Understanding Human Actions and Institutional Change: What Are the Impacts of Power Asymmetries on Efficiency in Pasture Use?

Ulan Kasymov, Dimitrios Zikos
2017 Resources  
The paper investigates actions and decisions of agricultural resource users and explores their implications for institutional change and natural resource management in the post-socialist context of Central Asia. More specifically, the authors propose a novel methodological approach for the aforementioned context to support policy-relevant research that explicitly addresses behavioral responses of pastoralists in Kyrgyzstan. The paper builds on distributive and economic theories of institutional
more » ... es of institutional change and combines findings from lab and field framed economic experiments with complementary qualitative methods (questionnaires, group discussions and semi-structured interviews). By these means the authors test the impact of a specific variable on institutional change in pasture use: the role of power and specifically the difference in the ability of players to "survive" in a bargaining game without an agreement. The impact of power asymmetries and its implications for cooperation and the efficiency of bargaining outcomes are discussed and analyzed. Experimental results largely confirm findings reported in the literature: as players learn about the game and the behavior of others, they adjust their decisions accordingly; the subjects also exhibit other-regarding preferences, resulting to the prevalence of relatively equally distributed gains as an outcome. Furthermore, the findings of the study suggest that under the condition of incomplete information about the preferences of other players, the experimental subjects internalize the game as a group. The authors propose that an explanatory variable for such situations might be that actual shared beliefs of pasture users assist players to economize on information processing and coordinate the bargaining in an effective way. From this perspective, the paper raises a series of questions regarding the proposition that power asymmetry leads to inefficient bargaining outcomes, and provides some first insights for further investigation. of institutional change have been proposed, but wishing to keep our account short, we focus on distributive and economic theories of institutional change that offer alternative, yet complementary in our view, interpretations of the main drivers for such change. Economic theory views institutional change primarily as the result of contracting between economic actors, whereas distributive bargaining theory perceives institutions to be equilibriums achieved through bargaining outcomes. The "naive" version of such an economic approach assumes that institutional change is the result of opportunities for Pareto improvements which arise because of price changes or new production and monitoring technologies [2] . The advanced version, however, includes transaction costs in the analysis and assumes that bargaining and transaction costs may block the establishment of efficient institutions [3] . In this respect, power and efficiency considerations of actors are suggested as alternative determinants of institutional change. However, due to the complexity of institutional change, actors-who intentionally make decisions concerning new institutions based on their beliefs about the potential benefits offered by different institutional forms-may be disappointed by its unintended consequences. This might contribute to difficulties in distinguishing the predictions of economic and distributional theories. Jack Knight and Douglass North [4] underline that economic and distributional theories share common assumptions about the motivations of actors but are different in their claims about the context in which they make their choices. They argue that both theories can be complementary, depending on the set of conditions within which interactions and institutional change are occurring. The aim of this paper is to explore how power asymmetry as a vital condition in the context of rural Kyrgyzstan, can affect the outcomes of interactions (efficiency). In order to investigate this relationship we conducted framed laboratory and field bargaining experiments based on Rubinstein's bargaining game [5] . Our motivation is to advance the understanding of the individual preferences and bargaining strategies of pasture users. Our findings contribute to the rich literature comparing decisions between students and resource users in experimental games [6] [7] [8] [9] . Although, this is a well explored field, no such comparison has been made for the Rubinstein's game, at least to our knowledge. The experimental results have been complemented by additional qualitative findings (from questionnaires, group discussions and interviews) to advance our understanding and enhance the analysis of the given socio-ecological pastoral context in which bargaining takes place. The paper is structured as follows: First, we briefly introduce the institutional context in pasture management in Kyrgyzstan and provide an illustrative bargaining situation (Section 2). In the following we present Knight's and Oliver Williamson's positions on the role of power and efficiency in social interactions according to bargaining theory (Section 3). Here we also describe the design of the pasture experiment and we outline the complementary methods used in the study. In the following Section 4, we present the findings from laboratory and field experiments carried out in Kyrgyzstan. In this section, we use the Kolmogorov-Smirnov and contingency coefficient tests in order to measure the deviation between two sets of sample values in the symmetric and asymmetric treatments. In Section 5 we discuss the relation between the demands of players and the bargaining outcomes. The qualitative data acquired complement the analysis by explaining the difference between laboratory and field experimental results. Finally, in the concluding Section 6 we reflect on our findings concerning the role of power, efficiency and shared actor beliefs during bargaining interactions related to pasture use in Kyrgyzstan.
doi:10.3390/resources6040071 fatcat:wkiiafle75cgplmnk7wglvnh2m