Monthly Archives: September 2010

171 – Lifestyle landholders

One of the things we often hear about rural areas is that they are losing population. However, there are some parts of rural Australia where the population is growing rapidly, thanks to an influx of ‘lifestyle’ landholders on small properties. For environmental managers, these lifestylers can pose a conundrum. They are obviously different from the commercial farmers that they are used to dealing with, but how are they different, and how will they respond to environmental programs?

With rural sociologist Roger Wilkinson, I did some research in Western Australia and Victoria to help us understand lifestylers better, with the aim of building those insights into our environmental management decision tools (Pannell and Wilkinson, 2009). Here is some of what we found.

There is a lot of variation within the ‘lifestyle’ category. Different people are motivated by different aspects of living on a small rural property, including peace and quiet, freedom from restrictions, recreation, enjoyment, having a good place to raise children, being able to impart values to one’s children, and having a place to recapture one’s sanity.

However, broadly speaking we identified two groupings. One group is very environmentally conscious. They are motivated to look after the land, and mostly know how to do it, although they may need help with logistics and labour.

For the other group, the main objective for their land is for the property to look ‘good’, according to their ideals of a pleasant, often partly wooded, green environment.

In both groups, people often work off the property to earn their main income, so time available for working on their land is limited.

As a result of interviews and some analysis using my Public: Private Benefits Framework (Pannell, 2008), we reached the following conclusions.

  • Trying to achieve changes in land management on lifestyler properties is likely to involve substantially higher transaction costs per hectare than on commercial properties. In part, this is because learning and other transition costs per unit area of land are higher.
  • On the other hand, in the absence of an environmental program, there is likely to be a longer time lag until adoption of new land management practices on lifestyle properties. As a result, there is a greater potential to reduce that lag in an environmental program.
  • Many lifestylers are relatively willing to make environmentally beneficial changes, but usually only on a modest scale. If the environmental problem requires substantial changes (e.g. dryland salinity), this is very unlikely to occur on lifestyle properties. It’s hard to achieve on commercial properties too, of course, but there may be ways to tap into their profit motives to make it happen.
  • Training of inexperienced lifestyle landholders may be able to improve their private net benefits from land management changes.

Overall, it is often harder to justify investment in land-use change by lifestylers than by commercial farmers. The project would need to be one of exceptional public net benefits, and preferably one with low learning costs.

In this light, past decisions by public agencies in Victoria to direct their extension programs more to commercial than to lifestyle landholders may have been justified on efficiency grounds.

David Pannell, The University of Western Australia

Further reading

Pannell, D.J. (2008). Public benefits, private benefits, and policy intervention for land-use change for environmental benefits, Land Economics 84(2): 225-240. Full paper (140K)

Pannell, D.J. and Wilkinson, R. (2009). Policy mechanism choice for environmental management by non-commercial “lifestyle” rural landholders. Ecological Economics 68: 2679-2687

170 – Social capital

One of the most interesting books I’ve read recently is “Making Democracy Work” by Robert Putnam. It explores dramatic differences in the effectiveness of regional governments in Italy, arguing that the main explanation is differences in ‘social capital’.

Social capital refers to features of a society that facilitate cooperation and coordination. It includes the levels of trust that people feel for each other, social norms for reciprocating positive deeds, and the strength of networks within the society.

In the 1970s Italy reformed its democratic system, creating 20 new regional governments. Robert Putnam was studying various aspects of Italian politics, and decided to research how the new governments performed, and why. A synthesis of his research over 25 years is provided in this fascinating book.

He and his collaborators found that there were distinct differences between regions in the performances of the new governments. The best of them were reasonably good at providing services to their communities, and the worst of them were really dreadful. Many different pieces of evidence underpinned this conclusion, and they were quite consistent in their indications of which were the better governments.

One striking example was when the researchers (pretending to be local community members) wrote to each government with identical requests for three pieces of advice or assistance. In the most efficient regions, they received thorough replies within a week or so. In the least efficient regions, none of the mailed inquiries ever received any response at all. They followed up over many weeks with several phone calls and even a personal visit, before finally getting satisfactory responses.

A clear geographic pattern emerged, with the best governments being in the north and the worst in the south. Of course, reasons behind such differences are bound to be complex, but Putnam’s conclusion was that the key factor was the difference in social capital between communities in the north and the south. People in the north were more community-minded. On average, they were more trusting of each other, and they behaved such that the trust was justified. They were more strongly connected to people outside their own families (e.g. through clubs and association) and more likely to reciprocate positive behaviours. These social characteristics and norms tended to flow through into the behaviour of regional government officers, making them more efficient, and reducing for everyone the ‘transaction costs’ of getting things done.

Putnam explained the differences in social capital as being due to differences in political and social histories over many centuries. This suggests that it could be hard to change, which is reflected in his conclusion.

Stocks of social capital, such as trust, norms, and networks, tend to be self-reinforcing and cumulative. Virtuous circles result in social equilibria with high levels of cooperation, trust, reciprocity, civic engagement, and collective well being. These traits define the civic community. Conversely, the absence of these traits in the uncivic community is also self-reinforcing. Defection, distrust, shirking, exploitation, isolation, disorder, and stagnation intensify one another in a suffocating miasma of vicious circles. This argument suggests that there may be at least two broad equilibria toward which all societies that face problems of collective action (that is, all societies) tend to evolve and which, once attained, tend to be self-reinforcing.” (Putnam, 1993, p.177).

It certainly made me glad to live in Australia. In social capital terms, I’m sure we would be as good or better than the best of the Italian regions studied. We’ve got our problems, of course, and I’d be the first to admit that there are plenty of problems with our governments, but it’s clear that we do better than many.

On the other hand, one shouldn’t attribute too much to social capital. I’ve sometimes seen people emphasise it as a driver of environmental behaviour, to the exclusion of other important factors. Certainly it can make a difference, but if other factors are strongly against the adoption of an environmental practices (e.g. Pannell et al., 2006), social capital can’t work miracles.

David Pannell, The University of Western Australia

Further reading

Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F. and Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46(11): 1407-1424.

You can access the paper at: Non-subscribers can buy a copy on-line for A$25 or email to ask for a copy.

Putnam, R.D. (1993). Making Democracy Work: Civic Traditions in Modern Italy, Princeton University Press.

169 – If I were a government minister …

I was recently invited to write an article for the Farm Policy Journal on the topic, ‘If I were minister for agriculture …”. Here is a brief extract from the article that relates to any portfolio, not just agriculture.

The first things I would change, if I had the power, is an aspect of the public service culture in Canberra. I would attempt to foster a reduction in the speed with which people move between jobs. I am told that, currently, if you are an up-and-coming employee in an Australian Government department, and you stay in the same position for as long as two years, your colleagues start to think there must be something wrong with you. Generally people move on into new positions and even new departments very quickly. Few people have enough longevity working in a specific area to develop strong expertise and knowledge of the issues, the relevant research, the people, the myths, the history, the past policies, who the best-informed experts are, and who the snake-oil salesmen are for that area. Two years is not nearly enough, let alone three to six months, which is not uncommon. Of course, a minister cannot stop people from changing jobs if they want to, but it would be possible to create incentives for people with important and relevant expertise to stay put, and this could contribute to cultural change over time.

This culture of rapid job movement leads to a range of problems. It makes it more difficult for departments to be good at recognising flaws in policy proposals, to distinguish the really good proposals from the rest, to avoid capture by persuasive but ill-informed people, or to avoid repeating the same mistakes. It contributes to the problem that, when policies are being designed, consensus within the agency matters too much, and the quality of logic and evidence is not influential enough. It makes it harder to make good but tough decisions.

Secondly, I would attempt to move away from short-termism, to increase the chances of achieving real outcomes in the long term. For understandable political reasons, ministers tend to put a lot of pressure on their departments to spend program resources on things that will deliver benefits as quickly as possible – in particular, before the next election. Often this means that the resources achieve much less than they could do if more time was allowed. Natural Resource Management programs are particularly vulnerable to this problem. Turning around a serious resource degradation problem probably requires at least 15-20 years in most cases, but political pressures mean that the funds tend to be spent on actions that might deliver some sort of outcomes within three years. Usually, these short-term outcomes are not very significant, and they may be lost anyway once the program ends, as there is rarely any process to ensure continuity of funding to maintain benefits that have been achieved.

The over-riding issue is that I would focus on the achievement of real outcomes – real changes in things that really matter. This necessarily implies nurturing strong expertise within the Department, as well as allowing for long slow changes if necessary. It also means taking time to examine and evaluate the options using the best-available information. It means avoiding the tendency to rush into apparently obvious actions without assessing whether they will really work.

David Pannell, The University of Western Australia

Further reading

Pannell, D.J. (2010). If I were minister for agriculture …, Farm Policy Journal 7(2): 15-19.