Evaluating the Role of Social Capital in the Sustainable Use of Common-Pool Resource Use: Evidence from Participatory Forest Management in Ethiopia

The concept of social capital has gained considerable attention as an important tool for fostering collective action in the management of common pool resources (CPRs), such as forests. However, social capital is inherently context-dependent, and in contexts where Indigenous communities hold insecure property rights over CPRs, research on how social capital influences resource use decisions remains limited. This study investigates how the cognitive and bonding dimensions of social capital within communities-measured through household surveys-affect forest resource use decisions. The study first predicted theoretically optimum levels of forest resource extraction under both long- and short-term tenure arrangements. It uses the values predicted under the long-term property rights as optimal sustainable extraction. A framed field experiment was conducted in Ethiopia, where participants from communities played resource extraction games in groups under short-term property rights. A group of individuals voted unanimously to establish a non-binding extraction target before making individual extraction decisions, which were either publicly disclosed or kept private. The findings show that the cognitive dimension tends to increase the temptation to set group extraction targets higher than the optimum sustainable level, while the bonding dimension leads to lower group extraction targets as the resource becomes scarcer. Additionally, the cognitive dimension prompts individuals to focus on short-term gains (i.e., leading to more extraction in early rounds). Its influence remains consistent regardless of whether individual extraction decisions are publicly disclosed. In contrast, bonding dimension has no effect. The study concludes that social capital's influence is more context-dependent than anticipated.