Incentive Systems for Forest-Based Ecosystem Services with Missing Financial Service Markets

Payments for ecosystem services (PES) is a popular paradigm to address underprovision of ecosystem services in developing economies. Potential PES recipients often experience other market imperfections, which can influence PES uptake and environmental performance. These include poorly functioning financial services markets. We develop a model of nonindustrial timber production with poorly functioning financial service markets and PES. We...