Economic Instruments generally aim to provide incentives that will induce people to improve the way they use and manage environment and natural resources. However, an Economic Instrument will only create a meaningful incentive if it is correctly matched to the context that it is going to be applied in.
A review of economic instruments that have been applied internationally to offer incentives for improving integrated natural resource management has been undertaken and these have been incorporated into the Afromaison Decision Support Tool. The Decision Support Tool has been developed to assist resource managers or decision makers to ‘walk through the set of selection criteria’ (economic, social, governance and ecological) that will help to evaluate the relevance of the economic instruments in a local context. The Decision Support Tool this assists the process of context-instrument matching with the aim of highlighting the economic instruments that have the greatest potential to create meaningful incentives to change the behaviour of people to improve the way they use and manage environment in a specific contexts. Once these Economic Instruments have been highlighted, the design of the instruments for local implementation needs to be explored and developed to inform. A Design Matrix (DeMax) has therefore been developed by Afromaison to support the design phase of the implementation process.
The DeMax aims to inform:
(i) the assessment of the local potential to implement a selected Economic Instrument in a given context,
(ii) key design considerations for the application of an Economic Instrument in a specific context,
(iii) evaluation of the likely impact and sustainability of the Economic Instrument in that context, and
(iv) highlight potential flaws or barriers to the implementation of the selected Economic Instrument.
The DeMax prompts users to analyse and determine if a series of condition criteria are likely to be met, and evaluate the relevance of the criteria to the context. Notes on the local responses to the condition criteria are notes in the DeMax, and anticipated problems that might limit local implementation of the instrument are flagged. These critical fagged issues are summarised into a list that can then be used to guide the revisions that would be required to effectively implement the incentive.
Once all the condition criteria have been rated, a cumulative score is calculated to provide a guide on whether or not the conditions for effectively implementing the incentive can be met in the local context:
- Proceed with minor caution and attention to aspects of implementation design
- Proceed with caution and attention to likely requirements for significant modification to instrument or receiving environment
- Do not proceed as the instrument is unlikely to match context and create meaningful
If a solution to these critical flagged issues and potential barriers cannot be found (for example a modification to aspects of the Instrument, or an intervention in the local socio-political environment), then it is unlikely that the Instrument will be effective. An alternative Economic Instrument would then need to be explored or an alternative mechanism to Economic Instruments would need to be explored.
The outcome of the DeMax is therefore twofold:
- It provides an approach to evaluate the potential effectiveness and sustainability of an Economic Instrument under specific local conditions.
- It provides a process to highlight flaws or barriers to the implementation of the selected Economic Instrument in a specific local context that would need to be addressed in the design of the Instrument, or the system to implement the Instrument, if it is to be effective and sustainable.