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ABSTRACTInternational transfers to developing countries are sometimes advocated on the ground that they contribute to tropical forest conservation. Here we demonstrate that the effectiveness (and attractiveness) of this instrument is reduced if the restrictive assumption of deterministic prices is relaxed. With stochastic prices, the steady-state forest stock in the absence of transfers is greater, implying that the marginal benefit of additional hectares conserved is less. In addition, the 'wealth effect' of transfers counteracts the 'freeing-up effect', which implies that per unit of subsidy fewer hectares of tropical forest are protected. Both effects reduce the attractiveness of transfers as a policy instrument for Western governments to combat tropical deforestation.

Abstract
Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compared output levels across 1,000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labour. The estimated welfare costs of using the loss contract are quite modest—perhaps because the loss contract is viewed as a (soft) commitment device.

Does financial compensation for providing environmental conservation, improve the food security of the rural poor in the drylands of Sub-Saharan Africa? This paper explores this question using data from a randomized controlled trial of a large scale reforestation implemented by the Government of Burkina Faso. Members of communities located around selected protected forests were invited to plant indigenous tree species on degraded areas, and to take care of their maintenance. The financial compensation they would receive depended on the number of trees still alive a year later. The vast majority of the community members participating in the project were farmers, and the timing of the payments coincided with the lean season, when most farmers were at risk of food insecurity. Compared with the control group, the project's participants' households reported 12 percent higher food consumption expenditures, and a reduction in moderate and severe food insecurity by 35 percent to 60 percent. The transfers received were spent mostly on cereals, meat, and pulses, with no evidence of increased consumption of temptation goods.

We derive a dynamic theoretical model of renewable resource extraction. In the social optimum, maximum extraction occurs in the last period only, while in the unique subgame perfect Nash equilibrium, the resource is depleted immediately. The predictions are tested in a field experiment conducted at a recreational fishing pond. The subjects, experienced recreational fishermen, face a dynamic social dilemma, in which they risk depletion of the resource by overfishing. We find strong support for the Nash equilibrium. Fishermen exert as much effort in the last period as in preceding periods, and effort is independent of the stock of fish.