Transaction costs for SSSIs and policy design

Abstract

Agri-environmental good provision has been stimulated in recent years by various schemes based on compensation payments to landowners. The transaction costs of implementing these schemes can be expected to vary according to the design of the scheme, but little empirical analysis has been done to calculate transaction costs and to assess their impact. This paper compares the scheme-related transaction costs of individually negotiated and standard management agreements under the Wildlife Enhancement Scheme (WES) for sites of special scientific interest in the North of England. The findings are of international interest with regard to the future development of nature conservation policy, particularly in European countries. The results show that WES agreements are more expensive with regard to both compensation and transaction costs over the whole agreement life-cycle than individually negotiated agreements.