Conference:
Abstract: "The breakdown of communal management of natural resources is a widely observed phenomenon throughout the developing world. This paper reports on recent changes of the shifting cultivation system in a lowland rainforest area of Sumatra, Indonesia. The customary (adat) system makes forest communal (village) property for a number of uses (e.g. collection of most forest products), but with individual user-rights for swidden cultivation based on the initial clearing of primary forest. The development over the past 10-15 years is typical of the situation in many areas of Southeast Asia: A sharp increase in land claims associated with Government supported projects (transmigration, logging, mining and plantations), population growth, improved accessibility by road construction, and increasing tensions between national and customary law when it comes to land ownership and compensation for land expropriation.
"The farmers response to the external changes has been a sharp increase in (primary) forest clearing, increased rubber planting on the swiddens (which secures individual rights both according to customary and national law), as well as obtaining (expensive) formal land deeds. This has initiated a self-reinforcing race for land and private property rights.
"The paper analyzes these changes within the theory of the demand for and supply of institutional arrangements, as found within neo-institutional economics. A basic premise of this approach is that institutions will change if existing arrangements leave potential gains uncaptured. It is argued, that the recent developments in the study area should be understood as the combination of increased land value, and the fact that this could not be captured under a communal management regimes: Intensification and planting of perennials require more secure and individual rights in order to provide incentives and reduce the free rider problem.Moreover, the state does not provide protection of customary rights in conflicts with outsiders (which included the state itself). In this way, government policy influences the supply of property rights arrangements, and is important in shaping the growth of private property rights, and weakening and possible breakdown of the communal management system."