How Do Common Pool Natural Resources Affect Rural Poverty and Inequality? A Multi-Country Comparison

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 and context-specific analyses focusing on a single CPR in a single location. This paper draws on data from nine low and medium-income countries of Africa, Asia, and Latin America to estimate the contribution of CPR-based income to poverty and inequality, and to explore how CPR-based income is associated with household assets, the abundance of CPRs, and institutions of resource access.Our analysis confirms that CPR income contributes significantly to the income of the rural poor. Households below the World Bank $1.9 poverty line derive on average one fourth of their household income from CPR. Therefore, there is a potential synergy between SDGs 14 (conserving life below water) and 15 (conserving life on land), and SDG 1 (poverty reduction). Elite households, however, generally benefit more from CPRs, not because of differential access to the resource but because of their differential access to complementary productive assets, financial capital, social networks and markets. Hence, CPRs reduce inequality only when resource extraction is done for subsistence purposes using labour-intensive methods.

Keywords: Common Pool Resources, poverty, Inequality, tenure, resource abundance, elite-capture