Providing Agri-environmental Public Goods through Collective Action

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This study analyses the promotion of collective action for agri-environmental public goods and addresses externalities by reviewing the experience of various OECD member countries. Twenty-five cases from

13 countries (Australia, Belgium, Canada, Finland, France, Germany, Italy, Japan, the Netherlands, New Zealand, Spain, Sweden and the United Kingdom) are examined. The study shows that collective action should be given serious consideration as a means of addressing many agricultural and natural resource issues, and in some cases collective action should be actively promoted.

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Annex A. Game theory and collective action

This annex briefly provides several simple examples from game theory that relate to collective action. Sandler (1992) provides a more detailed theoretical exposition. The examples presented below show that although the socially optimal provision of public goods is difficult because of free-rider problems, their provision by collective action may be possible under some conditions. Communication and trust among members, repeated opportunities for co-operation and the size of the benefit from co-operating are factors that favour co-operation. In addition, sanctions and voluntary agreements among members can facilitate co-operation and ensure the provision of public goods associated with agriculture.

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