Ecological Fiscal Transfers for Biodiversity Conservation Policy: A Transaction Costs Analysis of Minas Gerais, Brazil

• Published in: Ecological economics 2019-12, Vol.166, p.106425, Article 106425
• Main Authors: Lima de Paulo, Felipe Luiz, Camões, Pedro Jorge Sobral
• Format: Article
• Language: English
• Subjects: Ecological fiscal transfers; Municipal protected area; Transaction-cost politics
• ISSN: 0921-8009; 1873-6106
• DOI: 10.1016/j.ecolecon.2019.106425

This paper addresses the influence of ecological fiscal transfers (EFT) on the policy-making process of adopting local protected areas (PA) by municipal governments. Framed on the transaction-cost politics (TCP), it argues that an EFT schema designed at the state level may affect the expected payoff/costs of local level decisions and the time length to create PA. The mixed research design is composed of two parts: first, a descriptive analysis detailing the evolution of EFT in the state of Minas Gerais since the beginning until its current version; second, an event history analysis of municipal PA adoption from 1966 to 2013. The conclusion suggests that, while there is an overall increase in municipal PA after the introduction of EFT, some design aspects of the instrument such as uncertainty and monitoring costs slowed and flattened that increase. •EFT affects the adoption of protected areas by increasing the incentives to adoption, namely sustainable PAs•The introduction of the quality index reduces the probability of adoption of protected areas•There is a higher degree of transaction costs in integral group of municipal protected areas after the adoption of EFT•The uncertainty surrounding the ecological fiscal transfers increases the costs which may challenge future adoptions