How to reduce mangrove forest extraction in the mekong river delta of vietnam a common pool resource experiment

UNIVERSITY OF ECONOMICS, HO CHI MINH CITY
VIET NAM – NETHERLANDS PROJECT FOR M.A. PROGRAM IN
DEVELOPMENT ECONOMICS

HOW TO REDUCE MANGROVE FOREST EXTRACTION
IN THE MEKONG RIVER DELTA OF VIETNAM?
A COMMON POOL RESOURCE EXPERIMENT
----------o0o--------A thesis submitted in partial fulfillment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS
By
VU QUANG VINH
Academic Supervisor:
TRUONG DANG THUY

HO CHI MINH CITY, DECEMBER 2015


Vu Quang Vinh

Thesis

VNP20

UNIVERSITY OF ECONOMIC

INSTITUTE OF SOCIAL STUDIES

HO CHI MINH CITY

THE HAGUE

VIET NAM

THE NETHERLANDS

VIETNAM – NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

HOW TO REDUCE MANGROVE FOREST EXTRACTION
IN THE MEKONG RIVER DELTA OF VIETNAM?

A COMMON POOL RESOURCE EXPERIMENT
A thesis submitted in partial fulfillment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

VU QUANG VINH

Academic Supervisor:

TRUONG DANG THUY

HO CHI MINH CITY, DECEMBER 2015


Vu Quang Vinh

Thesis

VNP20

DECLARATION
“This is to certify that this thesis entitled “How to reduce mangrove forest extraction in the
Mekong River Delta of Vietnam? A Common Pool Resource Experiment”, which is submitted by
me in fulfillment of the requirements for the degree of Master of Art in Development Economics
to the Vietnam – The Netherlands Programme (VNP).
The thesis constitutes only my original work and due supervision and acknowledgement have
been made in the text to all materials used.”
Vu Quang Vinh


Vu Quang Vinh

Thesis

VNP20

ACKNOWLEDGEMENTS
This thesis would not have been able to finish without the support and guidance from
many people. Firstly, I wish to express my deepest gratitude to my supervisor Truong Dang Thuy
for the continuous support of my thesis, for his generosity and dedication in sharing his wisdom
guiding me to rethink and to deconstruct my thesis topic. His excellent guidance helped me in all
the time of research and writing of this thesis. He spent a lot of time to support me about the
reference materials as well as give me advices about what should to do for my thesis. Moreover,
he took time to diligently review all my thesis drafts and help me correct errors and clear my
thinking as well. Moreover, the most wonderful thing is that he provided me an opportunity to
join his team as intern, let me experience the research of mangrove forest in the field and gave
access to the experimental data and research facilities.
Besides my supervisor, I would also like to thank all my friends here at VNP. Together
we have struggled through this whole treasured journey of learning and shared memorable

moments. I thank my fellows for their insightful comments and the stimulating discussions, they
were always willing to help and give me best suggestions. Then, I express my gratitude to VNP
officers as well as VNP librarian for their support of comfort lab room and study materials and I
want to say thanks to EEPSEA for funding the data collection.
Finally, I would like to thank my family for supporting me spiritually throughout writing
this thesis and to my girl friend who always stood by me through the good times and difficult.


Vu Quang Vinh

Thesis

VNP20

ABBREVIATIONS
ASEAN

Association of Southeast Asian Nations

CICES

The Common International Classification of Ecosystem Services

CPR

Common Pool Resource

FAO

Agriculture Organization of the United Nations

GIZ

Deutsche Gesellschaft für Internationale Zusammenarbeit

ICZN

Integrated Coastal Zone Management

ICZN/CCCEP Integrated Coastal Zone Management/ Climate Change and Coastal
Ecosystems in Mekong Delta Vietnam Program
MARD

Ministry of Agriculture and Rural Development

MONRE

Ministry of Natural Resources and Environment

OLS

Ordinary Least Square

PES

Payments for Environmental Services

UNCED

The United Nations Conference on Environment and Development

WCED

World Council of Environmental and Development


Vu Quang Vinh

Thesis

VNP20

ABSTRACT
Using data from series of experiment in six selected provinces in Southwestern Vietnam
in March and April 2015, this thesis aims to analyze the impact of mangrove forest policies and
programs on people behavior towards exploring mangrove forest. Common pool resource
experiment is applied to examine the behavior of people in making decision. To control for
heterogeneity of individuals, I utilize the past behavior proposed by Frey and Meier (2004).
There is robust evidence that people will quickly change their behavior if their profitability is
varied, however, the local authorities must control the unexpected influence in using financial
reward. In addition, it suggested that government should combine many measures to get more
successful in inducing people to protect mangrove forest.

Keywords: Mangrove forest, Common pool resource, Game theory, Experiment


Vu Quang Vinh

Thesis

VNP20

TABLE OF CONTENTS
Chapter 1: Introduction................................................................................................................................. 1
1.1

Problem statement.............................................................................................................................. 1

1.2

Research question............................................................................................................................... 3

1.3

Scope OF STUDY................................................................................................................................ 3

1.4

Methodology and data....................................................................................................................... 4

1.5

The structure of the study................................................................................................................ 5

Chapter 2: Literature review........................................................................................................................ 6
2.1

Mangrove’s ecological services....................................................................................................... 6

2.2

Mangrove forest and market failures........................................................................................... 7

2.3

Literature review on the common pool resources experiments........................................... 9

2.4

Main hypotheses................................................................................................................................ 15

Chapter 3: Methodology and data............................................................................................................ 19
3.1
Methodology....................................................................................................................................... 19
3.2.1
Sampling strategy
19
3.2.2
The interview
19
The structure of questionnaire
.....................................................................................................................................................................

19
Procedures of interviewing
.....................................................................................................................................................................

21
3.2.3

The experiment
21
Experimental design

.....................................................................................................................................................................

21
Payoffs
.....................................................................................................................................................................

23
Additional information
.....................................................................................................................................................................

25
Procedures of conducting CPR game
.....................................................................................................................................................................

25
3.2

Data........................................................................................................................................................ 26


Chapter 4: Empirical results...................................................................................................................... 29
4.1
Mangrove forest in vietnam.......................................................................................................... 29
4.1.1
The current situation of mangrove forests in the Mekong River Delta
29

4.1.2
The situation of mangroves management in the Mekong River Delta
31
4.1.3
The current situation of other common pool resources in Vietnam
33
Fishing
.....................................................................................................................................................................

33
Water
.....................................................................................................................................................................

34
Forest
.....................................................................................................................................................................

34
4.2
Non-parametric analysis................................................................................................................ 35
4.2.1
Descriptive statistics
35
4.2.2
Treatment 1: information.
39


Vu Quang Vinh

4.2.3
4.3

Thesis

VNP20

Treatment 2 and treatment 3: social comparison and profitability.
39

Regression results............................................................................................................................. 43

4.4
Discussion............................................................................................................................................ 49
4.4.1
Hypotheses
49
4.4.2
Other discussions and limitations
51
Chapter 5: Conclusions and policy implications................................................................................. 53
5.1

Conclusions......................................................................................................................................... 53

5.2

Policy implications............................................................................................................................ 53

References......................................................................................................................................................... 55

Appendix........................................................................................................................................................... 60


Vu Quang Vinh

Thesis

VNP20

LIST OF FIGURES
Figure 4-1: Chart of change in mangroves area of Vietnam from 1943 to 2013............................... 29
Figure 4-2: ASEAN mangrove forest distribution map (NASA/USGS)............................................. 30
Figure 4-3: Chart of change in mangroves area of the South Vietnam from 1943 to 2008............31
Figure 4-4: The average extraction in 20 rounds...................................................................................... 36
Figure 4-5: The average extraction with treatments distinction............................................................ 37
Figure 4-6: Frequencies of extraction area in two stages by treatment groups.................................. 38
Figure 4-7: The average extraction in 20 rounds with treatment of information.............................. 39
Figure 4-8: The average extraction in 20 rounds with treatment of social comparison...................40
Figure 4-9: The average extraction in 20 rounds with treatment of profitability.............................. 41
Figure 4-10: The average payoff and average extraction across social comparison treatment over
20 rounds................................................................................................................................................... 52


Vu Quang Vinh

Thesis

VNP20

LIST OF TABLES

Table 2-1: Comparison between ecological wetland and ecological mangrove functions................6
Table 3-1: Description of some variables................................................................................................... 27
Table 4-1: Summary about forest-holders and forest types.................................................................... 33
Table 4-2: The changes in forest area from 1945 to 2002 (unit: 1,000,000 hectares)......................35
Table 4-3: The average extraction through treatments............................................................................ 38
Table 4-4: Summary of main characteristics.............................................................................................. 42
Table 4-5: Regressions for individual extracted area............................................................................... 43
Table 4-6: Regressions with three treatments............................................................................................ 46
Table 4-7: The average payoff across treatments and stages (units: VND)........................................ 48

LIST OFAPPENDIX
Appendix 1: Introduction to game rules...................................................................................................... 60
Appendix 2: The payoff table........................................................................................................................ 64
Appendix 3: Information sheet...................................................................................................................... 69
Appendix 4: Consent form............................................................................................................................. 72
Appendix 5: Questionnaire table.................................................................................................................. 73
Appendix 6: Three types of mangrove forest and their main functions............................................ 117
Appendix 7: The situation of mangroves in some provinces in Mekong Delta region in 2012 . 118

Appendix 8: Global mangrove forest distribution map (NASA/USGS)........................................... 118
Appendix 9: The correlation matrix........................................................................................................... 119


Vu Quang Vinh

Thesis

VNP20

CHAPTER 1: INTRODUCTION

1.1 PROBLEM STATEMENT
The concept of “sustainable development” appeared in the report “Our Common
Future” by the World Council of Environmental and Development (WCED) of United Nations
in 1987. It is defined as “development that meets the needs of the present without
compromising the ability of future generations to meet their own need.” The Earth Summit on
Environment and Development (UNCED) in Rio de Janeiro in 1992 and the World Summit on
Sustainable Development in Johannesburg in 2002 identified a “sustainable development”
should satisfy economic development, social development and environmental protection.
Sustainable development is the inevitable trend in the evolution of human society. In there,
environmental protection is one of the imperative needs in the context of status of global
climate changes. Vietnam is one of countries that are greatly influenced by climate change;
furthermore, the economic-society development still depends heavily on the exploitation of
natural resources. Therefore, protecting natural resources in general and common pool
resources in particular are the priority issues have to be resolved thoroughly.
Mangrove forest, which is one of common pool resources, provides material for healthy,
living and manufacturing, energy source, protect people from storm, tsunami as well as contribute
to mitigate the impacts of climate changes such as global warming. In Vietnam, because of
important role of mangrove forests in protecting seashore the government conducted many
programs and policies to improve the situation of mangroves. However, the obtained results are
not satisfactory: during the early period (2000 – 2006), there is a significant increase in area but in
recent years, the mangrove forest area tends to decline (2008 – 2013). This result raises several
questions about the efficiency as well as the rationality of related measures that government
researched and deployed. Moreover, the individuals and households who are subjects of these
programs and policies are also considered as a factor in interpreting the results. In the mangrove
forest area in Vietnam, the living conditions of most people are so difficult, and they often use
backward methods to do for a living. In addition, there is unreasonable in making practical and
effective use of mangrove forest, the local communities extract firewood,

1

Vu Quang Vinh

Thesis

VNP20

wood and seafood under the mangroves canopy but do not pay attention to restore the
mangrove forest (Que and Hai 2012). Due to these reasons, the individuals and households are
the weak links of a chain in executing mangroves conservation projects.
When introducing new policies and regulations, according to conventional economic
theories, policy makers assume that individuals will be motivated by their own interest without
regard for others. However, Cardenas, Stranlund and Willis (2000) found that people do not always
comport themselves with this way but could between self and group interests. They explained that
the external regulations that aimed to control the local environment quality can “crowd out otherregarding behavior” and hence people will become more self-interested in making decisions. It
means that the benefits from performing new regulations are unlike the initial expectations. And
the local regulations may be ineffective if “the cost of achieving acceptable levels of compliance”
exceeds that benefits. However, individuals respond not only the cost of performing new
regulations but also other factors, i.e. their wealth (Cardenas 2003), personal characteristics
(Cárdenas and Ostrom 2004) or social context of the community (Janssen et al. 2013). In 2005,
Cardenas conducted another experiment in Colombia with villagers and students, in which the
individuals were asked about their preferences toward the application of external regulations
through voting mechanism. Cardenas (2005) pointed out that there is a significant difference in
behavior between group of villagers and group of student when an external regulation is imposed.
For this reason, the author suggested unless we replicate the experiment in the field after doing it
in the laboratory, we would miss some related information. Base on these suggestions and other
relevant paper, the simultaneous interview is also needed. Although there is some mangrove forest
research in Vietnam such as Werthmann, Weingart and Kirk (2010), Thu and Populus (2007), many
of them concentrated on survey data and used statistical methods to analyze (Tuyen 2014;
McNally, McEwin and Holland 2011). Most of studies by Vietnamese also focused on the issues of

mangrove restoration (GIZ Kien Giang Team 2012; Que and Hai 2012), mangrove forest
management (Dung and Tinh 2006; Que and Hai 2012), or the role of mangroves (Ngot et al.
2014). However, the reality showed that the human factors, especially those living in areas with
mangrove forests, also play an important role in protecting mangrove forest. Although other
studies have also referred to the

2


Vu Quang Vinh

Thesis

VNP20

human factor, they are not properly emphasized or just barely mentioned (Mai and Thang
2011). This study focuses on the human behavior by combining both descriptive statistics and
regression model with the specific treatments. Thereby, we propose specific measures to
encourage people to participate in forest protection more effective.

1.2 RESEARCH QUESTION
The objective of this study is to find out how farmers’ decision making is influenced by
the economic benefit and other behavior, under different hypothesized situation. For reducing
mangrove forest extraction in the Mekong River Delta of Vietnam, we will deal with these
following questions:
-

If farmers know others’ benefits could be harmed as they do extraction, do they
reduce mangrove forest extraction?

-

If farmers know their extraction is higher than that of others, do they reduce
mangrove forest extraction?

-

If profit of farmers from extracting mangrove area change, do they reduce
mangrove forest extraction?

We use regression analysis to examine the effect of these treatments in converting
mangrove forest to other uses. In the regressions, we also examine the influences of personal
characteristics and social context on one’s making decision.

1.3 SCOPE OF STUDY
The experiments and interviews will be conducted in some selected communes of six
provinces in the South Vietnam. Those six provinces are Tra Vinh, Soc Trang, Kien Giang, Ca
Mau, Ben Tre and Bac Lieu where there is a significant share of mangrove forest area in the
South. In which, Soc Trang, Tra Vinh and Ben Tre are the province archived the highest rate of
successful reforestation, 91.7%, 87.8% and 80.2% respectively while Bac Lieu, Kien Giang
and Ca Mau get the lower one with 43.6%, 57.3% and 79.5% respectively according to
statistical data of Southern Forest Planning and Surveying Sub-Institute in 2010.
The Mekong River valley is great potential of fishery, total production of fisheries in
2008 is 3.9 million tons in which fishing contributed 1.9 million tons and shrimp farming

3


Vu Quang Vinh

Thesis

VNP20

contributed 2.0 million tons. In addition, total economic value of fishery is estimated about 3.9
– 7.0 million USD (Mekong River Commission (MRC) 2010). In Vietnam, the communities in
Mekong River valley could be divided into two groups: island group and coastal group. For
coastal group, fishing only dominate about labor force as well as generating income for people
in a few communities while agricultural activities play a major role in island group. However,
offshore fishing is only suitable for some wealthier household while inshore fishing is not
encouraged by government. Besides that, farming is coming up against difficulties about water
deficiency. Although shrimp farming is just ranked number two following agricultural
activities, the community recognized that this is a potential and sustainable livelihood
(Mekong River Commission (MRC) 2010). These activities are also influenced directly if
there are any changes in mangroves situation such as storm and flood, saltwater intrusion and
the changes in volume of aquatic species. Therefore, in this study the subjects include who do
at least one of three types of livelihoods following: shrimp farming, fishing and farming.

1.4 METHODOLOGY AND DATA
As we mentioned in the research question section, there is consider consistency in the
causal relationships between the assumptions and the consequences. In these cases, the
experiments are often used to predict phenomena and explained the causation. It means that
experimental research is able to manipulate the predictor variable and subjects to identify the
relationship between causes and effects (cause-and-effect relationship). Therefore, the
experiment method is appropriated for this study.
In this study, we will conduct a series of experiments in six selected provinces in the
Southern Viet Nam. As noted in the introduction, we designed the experiments to emulate the
actual incentives that households face where their benefit from converting mangrove forestland to
agricultural land for production purposes with a social dilemma concerning environmental quality.
The individual’s benefits usually increase for one more unit of converted area, but the aggregate

extraction will reduce the common benefits from keeping mangrove forest, such as flood and
storm protection and desalinization. Therefore, payoffs from playing game would be generated
from a function level of converted area that individual choose and the total converted area in a
group. The mangrove forest policies and programs are also introduced into the game

4


Vu Quang Vinh

Thesis

VNP20

as the treatments. To focus the impact of these on individual extracting – behavior as well as
eliminate other influences such as free rider, the non-cooperative game is recommended. The
interview is conducted simultaneously to control other personal characteristics. Our
experiments were undertaken during March and April 2015 in Tra Vinh, Soc Trang, Ben Tre,
Kien Giang, Bac Lieu and Ca Mau. The specific communes were chosen because they meet
fully requirement of sampling with significant mangrove forest.
For analyzing, we just use the graph and simple OLS method with dependent variable
is the converted area of mangroves in each round. The round is treated as time series data and
the identification code of each player is the cross-section data. The data will be collected from
the experiments and from the interviews in paper, and then we enter data into the computer.
After doing data cleaning, we will use them for descriptive statistics and doing regressions.

1.5 THE STRUCTURE OF THE STUDY
Organization of the paper is as follows. In chapter 1, we provide an overview about
relationship between sustainable development and mangrove forest conservation, the necessity
of this study including research questions and brief methodology. Chapter 2 will summary

about the ecological services of mangroves and the findings of other relevant research with
suggested control variables and the hypotheses. After that, we will present details of the
methodology and data description in chapter 3. The first section of Chapter 4 focuses the
current situation of mangrove forest in the Mekong River Delta as well as the other common
pool resources in Vietnam. The next section of Chapter 4 is about the experiment results in
non-parametric analysis and regression interpretation and we will discuss about the hypotheses
and other conflict results in the last section. We conclude the thesis with policy implications in
the final chapter.

5


Vu Quang Vinh

Thesis

VNP20

CHAPTER 2: LITERATURE REVIEW
2.1 MANGROVE’S ECOLOGICAL SERVICES
Mangrove forest is a group of trees and shrubs that live in coastal intertidal zone
including shorelines and estuaries in the tropics and sub-tropics. In these places, the water is
100 times saltier than elsewhere, so only mangroves can grow normally. All over the world,
there is about 137.760 square kilometer of mangrove forest (2010), which was announced by
NASA/USGS after analyzing data from The Landsat Program. In which the largest areas are
Indonesia, Brazil and Australia account for 21%, 9% and 7% of total mangrove forest area
respectively.
Mangrove forests provide a wide range of vital services as well as play an important
role in the ecological system. In general, economists divide the economic value of mangroves
into three parts: direct use values, indirect use value and non-use values. Base on this

classification and modifications from previous papers, Brander et al. (2006) summarized ten
ecological functions of wetland. In Salem and Mercer (2012), the authors adjusted these
functions for mangroves with seven functions including (i) Flood and flow control, (ii) Storm
buffering/sediment retention, (iii) Water quality maintenance/nutrient retention, (iv) Habitat
and nursery for plant and animal species, (v) Biodiversity, (vi) Carbon sequestration and (vii)
Natural environment, as shown in Table 2-1. Besides, there are other divisions based on
ecosystem service of mangrove, e.g. CICES with Delphi technique in Mukherjee et al. (2014)
and Lee et al. (2014).
Table 2-1: Comparison between ecological wetland and ecological mangrove functions
Ecological functions
of wetland

Ecological functions
of mangroves

Flood and flow control

Flood and flow control

Flood protection

Storm buffering
Sediment retention

Storm
buffering/sediment
retention

Ground

wate
r
recharge/discharge

Economic goods and
services

Value type

*

Indirect use

Storm protection
*
Storm protection

*

Indirect use
Indirect use

Water supply

Indirect use

6


Vu Quang Vinh

Ecological functions
of wetland
Water
quality
maintenance/nutrient
retention
Habitat and nursery
for plant and animal
species

Thesis

Ecological functions
of mangroves
Water
quality
maintenance/nutrient
retention
Habitat and nursery for
plant
and
animal
species

VNP20

Economic goods and
services

Value type

*

Indirect use
Direct use

Improved water quality
*
Waste disposal
Commercial fishing
*
hunting
Recreational fishing

and Direct use
and Direct use

*

hunting
Harvesting
materials

of

natural Direct use

*
*

Biological diversity

Biodiversity

Energy resources
Appreciation of

Direct use
species Non-use

*

existence
Climate stabilization

Micro-climate
stabilization
Carbon sequestration

Carbon sequestration

Natural environment

Natural environment

Indirect use

Reduced global warming
Amenity

*

*

Recreational activities
Appreciation of uniqueness
to culture/heritage

Indirect use
Direct use
Direct use
Non-use

Source: Adapted from Brander et al. (2006), Cabrera et al. (1998) and Salem and Mercer (2012). *Denotes the
economic goods and services are presented in Salem and Mercer (2012); in function “Natural environment”,
Salem and Mercer modified its structure with two components: “Recreation, tourism” (instead of “Recreational
activities”) and “Existence, bequest, option value” (instead of “Appreciation of uniqueness to culture/heritage).

2.2 MANGROVE FOREST AND MARKET FAILURES
Every day, there are many people extract common pool resources or gain from them;
even we do not use or consume them. Moreover, because of these externalities, many of these
common resources are market failure.
Assume that we have free a free market where buyers and sellers do transactions freely
without any government control (or just a little bit), there are two persons, one extracts common
pool resources, and other one does not. The person who does extraction will use the material

7


Vu Quang Vinh

Thesis

VNP20

from common pool resources to manufacture goods and services, and then provides them to
remain one. In the free market, the price will be set based on a mutual agreement between
buyer and seller. As we mentioned above, the common pool resources benefit us by somehow
and it is also a rival goods, consequently the extraction of this one will reduce the happiness or
fortunes of that one. The seller should take these values of common pool resources into
account as a discount when he or she builds the price. It is similar to someone have to pay an
access fee to the common pool resources and it will be subsidized to others who do not extract
that resource. Ambec and Sebi (2011) showed that because of extraction costs differ for
different ones, there are someone loses while others win. The lack of information in this case
causes the market failure.
In an article about introduction to market failure of Professor Edward Morey,
University of Colorado Boulder, the author indicated another reason that makes market fails.
That is, in case of resource free access no one bear in mind “the opportunity cost to society” of
doing extraction because people do not have to pay any costs. Due to some particular
characteristics, it is very hard to exclude anyone from exploiting common pool resources. The
common pool resources are almost free to access and therefore, people often put a zero price
on common pool resource.
Additionally, the inequality could be considered as a cause of market failure. The gap
between income between each other leads to the fact that someone will gain more from
common resources and someone else receive less. For example, a fisher who has a larger
fishing vessel will catch and store more fish than a fisher has a smaller one. Because the first
one can earn more by selling more fishes, he can buy more vessels or upgrade his vessel to be
larger, and then he will earn much more. Because fishes are “rival”, if the first one catches
more and more fish, the second one may be having nothing.
And the common reason that free market fails with common pool resources is not to assign

property right adequately. There are two cases, no assignation and assign to wrong person.
(Mankiw 2012) said that if the property right were not well established, market would fail in
allocating resource efficiently. In case a part of common pool resource does not have an identified
property right, mean that there is no one control that part legally, someone will make

8


Vu Quang Vinh

Thesis

VNP20

corrupt use of his or her power to violate the resource. The Vedan company pollutes Thi Vai
River is a good example. For many years, the inhabitants who live along the Thi Vai River
realized the worsening quality of water due to infectious sewage from manufacturing activities
of Vedan. However, no one has the right to ask Vedan to be responsible for their actions until
the authorities involved. In the second case when the legal rights are put into wrong ones, it is
the same as we give someone some advantages over others but unofficial or something like
that. For example, a household who live near the forest is distributed a smaller part of forest
for management whereas a commercial man can “buy” a larger one with unclear purposes.
Base on suggestion of Lant et al. (2008) in similar issues, property law can make natural
capital, i.e. common pool resources, become marketable goods and services and, therefore,
make market fails.

2.3 LITERATURE REVIEW ON THE COMMON POOL RESOURCES
EXPERIMENTS
Mangrove forest is one of common pool resources, so that, understand the research about
other common pool resources also help us in studying this resource. Firstly, we will to learn how

people behave toward common pool resource and what would happen in that case. Hardin (1968)
described the scenario of grazing cattle as “the tragedy of commons”, this theory states that
“individuals acting rationally and independently” according to their own self-interest will use up
the supply of common pool resource, even if it is conflicting with the best interest of the group. In
story of Hardin (1968), the individual farmers brought as many cattle as possible to the free
grazing area, because it was beneficial for them or in other words, they were “acting rationally and
independently” for themselves. However, the pasture became unusable quickly when each
individual acted in this way. In addition, everyone in-group would suffer this loss as a whole as the
shared resource was depleted. The tragedy of the commons is often brought up when people
discuss environmental issues. In this study, we examine the case of deforesting mangrove forest
for production purpose such as farming and shrimp farming. While converting mangrove
forestland to agricultural land may directly benefit those who own and use the land, the cost of
losing that mangrove forestland is more widely distributed. As an individual, it may be beneficial
to earn money by selling fish and shrimp from ponds that is converted from

9


Vu Quang Vinh

Thesis

VNP20

mangrove forestland. Each individual would try to convert as many mangroves area as
possible to earn more money even if all the others were doing the same thing. Extracting
mangrove forest leads to increase salinization, erosion, pollution and environmental
degradation. However, because the mangrove forest is 'common' and shared by everyone, the
overall public has to deal with these problems each person contributes. As this behavior
continues, the mangrove forest (the common pool resource) is eventually depleted and all

people over the world (the group as a whole) suffer.
Secondly, we inspect the behavior of people in extracting common pool resource in
detail to determine what factors affect that behavior. In field experiments of Cardenas,
Stranlund and Willis (2000) the crowding-out behavior of group-oriented is affected by
external interventions. People will change their activities if they feel something outside affects
their benefits. “…Crowded out group- regarding behavior in favor of greater self- interest”
(Cardenas, Stranlund and Willis 2000) is the main reason, which makes the negative effect of
external control policy. It means that, when publishing any policies to control the improving
environmental quality, the government should recognize who will be affected by that policy
and who confront that policy completely. Cardenas (2004) indicated that the effect of
regulatory is different in different level of penalty. In additional, people respond more factors
than just the expected cost of regulation in reality. Besides, there are many motivations in
using a common resource, so that policies also satisfy those motivations. In reaching the
targets of improving environmental quality, the manipulation of information can make the
results are not good as we expect. Cardenas (2004) suggested that the effect of state regulators
can “often be negative in terms of inducing a self-governed solution to the commons dilemma,
particularly where regulation by the state is costly and difficulty”. Titmuss, Oakley and Ashton
(1997) concluded that people are willing to do something if they volunteer to do that rather
than give them financial rewards. Similarly, the authors also suggested that we should not try
to correct them by enforce a stronger method, because it will make all thing worse.
Zero distribution hypotheses said that the government should impose a set of regulations to
help the users of common pool resource reaching their own long-term interests. However, Ostrom
(2014) showed a different view in evaluating social norms. Her study represented,

10


Vu Quang Vinh

Thesis

VNP20

although it needs more works to demonstrate conclusively, the users of common pool resource
will manage local resource better if they can “devise and enforce” their regulations and no
need government enforcement. Even the effort of national government is one of threats to
sustained collective action according to this research.
Altruism, reciprocity and conformity can be used as an interpretation in many cases of
cooperating to use common pool resources. Cox (2004) confirmed there exist “trust” and
“reciprocity” in investment game in his research. Berg, Dickhaut and McCabe (1995) developed
the investment game; in there all subjects are divided into two groups and be arranged in two
separate rooms, called the room A group and the room B group. At the beginning, each subject will
be received ten bills of $1. Each individual subject in room A has the right to transfer any integer
number of their own bills (from 0 to 10) to a paired person who they do not know in room B and
he or she can keep the remainder. The experimenter had multiplied this amount by three times
before delivered them to that anonymous person. To the room B subjects, they could return part,
all, or none of that tripled amount, which they received from the anonymous paired person in room
A. Based on this game, James C.Cox conducted an experiment and through setting up one of three
treatments is investment game, he identified trusting behavior and reciprocating behavior in one’s
preferences. Velez, Stranlund and Murphy (2009) combined all altruism, reciprocity and
conformity with self-interest in multiple model of behavior to test that statement. Moreover, these
authors showed that the conformity is more sensible than reciprocity in explaining conditional
cooperation; even the conformity could generate the reciprocal behavior of subjects. They also
suggested that this finding is potential implication for managing resources or publishing relative
regulations. Cox (2004) also emphasized in conclusion “Beliefs about other altruistic and
reciprocity behavior should be incorporated in the model.” Furthermore, the living context of each
subject has some certain influences to their decisions in experiments. In research of Castillo and
Saysel, they suggested modelers to use modeling as a tool to “determine the relevant factors in
decision making in common pool resource management”. And in this research, they found that the
cooperation attitudes of an individual in real life correlate with the decision-making process in the

experiments of that one.

11


Vu Quang Vinh

Thesis

VNP20

Another theory is also used to explain the one’s behavior is theory of “Conditional
cooperation”. This theory says the contribution of people will increase on average if they
know that others also contribute and the effect will vary depending on their behavior in the
past. Frey and Meier (2004) performed a survey at the University of Zurich to test this theory
in their research. Each student will be informed about two charitable funds, one is used to
support foreign students and one offered to students who faced the financial difficulty the lowinterest loans. They had the opportunity to contribute to one fund or both of two funds with a
different compulsory tuition fee for each fund, or even did not give any contribution. After
nine semester periods, the authors found the relationship between one’s expectation about
others’ doing and his behavior. Moreover, the results from this research confirmed the
presence of fairness preferences of people such as reciprocity in their behavior. Ferraro,
Miranda and Price (2011) conducted an experiment in Cobb County, a suburban county of
Georgia, U.S, about the saving water of residents. This study wants to learn about the longterm patterns in using water of residents through some social treatments in attempt to reduce
“water use”. The most important finding is the treatment of comparison still impacts on water
use significantly for some periods. It means that the method of comparing the activities of
customers to that of their neighbors is efficient. However, the decreasing over time also shows
that there exist some restrictions. Through learning about the behavior of resource users in
Thailand and Colombia, Janssen et al. (2013) also found out the expectations of people about
their neighbors is a major reason for the different in making decision of each one. The
outsiders also have the similar impacts. The experiences in managing resources as well as the

regulations just play a secondary role. Agree with the work of Velez, Stranlund and Murphy
(2009), one attention point more is we should put the context’s residents like cultural village as
a fundamental factor to interpret the results of experiment. The establishment of rules bases on
norms is also used as a reason in explaining the behavior of residents. It can make people
cooperate with others to improve welfare or do against the social benefit.
Determinants of behavior toward common resources
As we discussed, there are many factors affect to the process of decision-making of
each player in experiments. Some above research recommended several variables following:

12


Vu Quang Vinh

Thesis

VNP20

Age and education: Velez, Stranlund and Murphy (2009) examined the effects of age and
education on individual behavior in fishing management for each region. Age were not
statistical significant, but we should include it in our interview. We expect that the older are
often more thoughtful and careful than the young people, so their behavior will be more stable
and vice versa. Education has positive and significant effect in that research and this is
possible result. Higher educated person understands the rules better than lower educated one
and then they choose a good extraction level to get more payoffs. Lower educated ones, on the
contrary, even do not know what level they should choose. Cardenas, Stranlund and Willis
(2000) also included age and schooling in the research and found significance of them by
analyzing each group. “Age” variable and “Education” variable will be measured by the years
of age and the schooling years respectively.
Gender and time living in region: even though gender variable and time living in region is

collected in research of Velez, Stanlund and Murphy (2009), the authors did not include them
in regressing because of lacking variability. However, gender may be an important variable
and it is suggested in research of Cardenas (1999), Cárdenas, and Ostrom (2004). In our
expectation, male subjects are more likely to take risks. Additionally, in selected provinces that
we should conduct series of experiments, male subjects could have higher education level than
female on average. Gender is a qualitative variable, so that number “1” denotes male and
number “0” denotes female. For time living in region variable, we measure by the number of
years that person lives in current region and if they were born and grown in there we will note
by number “99”.
Income level: besides age and schooling, Cardenas, Stranlund and Willis (2000) added
income level to determine whether the effect of income on making decision of participants.
Cardenas (1999) also found that the impact of actual wealth and occupation in terms of
explaining cooperation in his experiments. Income of each one come from their primary
occupation and may in fact be from mangrove forest related activities. It is hard to collect the
information about exploiting mangrove forest of households, especially the activities relate to
money. We still expect that there is only a part of community has income from extracting
mangrove forest higher than from their main doing.

13


Vu Quang Vinh

Thesis

VNP20

Type of livelihood: due to the type of common pool resource and the object of research,
each study considers many different kinds of livelihood of communities. In 2000, Cardenas
and his colleagues conducted a series of experiments near the area of local tropical cloud

forests; so in that place the usual work are forestry activities. Velez, Stanlund and Murphy
(2009) only focused on three regions with the primary work are fishery. In the research of
Janssen et al. (2013), the author crafted three kinds of game depend on resident’s context
including irrigation game, fishery game and forestry game. Ferraro, Miranda and Price (2011)
even did not care much about customer’s career; the impact of treatments is the most
interested issue. Therefore, choosing what kind of livelihood relies on where we carry out the
experiments. In selected Southwestern provinces, fishery, aquaculture, and growing are three
primary activities of the local people. In contrast to above previous research, we use type of
livelihood as a control variable to explain the behavior of each player base on their work. We
expect that if their work is more dependent on mangrove forest, they may be more cautions in
extracting. It also shows their experience toward managing mangrove forest.
The past behavior and behavior of others: Frey and Meier (2004) have shown that the
behavior of one person in contributing correlates express expectation. This expectation comes
from two sources: from themselves and from others. In 2004, Bruno S. Frey and Stephan Meier
found that if one person contributed in the past, he would tend to contribute in the present. In
additional, when they know the information about others’ contribution, they will change their
contribution slightly depending on the level of contribution of others. The players will base on
their past contribution as well as the total contribution for each round to make decision. In our
experiment, this information will be notified to all players and we can collect them easily.

Level of communication: due to discussions of Cardenas, Stranlund and Willis (2000),
Cárdenas and Ostrom (2004), Velez, Stanlund and Murphy (2009), Ferraro, Miranda and Price
(2011) and Janssen et al. (2013) about context’s residents, we see that a person who
communicate with the community tend to correct their behavior conformably. To identify the
level of communication of each one, we ask them some questions about the projects of
conserving mangrove forests in their residence:
- Do you realize any changes of mangrove forest in some recent years (in area)?

14