Payment-based interventions and non-monetary returns

Payments for ecosystem services (PES) projects, and other efforts like them, often cannot afford to compensate citizens for their entire opportunity costs of cooperating with a policy initiative. While research shows that non-monetary returns to coopertion (i.e., a “warm glow” people feel for engaging in pro-social behavior) can help fill this gap, the strategic dynamics underlying a developer’s choice to invest in establishing non-monetary returns or not remain unclear. I build on recent PES games to explore this issue. Among other things, I show that an interest in limiting costs can give development agencies an incentive to treat non-monetary returns and payments as substitutes rather than complements as intended. I also explore how a threat of elite capture influences an agency’s decision-making in this regard, given that some of the most promising strategies for trying to prime non-monetary returns includes partnering with figures who already command local support.