Adaptive responses to inter-group competition over natural resources: The case of leakage

Policies create externalities. In conservation, one of the most common types of externalities is leakage, where damages are exported beyond a policy's jurisdictional boundaries. Although much research has measured leakage, little addresses its impact on the lives of people suffering from damages from leakage. This paper develops a comprehensive modeling framework to formalize the dynamics by which individuals and communities exposed to leakage adapt to the challenges posed. Specifically, we use a combination of bio-economic models, abatement curves, and other ethnographically informed analytic modeling to explore the types of damages caused, how communities can adapt to them, and the consequences of such adaptive processes. The theory points to critical system dynamics necessary to understand when and why leakage produces environmental and economic damage. Firstly, the kinds of damages imposed are fundamentally linked to the resource's health, the incentives of those committing leakage, labor market dynamics, and ecosystem services. Secondly, there is no silver bullet for communities adapting to leakage; adaptation is often costly, which means that stopping all the damages from leakage may be infeasible, requiring communities to make the best of a bad situation and allocate precious resources across various strategies. Finally, the strategies adopted to deal with leakage can have far-reaching negative and positive effects, potentially creating cyclical changes in resource stocks, cascades of further leakage or promoting strict property rights that reshape the social landscape.