Land allocation under dual individual–collective use in Mexico

Abstract

Households typically have to decide on allocating the resources which they control between individualized activities and activities where there is common access. In this case, the ability to cooperate in the management of common access resources determines the relative profitability of the two resource bundles, hence, affecting the allocation of resources held by households to one or the other. The Mexican social sector is of this type, with land under individual jurisdiction allocated to either crops or pastures: the product of land in crops is privately appropriated, while land in pastures is collectively grazed. We develop a model that shows that, when cooperation fails in the management of collectively grazed pastures, more land is allocated to crops than under successful cooperation and less to pastures, while the stocking rate on pastures is increased. This results in too much land in extensive crops and too many animals per hectare of pasture—a well-known observation for Mexico. This prediction is confirmed by analysis of data from a sample of Mexican social sector households.