Maximizing environmental income for the poor requires changes in the governance of natural resources. The need for such changes is pressing because the poor are at a great disadvantage when it comes to controlling natural resources or the decisions surrounding them. They often lack legal ownership or tenure over land and resources, which restricts their access and makes their homes and livelihoods insecure. They also suffer from a lack of voice in decision-making processes, cutting them out of the decision-making loop. Natural-resource corruption falls harder on the poor as well, who may be the victims of bribe-demanding bureaucrats or illegal logging and fishing facilitated by corrupt officials who look the other way. The poor are also subject to a variety of policies -- such as taxes and various regulations -- that are effectively anti-poor.

These governance burdens make it hard for poor families to plan effectively, to make investments that might allow them to profit from their assets or skills, or to work together effectively to manage common areas or create markets for their products. In other words, governance burdens quickly translate to economic obstacles.

Tenure security is a primary obstacle

Ownership and access are the most fundamental keys to the wealth of nature. Unfortunately, many poor people do not own the land or fishing grounds they rely on for environmental income. This lack of secure tenure makes them vulnerable to being dispossessed of their homes and livelihoods, or, if they rent homes or land, subject to sometimes exorbitant rent payments. The importance of tenure -- or the lack of it -- to the ability to tap nature's wealth can't be stressed too much. The rights to exploit, sell, or bar others from using a resource -- the bundle of rights associated with tenure or ownership -- are essential to legal commerce. Ownership also provides an incentive to manage ecosystems sustainably by assuring that an owner will be able to capture the benefits of long-term investments like soil improvements, tree planting, or restricting fishing seasons to keep fish stocks viable.

Tenure issues affecting the poor involve not only private ownership of land, but also the use of common lands. Many areas under state ownership provide the resource base for poor communities, but these communities often have no legal basis for their use of common pool resources. In many instances, these resources -- whether they are forests, grazing areas, or fishing grounds -- have been governed locally for centuries under traditional forms of "communal tenure," in which resources are owned in common by a group of individuals, such as a village or tribe. Unfortunately, such customary arrangements are often not legally recognized, and conflicts between communal tenure and modern state-recognized ownership frequently threaten rural livelihoods. State recognition of such traditional ownership arrangements or new power-sharing agreements between local communities and the state that grant specific rights to use and profit from the state commons are often important ingredients in successful efforts to tap the wealth of natural systems (Meinzen-Dick and Di Gregorio 2004:1-2).

Lack of voice, participation, and representation

When important decisions about local resources are made, the poor are rarely heard or their interests represented. Often these decisions, such as the awarding of a timber concession on state forest land that may be occupied by poor households, are made in the state capitol or in venues far removed from rural life. Even if they could make it to these decision-making venues, the poor -- and other rural residents as well -- would still be unlikely to find a seat at the table. The right for local resource users to participate in resource decisions is still a relatively new concept in most areas and often not embodied in law. Language barriers,
ignorance of their legal rights, and a lack of full information about how resource decisions are likely to affect them are also potent obstacles to the participation of the poor. Lack of money, of political connections, and of lawyers or other advocates that can articulate their needs are all sources of political isolation and marginalization (WRI et al. 2003:44-64).

The wealthy dominate the economic machinery

Wealthier landowners and traders tend to dominate the resources and economic tools necessary to turn natural resources to wealth. In addition to owning more and better land, livestock, farm machinery, boats, or other assets directly relevant to profiting from ecosystems, the rich also tend to have greater access to resources like irrigation water, seed, fertilizers, pest control, and labor (Narayan and Petesch 2002:58-59, 188; Narayan et al. 2000:49-50; Kerr et al. 2002:61). The wealthy also have easier access to credit, which is a key constraint for the poor wishing to improve their ecosystem assets by planting trees, undertaking soil or water conservation projects, or developing new products or markets.

These advantages are often magnified by the dense and interlinked social networks in rural areas, which tend to reinforce the near-monopoly position enjoyed by some wealthier families, leaving poorer families with fewer options and sometimes all-or-nothing choices (Bardhan 1991:240). For instance, surveys from West Bengal, India, found that laborers tied to their landlords through credit were less likely to take part in group bargaining and agitation for raising rural wages. These indentured workers felt it was a choice between a low wage or no job at all -- a cycle of dependence that can be self-perpetuating (Bardhan 1991:240).

Capture of state-owned natural resources by the elite -- facilitated by corruption

In many cases, state-owned resources like forests and fisheries are opened to exploitation by granting individuals or companies concessional leases or harvest licenses. The wealthy are much more likely to be able to take advantage of these. In Bangladesh, the government leases rights to fish in state-owned water bodies for a period of one to three years through a public auctioning system that generates considerable revenue for the state. Unfortunately, poor fishermen can rarely afford to bid, so the licenses are purchased by rich investors known as "waterlords." These entrepreneurs hire fishermen as daily laborers at low wages, keeping most of the profits for themselves. This has led, in effect, to the institutionalized exploitation of the fishermen by a small rural elite (Béné 2003:964). In other instances, lease holders will exclude the poor altogether from their concession, even though they may have traditionally lived on and collected from these lands.

This problem of the capture of state resources by the elite is worsened by corruption, political patronage, and sweetheart deals for insiders. Such corruption and favoritism often focuses on natural resource concessions in remote areas far from official concern and public scrutiny -- precisely those areas inhabited by the poor. In 2001, Bob Hasan, Indonesia's former Minister of Industry and Trade, was sentenced to prison for forest-related graft worth $75 million. For years, the timber magnate and close associate of former President Suharto dominated Indonesia's lucrative plywood trade, at one point controlling nearly 60 percent of world tropical plywood exports (Borsuk 2003:1; Barr 1998:2, 30).

Apart from its role in enabling the elite capture of state resources, corruption also stands as a fundamental obstacle to the sustainable management of resources and thus another way in which the natural assets of the poor are diminished. Illegal logging and fishing are prime causes of the depletion of common pool resources that the poor depend on, short-circuiting effective state management of ecosystems and undermining customary management arrangements at the village or tribal level as well (WRI et al. 2003:36-38). (See Figure 1.4: Corruption by Sector in South Asia, 2002.) Demands by local officials for bribes or other considerations for access to resources place a special burden on the poor and encourage low-income families to themselves engage in illegal logging, fishing, and other unsustainable resource uses. At a national level, corruption acts as a drag on the economy, behaving essentially as a tax on legitimate businesses. Research shows that corruption suppresses national economic growth -- one of the main requirements for effective and widespread poverty reduction (Thomas et al. 2000:144-150).

Anti-poor taxes and regulations work against economic empowerment

In many countries, natural resource-related activities such as timber extraction, fishing, grazing, small-scale agriculture, and water use are subject to controls and taxes that are regressive with respect to the poor. In China, grain farmers -- many of whom are poor -- until recently were obliged to sell the government a fixed quota of their production at below-market prices, essentially lowering their potential income (Ravallion and Chen 2004:21-22). In Uganda, households face a confusing array of resource-related taxes, which often appear arbitrary to rural families. These include taxes on activities as diverse as smoking fish, growing maize, and slaughtering cows or goats (Ellis and Bahiigwa 2003:1008-1009). Around Lake Chad in central Africa, fishery fees are levied by three distinct groups: by traditional authorities, by the central government, and by soldiers (Béné 2003:970). Such overlapping fees discourage low-income families from engaging in market transactions that would help them generate returns from their access to natural resources.

In addition, well-intentioned environmental regulations are sometimes introduced in a draconian way that hurts the poor. For example, there is evidence that China's 1998 ban on tree felling in the upper watersheds of the Yangtze and Yellow River Basins has had very negative impacts on some poor households. The ban was meant to restore the health of the watersheds and avoid repeating the disastrous floods on the Yangtze that had occurred earlier that year. However, expansion of the logging ban beyond state-owned forests into private and collectively owned land has cost numerous jobs and restricted local communities' access to forest products in these areas (Xu et al. 2002:6, 8). In Mali, a 1986 forest law banned bush fires, made felling of certain species illegal without Forest Department permission, and made wood-saving stoves compulsory. In response, the wood trade was forced underground, and poor people unable to pay fines levied against them had their livestock confiscated (Benjaminsen 2000:97, 99-100).