Thank you for the comment. Yes, indeed! I meant to suggest in the concluding part that it could be lot worse! Rabbits grazing in your fields is bad enough, but this would count as “innocent” harm compared to other situations where people have been displaced – literally thrown off the lands that they have claimed for generations without holding formal legal titles. In addition to my own forthcoming article cited above, the following references discuss these issues:

  3. Vance Maverick January 9, 2013 at 11:21 am #

    Nit: it’s Arthur Pigou. And he was born (per Wikipedia) to gentry on the Isle of Wight, so there might have been a bias toward landed tradition in his choice of example. But as you say, the stubborn persistence of other people and their interests and rights on the land sorely complicates all environmental problems — as farmers and landowners have always known.

    • Prakash Kashwan January 10, 2013 at 10:24 am #

      Vance — thank you for pointing to the mistake. For some strange reason I have always thought of Pigou as Henry Pigou. It is very interesting to think of how his own background may have shaped his ideas about externalities. While Pigou was from the landed/landlord classes, interestingly a large number of “forest peoples”, in particular those in Asia hold tiny parcels of lands (some of them as low as an acre or two). When such “traditional” private holdings are in conflict with “global” environmental interests, it has very different normative implications. That, perhaps, should be the subject of another blog post.

  4. Tara Innes January 10, 2013 at 1:16 am #

    “Such conflicts are in turn likely to lead to increased deforestation and ecological destruction.”
    Have you found research projects that support this claim? I didn’t see anything at the reports/papers you linked to. I am working on a dissertation on land conflict in Indonesia and have found the topic to be under-researched and more complicated than one might originally assume. If you have sources that show conservation projects actually yielding greater environmental damage due to land conflict, I’d be very interested in reading them.

    • Prakash Kashwan January 10, 2013 at 10:34 am #

      Tara – Yes, it is very complex (and, the literature recognizes this in a variety of ways). I wouldn’t know of controlled comparative analyses which measured conservation outcomes in a situation of conflict versus in that of no conflicts, while holding all else constant.

      Indeed, it may be VERY difficult to conduct such studies, because each of the peer reviewed papers I cite above (and, Daniel, in his comments below) suggest, land conflicts are not exogenous to conservation. Exclusionary conservation has been one of the root causes of forest/land conflicts in the global South. You may want to also check the classical debate between Nancy Peluso (and, her group) and Homer-Dixon (and, his group), if you are coming at it from the environmental scarcity –> competition —> conflicts angle.

      At a more broader level, as Dan Brockington says in “Fortress Conservation”, folks in Africa have put up military in national parks who have been authorized to “shoot at sight”. So, Dan says, you don’t actually need local cooperation if you can do something like that (and, there are more gentle, persuasive means of achieving the same kind of exclusion, although somewhat less efficiently). The point is what kind of costs one is willing to protect biodiversity.

      Finally, there is a very interesting body of conservation literature which has empirically shown that cordoning off forests does not always lead to better conservation. I would be able to pull out some of those studies which show that preventing some types of human intervention led to worse conservation outcomes. Hope this helps – I happy to chat more over emails etc. if you would like to.

  5. Daniel Taghioff January 10, 2013 at 9:52 am #

    Hi Tara

    My ethnographic fieldwork shows a situation where poorly implemented, if not venal, conservation policies have led to a land conflict that has put an area in deadlock. It is pretty clear that if you tally the social and conservation issues, simply implementing the relevant laws in earnest would have led to much better outcomes. The interesting questions arise when government departments break their own laws, not exceptionally, but in a widespread and systematic manner, something I have not seen reflected in the literature as of yet.

    I would love to leave a very long comment to this post, but I don’t have the energy. Simply to say that thanks for posting on this, and your take on it is good (partly of course because Prakash also knows what he is talking about.)

    I would just add that this issue needs to be thought in terms of how various kinds of purchasing power (economic, political) impact on various forms of entitlement (to land, to gathering, to migration, to grazing, to raise crops). The politics of how purchasing power cascades from market to market (e.g. carbon / energy to land) and how this impacts on diverse entitlements is likely to define how we understand emerging environmental precarity, as you rightly point out.

    See: 2nd and 3rd papers in:


    • Prakash Kashwan January 10, 2013 at 10:50 am #

      Thanks, Daniel. Love your idea of looking at how political and economic purchasing power “cascade from markets (at one level) to markets (at another level/commodity).

  6. M Car January 10, 2013 at 11:04 am #

    Rabbits are the perfect example, the 19th century introduction of rabbits to Australia lead to a severe ecological and economic disaster that posed a very real threat to livestock farming on the continent. It is famously one of the most disastrous examples of the untindended consequences of messing with the balance of indiginous species. In 1907 thousands (maybe 100s, youu can wiki it) of miles where protected by the erection of a rabbit proof fence, both germane and timely for Pigou.

    I think rabbits where still a big issue well into the 20th century as well.

  7. Ashish Aggarwal January 13, 2013 at 9:23 am #

    Very interesting post and comments. Let me also jump in to it with some nascent thoughts. To me the use of ‘rabbits’ as an externality represents a classic example, simply because of the range of responses it evokes among different constituencies and the kind of dilemmas it generates. Let me add a bit weight to what I say.
    I spent last year in studying two carbon forestry projects in India. In one of the projects, plantations have resulted in increased crop raids by an antelope locally known as Nilgai (Boselaphus tragocamelus). These animals take shelter in the dense bushes and plants and raid crops of the neighboring farmers. The farmers, whose crops are raided are obviously peeved with them. But twist in the tale is that, many of them cannot do anything about it as Nilagai is considered sacred ( It is considered a type of cow, which is sacred for Hindus). While, the minority Muslim farmers do not think twice before targeting these animals, which sometimes leads to conflicts between the two communities.
    So, the externality of the carbon forestry project is being viewed and treated differently by the farmers because of their socio-cultural and religious values. Hence, it is hard to generalize what kind of outcomes ( and externalities) a conservation policy or programme is going to produce across different landscapes because of all these social, economic, political and cultural complexities.
    And for me, its Nilgai, which is more complex than the rabbits!
    Thanks Prakash for this stimulating post.

  8. rahul banerjee January 13, 2013 at 2:41 pm #

    in India at least from colonial times the State has excluded the forestdwellers, mainly tribals, from access to forests which they have traditionally lived in. Initially it was for commercial exploitation and later for wildlife conservation. An attempt in the nineteen seventies and eighties to include forestdwellers in conservation through the joint forest management approach also turned out to be an eyewash as later the tribals were not allowed to harvest the forests that they had conserved. Thus, given this stark difference in power between the Indian State and forestdwellers and the former’s long history of frauds committed on the latter it is doubtful whether transfers of funds to state agencies will translate into actual just payments to the forestdwellers for the eco-system services that they may be called upon to deliver. There is in fact a very high probability of the forestdwellers getting displaced altogether and the forests being handed over to corporate entities in the same way they have been to mining corporations for mining minerals. So there is indeed a cause for concern here that the externalities created by such funding will prove fatal for forestdwellers.