How do common pool natural resources relate to rural income, poverty and inequality? A multi-country assessment

Abstract

The role of Common Pool natural Resources (CPRs) such as forests, grasslands, rivers, lakes, wetlands and oceans in rural economies has been much debated in the literature, often on the basis of micro-level or provincial-scale analyses and focusing on a single type of CPR, typically forests. This study draws on data from 6,509 households across fifteen regions in nine low and middle-income countries covering Africa, Asia, and Latin America that also cover a diverse set of CPRs, including forests, savannas, grasslands, mangroves and inland and marine fisheries. We estimate the contribution of CPR-based income to total household income and vis-a-vis the poverty line across income classes, and analyse the correlates of CPR-based income and the relationship between CPR income and income inequality within rural settlements. Our results highlight three important aspects of the CPR-rural income relationship. First, they confirm that CPR-based income makes up a significant portion of the income of the rural poor even across diverse geographies and CPRs. Households below the World Bank $1.9 per capita per day poverty line derive on average one fourth of their household income from CPRs. Second, the regression results highlight the importance of physical resource abundance and social accessibility, household demography, the regional demographic/market context, and most importantly the complementary productive assets owned by households in deriving income from CPRs. Third, there is a distinct correlation between the broad nature of CPR harvest technologies and income-inequality: when the harvest technology is capital-intensive, richer households derive more monetary benefit from CPRs, not only in absolute terms but also in terms of share in household income, leading to a situation where such CPRs exacerbate inequality within settlements. Our results highlight the importance of integrating a diversity of CPRs and CPR availability, access and technological context into CPR studies. They also highlight the need for pro-poor policies that go beyond securing resource access and include support for the poor to access technologies and markets.