APPENDIX 3. Governance Case Studies. Governance case study 1: Introduction of formal property rights in Bolivian forestry Prior to 1996, smallholders and indigenous groups in Bolivia were not authorised to harvest any timber resources, not even products for household consumption, without government permits. As a result, formal rules were largely ignored by these groups. Because the central government did not have the financial or the human resources to monitor and enforce the formal rules, they became meaningless in terms of influencing actual forest use. A new regulatory framework introduced in 1996 gave smallholders and indigenous groups formal rights to use all forest resources within their property boundaries. As long as this use is limited to household consumption, no government permits are now needed. For the first time in Bolivian history, previously excluded groups are potentially empowered to harvest timber for commercial purposes, although this requires as many as 27 administrative steps (Andersson and Pacheco, forthcoming, Contreras-Hermosillo and Vargas, 2001). Because of the complicated procedure, very few smallholders have actually been able to take advantage of the opportunities offered by the new set of formal rules. This example shows the limitation of formal rules to influence local people’s natural resource use, and illustrates the need for formal rules to consider local practices. Governance case study 2: Long-term dynamics of governance and land-use change in Austria The development of spatial patterns and the intensity of agricultural land use is shaped by environmental constraints, available technology, political regulations and economic conditions, e.g. the development of agricultural markets. In Austria, the years after World War II were characterized by sincere shortage of food and consequent political efforts to increase agricultural production. The so called “green plan” combined the establishment of protected markets and guaranteed prices for agricultural products with financial subsidies for farmers and effectively triggered modernization of the backward structures of Austrian agriculture and an increase in the physical and monetary output of agricultural production. Agricultural modernization was related to a fundamental restructuring of spatial patterns and the intensity of agricultural production: Large-scale mechanization replaced draught animals and labour force, fertilizer and pesticide inputs increased. Specialization and spatial differentiation resulted in a transformation of locally closed agricultural production systems into throughput systems with large external inputs and outputs. This resulted in transfers of large amounts of bulk materials (food, feed and plant nutrients) across large distances both at a national and an international level. Austrian agriculture got increasingly integrated in global markets and consequently the environmental impact of agriculture shifted from a predominantly local level before WWII to a global level. From the 1970s onwards local production and consumption patterns increasingly affected land use in distant regions (Erb, 2004). In the 1970s continuing growth in area productivity triggered by guaranteed prices resulted in increasing environmental pressures on agricultural ecosystems and ground water and in severe overproduction. The latter was not competitive on international markets and was significantly subsidised. Political actors reacted slowly but in the mid- 1980s Austrian agricultural policy was fundamentally restructured and a range of political measures were implemented to get a grip of the agricultural dilemma. A number of measures, among others, can be highlighted to illustrate this: A newly implemented tax on fertilizer decreased fertilizer application which in turn had a positive impact on ground water contamination. In combination with a fallow program which paid farmers to take cropland out of production this contributed to agricultural extensification. A third measure shifted the subsidy system from guaranteed prices to financial subsidies related to the area under cultivation which slowed down further intensification but still protected small scale farming operations. Finally the government aggressively promoted and subsidised the cultivation of oil and protein crops (so called crop alternatives): This should (1) reduce import dependency with respect to protein feed (large amounts were imported from the US and Brazil), (2) help to reduce overproduction of cereals and (3) substitute biofuels (RME, ethanol) for fossils. These political efforts resulted in significant changes in land use intensity and patterns in the Austrian landscape: Fallow and the new crops increased from 3% to more than 20% of cropland between 1985 and 1993 and changed the colour of the Austrian landscape to yellow. Since Austria’s accession to the European Union the increasing liberalization of agricultural markets triggers the delayed structural adjustment of agriculture. This accelerates reforestation of agricultural areas in regions of marginal productivity and intensification of production in fertile regions. The coming GATT rounds and the expected liberalization are likely to severely affect agriculture in sensitive alpine regions (a reduction in grassland based milk production) and wipe out the production of sugar beets in Austria (Krausmann et al., 2003). References Andersson, K. and D. Pacheco. Forthcoming. Turning to Forestry for a Way Out of Poverty: Is Formalizing Property Rights Enough? In B. Guha-Khasnobis, R. Kanbur, and E. Ostrom, editors. Unlocking Human Potential: Beyond Formality and Informality in Developing Countries.. Oxford University Press, Oxford. Contreras-Hermosilla, A., and T. M. Vargas. 2001. Dimensiones Sociales, Ambientales y Económicas de las Reformas en la Política Forestal de Bolivia. Proyecto de Manejo Forestal Sostenible and the Center for International Forestry Research, Santa Cruz, Bolivia. Erb, K.-H. 2004. Actual Land Demand of Austria 1926 - 2000: A Variation on Ecological Footprint Assessments. Land Use Policy 21(3):247-259. Krausmann, F., H. Haberl, N. B. Schulz, K.-H. Erb, E. Darge, and V. Gaube. 2003. Land-use change and socio-economic metabolism in Austria––Part I: driving forces of land-use change: 1950–1995. Land Use Policy 20(1):1-20.