Institutional Arrangements for Watershed Managment: A case study of Arenal, Costa Rica
The CREED Costa Rica project conducted an exhaustive quantitative inquiry into the economic factors that determine land use in Río Chiquito watershed of Lake Arenal, Costa Rica and found that livestock production is likely to produce positive hydrological externalities. This paper integrates these results into an application of the Institutional Analysis and Development Framework that is informed by a participatory process conducted with watershed stakeholders. The paper identifies physical measures, institutional arrangements and incentives mechanisms to stimulate improved watershed management in Río Chiquito by expanding the analysis beyond just the internalization of hydrological externalities, to consideration of the larger bundle of goods and services provided by the watershed. In so doing it provides a refined vision for the Action Program drafted by stakeholders. The latter is evaluated using IAD criteria and found to be a promising improvement over current arrangements.