canadian journal of forest research126 husbandry is an exclusive right of the indigenous sami people...

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Bargaining costs in a common pool resource situation – the case of reindeer husbandry and forestry in northern Sweden

Journal: Canadian Journal of Forest Research

Manuscript ID cjfr-2018-0265.R1

Manuscript Type: Article

Date Submitted by the Author: 05-Nov-2018

Complete List of Authors: Widmark, Camilla ; Swedish University of Agricultural Sciences, Department of Forest Economics

Keyword: co-management, forest companies, Sami, Sami community, transaction costs

Is the invited manuscript for consideration in a Special

Issue? :Indigenous Forest Governance

https://mc06.manuscriptcentral.com/cjfr-pubs

Canadian Journal of Forest Research

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Bargaining costs in a common pool resource situation – the case of reindeer husbandry

and forestry in northern Sweden

Camilla Widmark

Department of Forest Economics, Swedish University of Agricultural Sciences, SE-90183,

Umeå, Sweden and CERE - Centre for Environmental and Resource Economics.

[email protected]

Phone: +46 90 7868596

Fax: N/A

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mailto:[email protected]

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1 Abstract

2 This paper describes the development and implementation of a model to measure and compare

3 transaction costs in situations of multiple-land use, where interdependence prevails between the

4 agents – thus actions of one agent affects others. Transaction costs typically occur in situations

5 where limited resources are used by more than one agent and bargaining of the use is conducted

6 to mitigate conflict. The model of the paper is empirically tested on one such situation: forestry

7 and reindeer husbandry, which is pursued in northern Sweden where transaction costs occur in

8 common land use as a result of consultations. The results indicate that transaction costs are

9 unevenly distributed between the two agents, where reindeer husbandry carries the highest costs

10 resulting in uneven power relations. Transaction costs are driven by the presence of Land Use

11 Plans of reindeer husbandry, interestingly enough driving the costs in different directions for

12 the two agents. The model illustrates the elements of transaction costs in a common pool

13 resource situation, and the results are not only useful for this specific situation in policymaking,

14 but also to other similar situations.

15

16 Keywords: co-management, forest companies, Sami, Sami community, transaction costs

17

18

19

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20 Introduction

21 Natural resource use is often a source for environmental conflicts derived from the incompatible

22 interests of agents (Schmid 2002, German and Keeler 2010). This incompatible interest is often

23 connected to interdependence, that is, one agent’s choices restrict the remaining available

24 choices for others. Even more challenging are situations of weak or absent property rights,

25 typically common pool resource situations where tragedy of the commons may occur in which

26 a resource risks to become depleted. In these situations, especially together with

27 interdependence situations, governance is essential to be able to resolve or elevate conflicts and

28 avoid depletion of the resource (Hardin 1968, Ostrom 1990, Paavola and Adger 2005, Paavola

29 2007, German and Keeler 2010). A traditional and commonly used solution to these problems

30 of interdependence, however typically not very successful, is to make sure that property rights

31 are secured through privatisation, or through nationalisation of the natural resource (Ostrom

32 1990). However, a more successful way to resolve tragedy of commons problems and govern

33 a common is the creation of institutional solutions (Ostrom 1990, Paavola and Adger 2005,

34 Paavola 2007), especially through hybrid governance institutions where self-governance is

35 balanced with formal regulations (German and Keeler 2010).

36

37 The goal of such an institution is to achieve a Pareto-efficient solution, where all agents have

38 optimal welfare, i.e., Coase theorem (Coase 1960), which consequently renders low transaction

39 costs (Coase 1988, Inman and Rubinfeld 1997). Transaction costs are costs associated with

40 withholding property rights or costs associated with information, coordination, and

41 enforcement associated with a negotiation or agreement (Coase 1988, Bromely 1991, McCann

42 2004). Cooperative actions, including larger groups and collective action situations, are

43 expected to arise when agent collaborations are high and transaction costs are low (Coase 1988,

44 Dixit and Olson 2000). However, to achieve successful Coasian bargains and to minimise

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45 transaction costs, the cost of retrieving information regarding agent preferences should be low.

46 Additionally, the costs for negotiations should be low and agents have to agree upon how to

47 divide gains. Finally, costs for enforcement and monitoring have to be low (Inman and

48 Rubinfeld 1997).

49

50 In mainstream neoclassical economics, the focus is typically on studying the consequences of

51 institutional change, with little attention to underlying causes. However, understanding the

52 underlying factors influencing institutional change is an important step toward understanding

53 why some institutions fail while others succeed. This knowledge can be useful in the design of

54 more efficient and robust institutions (Bromely 1991, McCann 2004). A step in understanding

55 these underlying factors is to consider transaction costs involved in a governance institution

56 (Bromely 1991, Williamson 2000, Paavola and Adger 2005, McCann et al. 2005, Paavola

57 2007). This includes understanding the costs involved in the bargaining process, before, during,

58 and after the bargaining situation.

59

60 There are some studies of natural resources focused on the drivers of transaction costs in natural

61 resource management situations, like fisheries or agricultural land use (e.g., Falconer et al.

62 2001, Mburu et al. 2003, Paavola and Adger 2005, McCann et al. 2005, Adhikari and Lovett

63 2006, Paavola 2007, Rørstad et al. 2007, Kuperan and Abdullah 2008, Coggan et al. 2010, Vatn

64 2010, Mettepenningen et al. 2011, Enengel et al. 2011). However, few studies discuss

65 transaction costs related to forests (Zhang 2001, Meshack et al. 2006, Behera and Engel 2006,

66 Ray and Bhattacharya 2011). Most of these studies focus on discussing the drivers of

67 transaction costs in natural resource management, typically discussing the effects of transaction

68 costs for single user groups, in many cases without specifying the monetary value of transaction

69 costs. None of these studies relates to conflicting natural resource management, where a

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70 multiple-land use prevails in which two agents use the natural resource in parallel. This paper,

71 together with papers by Widmark and colleagues, contribute to the literature on bargaining

72 situations in common land use situations, explaining drivers of transaction costs (Widmark and

73 Sandström 2010, 2012, Widmark et al. 2013, Bostedt et al. 2015).

74

75 As an example of a multiple-land use bargaining situation to assist in developing a model for

76 transaction cost estimation, the uneasy relationship between forestry and reindeer husbandry in

77 northern Sweden is useful. Two agents — forest companies and Sami reindeer herders (an

78 indigenous people of Sweden) — use land in parallel. Forest companies typically harvest timber

79 while Sami use the land for grazing reindeer (Rangifer Tarandus Tarandus). Reindeer, a semi-

80 domesticated animal, graze over large areas, typically in the mountainous areas in the summer,

81 and in forests closer to the coast in the winter (Moen and Danell 2003, Kivinen et al. 2012).

82 Conflicts increased as forestry became mechanised and more industrialised starting the mid-

83 20th century (Widmark 2009). Land use conflicts occur as a result of the independent situation

84 – forestry’s and reindeer husbandry’s management affect the other agent negatively, as large-

85 scale forest companies are the owners of land, and small-scale reindeer herding companies have

86 usufructuary rights based upon immemorial rights (Widmark 2009, Widmark and Sandström

87 2010). In 1979, the Swedish government initiated an institutional solution to alleviate disputes,

88 by requiring mandatory consultations aiming at discussing land use management to allow for

89 identification of mechanisms to enable parallel land use, thereby reducing conflict and negative

90 effects on agents (Widmark 2009, Widmark and Sandström 2012, Widmark et al. 2013).

91 However, research indicates that consultations are not working as well as intended, as conflicts

92 are unresolved, negative effects are not internalised, and land use management is not ensuring

93 parallel land (Sandström et al. 2006, Sandström and Widmark 2007, Widmark 2009). One

94 particular issue identified as an obstacle to conflict resolution was the lack of understanding of

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95 the costs involved in consultations (Sandström et al. 2006). Earlier research has focused on

96 developing and measuring transaction costs for the individual agent (Widmark and Sandström

97 2010, 2012, Widmark et al. 2013, Bostedt et al. 2015). Therefore, the aim of this study is to a)

98 create a model of comprehensive transaction costs in a bargaining process involving conflicting

99 agents, and b) to understand the transaction costs involved in a bargaining process in a common

100 pool resource situation.

101

102 Case-study area and its actors

103

104 On about 50% (ca. 20.6 million hectares) of Sweden’s land area, reindeer husbandry is

105 permitted according to the law (RNL 1971) (see Fig. 1). Reindeer are migratory, typically

106 grazing in the boreal forests during winter grazing grounds and in mountainous regions during

107 the remainder of the year (year-around areas) (however, some reindeer groups are located in

108 the forest area year-around) (Moen and Danell 2003). Winter grazing, the most critical period

109 of food provision for reindeer, consists of 80% of mat-forming terrestrial lichen (mainly

110 Cladonia spp.) and arboreal lichens (mainly Bryoria spp.). For reindeer herding, access to

111 grazing land is critical, especially natural grazing and access to abundant lichen-rich areas.

112 Supplementary fodder is used sparsely when snow conditions are such that grazing is prevented.

113 It is costly and less efficient, as the high concentration of energy in lichens are difficult to match

114 by supplementary fodder (Widmark 2006, 2009, Kivinen et al. 2012). The ca. 250.000 reindeer

115 are owned and herded by ca. 4700 individual Sami reindeer herders, organised in 51 Sami

116 communities. More specifically, in 2017, there were a total number of 242,582 reindeer, divided

117 between Norrbotten 145,095 (60%); Västerbotten 52,565 (22%); and Jämtland 44,922 (18%)

118 regions. The upper limit number of reindeer in each Sami community is decided upon by the

119 County Administrative Board, based upon perceived grazing abilities and the size of the herd

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120 and whether it is rather constant over time; however, there are natural fluctuations mostly due

121 to grazing ability (Widmark, 2009).

122

123 The Sami community is both a geographical entity and economic organisation for reindeer

124 herding (see Fig. 1.) (Sametinget 2010). The main activity of the reindeer herding company is

125 to maximise meat production, given the approved herd size (Widmark 2009). Reindeer

126 husbandry is an exclusive right of the indigenous Sami people and is an important cultural

127 carrier of the Sami culture and the Sami identity (Bostedt et al. 2003, Danell 2004, Riseth 2006).

128

129 In the same area, forestry is practised by non-industrial private forest owners, small companies,

130 and four large-scale, land-owning companies. The four forest companies own 59% (ca. 9.7

131 million hectares) of the forest land in the region (Swedish Forestry Agency 2010). The forest

132 companies typically manage the forest for production of timber, pulpwood and additional

133 assortments, e.g., wood for bioenergy. The forest industry is an important employer in the

134 region, as well as constituting an important export industry.

135

136 Forest companies and reindeer herders use the forest resource simultaneously but for different

137 purposes and thus affect each other. Reindeer herding may cause negative effects on forestry

138 as reindeer may trample and cause damage to young forest stands, while timber harvesting (that

139 reduces the mature forests) has negative effects on reindeer grazing abilities, as natural grazing

140 in mature forests are essential for reindeer survival, especially during winter (e.g., Danell, 2004,

141 Widmark, 2009).

142

143

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144 Forest management and consultations

145 In 1979, the government initiated the first consultation process between forest companies and

146 Sami communities. This process was initially conducted in grazing areas where reindeer

147 husbandry was particularly strong year-round, thus excluding the important winter grazing

148 areas (SFA, 1979; §21). However, as the forest companies became certified by the FSC (Forest

149 Stewardship Council) certification standard, winter grazing areas were also included in the

150 consultation process (FSC 2016). Consultations are held prior to final harvesting, soil

151 scarification, fertilisation, and forest road construction. The law does not explicitly state that an

152 understanding or agreement has to be reached, but minutes from the meeting must be attached

153 to the application of the final harvest which is submitted to the Swedish Forestry Agency by

154 the forest company. These plans have to be submitted prior to the final harvest to enable the

155 Swedish Forestry Agency to control for consideration, for example, re-plantation plans and the

156 consideration of biodiversity and other values, such as reindeer husbandry (Widmark et al.

157 2013, Bostedt et al. 2015, SFA 1979; §30). As Sandström and Widmark (2007) showed,

158 consultations are best described as dialogue rather than partnerships with equal opportunities.

159 Furthermore, conflicts were mostly left unresolved after consultations. With the revision of the

160 FSC standard in 2014, the consultation process changed. Any consultation where consensus is

161 not reached results in a second consultation or a joint on-site inspection with the purpose of

162 deepening dialogue and further discussing the effects. If the conflict remains unresolved, the

163 parties may call for an outside mediator (Bostedt et al. 2015, FSC 2016). No studies of the

164 effect of the revised consultation system have been presented so far.

165

166 [figure 1 about here]

167

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168 Forest companies have been documenting knowledge about the forest resource (apart from

169 ground vegetation such as lichen) for an extended period of time. Before 2010–2014, reindeer

170 herders had not been systematically documenting grazing and migration patterns, and

171 information was traditionally spread by word-of-mouth as part of traditional knowledge. In

172 1995, the government initiated a project to map indigenous land use through a geographical

173 information system (GIS) method, resulting in the Land Use Plan for Reindeer Husbandry.

174 Generally, the Land Use Plan is only one example of indigenous mapping of natural resource

175 use among indigenous peoples in the world, and the aim is to improve the knowledge base,

176 assist in the management of resources, strengthen culture and secure tenure (McCann 2004,

177 Widmark and Sandström 2012, Bostedt et al. 2015). In the Land Use Plan, the mapping

178 includes strong information concerning grazing lands, lichen-rich areas, key areas (e.g., calving

179 land) and moving paths, and the initial aim was to use the Land Use Plan in consultations with

180 forest companies. Each Land Use Plan covers the geographical area of one Sami community

181 and may be used to integrate forest management plans into grazing management in order to

182 achieve an overall view of land use management. As of 2014, 49 out of the 51 Sami

183 communities had a working Land Use Plan (for further details on the development of Land Use

184 Plan, see Bostedt, et al. 2015).

185

186 Method

187

188 Common pool resources and the negative effects of natural resource use

189 An interaction between two agents, using the same resource, may be characterised as a common

190 pool resource (CPR) problem, as commercial use of the forest reduces the amount of available

191 lichen on which the reindeer husbandry is dependent on, which implies rivalry of land

192 (substractability). As both agents have the same right to use land without the option to exclude

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193 the other agent from use (excludability), a typical CPR situation prevails (Ostrom 1990,

194 Widmark 2009).

195

196 The interaction between agents in a common pool resource situation typically affects other

197 agents, either by affecting the each other’s choices (interdependence) or causing unintended

198 and uncompensated effects (externalities) (Pigou 1920, Coase 1960, Paavola and Adger 2005).

199 Since the early 1990s, a growing literature is studying natural resource management issues from

200 the angle of interdependence rather than externalities (Ostrom 1990, Keohane and Ostrom

201 1995, Paavola and Adger 2005, Paavola 2007). The reason for the preference of

202 interdependence in natural resource management is that it helps to understand the design and

203 function of institutions and institutional arrangements (Ostrom 1990, Paavola and Adger 2005,

204 Bostedt et al. 2015).

205

206 In the case of this paper, the goal of the institutional setting, namely the consultations, is to find

207 a balance between different interests (i.e., grazing and timber production). As an activity of one

208 agent affects the choices of the other, the situation may be defined as an interdependent one.

209 For instance, if the forest agent decides to final harvest one area, then grazing abilities will be

210 affected (Widmark 2009, Widmark and Sandström 2012, Bostedt et al. 2015).

211

212

213 Transaction costs and interdependence

214 The transaction cost theory originates from the assumption that information is costly to retrieve

215 (Dahlman 1979) and that institutions are incapable of resolving situations of interdependence

216 without negotiation costs, hence transaction costs (Williamson 1985, Paavola and Adger 2005).

217 Transaction costs may be defined in a variety of ways and is connected to the agents’ cost of

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218 defining, establishing and maintaining control of the resource (Alston et al. 1996, McCann et

219 al. 2005), hence decision-making related costs (Widmark and Sandström 2012, Bostedt et al.

220 2015), as well as costs related to gathering, sharing and possibly limiting other agent’s access

221 to information (Paavola and Adger 2005). In the reindeer-forestry situation, transaction costs

222 are associated with costs to withhold land use rights, realised through negotiations in

223 consultations (Widmark and Sandström 2012, Widmark et al. 2013, Bostedt et al. 2015).

224

225 Low transaction costs are considered a measure of the success of the institution, namely how

226 well the interdependence is handled by the institution (Ostrom 1990, Adhikari and Lovett 2006,

227 Ray and Bhattacharya 2011, Widmark and Sandström 2012). Further, the effect of transaction

228 costs should be equally distributed between the agents to create equality in the institutional

229 framework to promote efficiency striving toward Pareto-optimal situations (Coase 1960). The

230 ability of an institution to reduce agent transaction costs is dependent on the institutional

231 framework as well as the surrounding policy. Knowledge of the size and distribution of the

232 transaction costs are also helpful in policy making to address unfairness, redistribution and

233 policy implementation (Garrick et al. 2013). Individuals are seeking to improve welfare and

234 strengthen property rights but also to alter the institutional framework to further improve

235 welfare (North 1990, Hanna 1994, McCann et al. 2005, Widmark and Sandström 2012). To be

236 able to measure the success rate of an institution and to analyse the drivers of transaction costs,

237 each separate cost has to be identified (Bromely 1991, Williamson 2000, Paavola and Adger

238 2005, Paavola 2007, Widmark and Sandström 2012). However, a method to measure the

239 transaction costs in monetary terms in an institutional framework with parallel natural resource

240 use did not exist until recently, when a method was developed by Widmark and colleagues

241 (2015).

242

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243 A model of transaction costs

244 As Widmark and Sandström (2012), Widmark, et al. (2013) and Bostedt, et al. (2015) modelled,

245 transaction costs may be divided into ex ante and ex post transaction costs (see also Paavola

246 and Adger, 2005; Williamson, 1985). The ex ante costs consist of costs incurred by regulations

247 and institutional bodies to manage a natural resource, while ex post costs involve costs of

248 implementing and monitoring the arrangement. In the institutional arrangement—in this case,

249 consultations—the transaction costs involve the activities related to joint natural resource

250 management divided into four categories; information costs (I), collective planning costs (P),

251 collective decision-making costs (D), and operational costs (O) (Widmark and Sandström 2012,

252 Widmark et al. 2013, Bostedt et al. 2015) and can be expressed as:

253 (1)𝑇𝐶 = 𝑓(𝐼, 𝑃, 𝐷, 𝑂)

254 where

255 𝐼 = 𝑓(𝐾𝑜,𝐺𝑖)

256 𝑃 = 𝑓(𝑃𝑙)

257 𝐷 = 𝑓(𝐶𝑜,𝑉𝑖,𝐴𝑑𝑗)

258 𝑂 = 𝑓(𝑀𝑒𝑑,𝐸𝑣)

259

260 As Meshack et al. (2006) showed, co-management and land use management is a time-

261 consuming activity, thus proving to be an important source of transaction costs. For this reason,

262 the components of transaction costs (I, P, D, O) are a function of time spent in the different

263 activities; . As also seen in table 1, the information cost (I) is a function of time 𝐼, 𝑃, 𝐷 𝑂 = 𝑓 (𝑡)

264 spent in achieving knowledge of the agent’s own resource and of the other agent (Ko), as well

265 as a function of the time for gathering information (Gi). The collective planning costs (P)

266 constitute a function of the time spent in planning and coordinating land use management (Pl)

267 (to the other agent’s needs). These costs occur ex ante, before the decision-making situation.

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268 During and after the consultations, the decision-making cost (D) is a function of a number of

269 costs: the number of consultation meetings (meeting and travel time) (Co), the number of site

270 visits (field and travel time) (if applicable) (Vi), and the adjustment of management plans after

271 consultations (Adj). Lastly, the operational cost (O) is a function of conflict resolution in

272 mediation (Med), and monitoring and evaluating (Ev) land use management plans (see table 1).

273

274 [Table 1 about here]

275

276 The variables constituting the transaction costs are then further affected by asset specificity,

277 frequency and uncertainty, as outlined by Williamson (1985). Asset specificity deals with costs

278 related to the characteristics of the good, namely if it is a general good or a good that can be

279 used for one or a few situations. Frequency is related to how frequent meetings take place, and

280 uncertainty refers to the relationship and the ability to build trust. With the increased frequency

281 of meetings, trust is more likely to build (Williamson 1985, McCann 2004). This means that

282 apart from the four categories of transaction costs described above, the transaction costs are

283 also affected by causal factors. These causal factors (CF) are a function of independent or

284 indirect costs driving (both up and down) transaction costs; thus . The first 𝐶𝐹 = 𝑓(𝑃ℎ, 𝐼𝑓, 𝐸𝑥)

285 parameter—the independent physical factors—is related to the asset specificity in the model

286 and relates to the agent’s activity and relation to the natural resource. In this case, it is factors

287 like the number of reindeer, the geographical area involved in consultations (winter grazing

288 area or share of owned forest land situated in the reindeer grazing area), and the number of

289 agents (number of forest companies or number of Sami communities that hold consultations)

290 (Pf). The second factor — the indirect decision-making factor — refers to the indirect factors

291 affecting collective-decision making costs (If) which are factors related to the frequency of

292 meetings rather than time spent in the meetings, e.g., number of consultations or number of on-

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293 site inspections. Lastly, dealing with asset specificity are factors of extraordinary characteristics

294 of the planning of the natural resource use that may affect transaction costs, e.g., the presence

295 of GIS- based land use planning (Williamson 1985, Bostedt et al. 2015). The effect of these

296 variables may be difficult to value in monetary terms and is rather valued as drivers of

297 transaction costs, indicating if transaction costs may be pushed up or down by the presence of

298 these factors. For policy reasons, it is vital to not only understand the actual transaction costs,

299 but also to understand the effect of causal effects.

300

301 Following the framework developed by Bostedt et al. (2015) and the argumentation in Coggan

302 et al. (2013), consultations between reindeer husbandry and forestry are related to transaction

303 cost drivers. As consultations are related to specific and, each year, mostly different

304 geographical areas, generally the asset specificity and frequency are assumed to drive

305 transaction costs while the extraordinary factors are assumed to decrease transaction costs

306 (Bostedt et al. 2015). The independent physical prerequisite (Ph) of lichen depends on soil and

307 light conditions as well as knowledge and experience of forestry and reindeer husbandry on the

308 resource in management situations (Ph). Another independent physical asset specificity factor

309 for reindeer husbandry is the importance of lichen for winter grazing (Widmark 2009, Widmark

310 and Sandström 2012, Widmark et al. 2013, Bostedt et al. 2015). Additionally, the size of

311 reindeer herds are drivers of transaction costs, as the larger the herd, the larger the grazing area

312 required, thus increasing the need for spatial information. With the need for larger grazing areas

313 also follows potentially higher risks of conflicts over land use (McCann 2004, Widmark and

314 Sandström 2012, Widmark et al. 2013). The frequency of bargaining typically creates trust,

315 routines and processes implying that with increased frequency, there follows a lower cost per

316 bargaining situation (Williamson 1985, McCann 2004). As consultations are site-specific, the

317 frequency of consultations is a driver of transaction costs; thus, there is an increase in the

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318 transaction costs with the increasing number of consultations (If). However, the share of forest

319 owned by one forest company in a reindeer grazing area have opposite effect, thus reduce

320 transaction costs based on the assumption that the need for grazing areas can be satisfied in the

321 negotiations with the largest forest company (Bostedt et al. 2015; Widmark et al. 2013;

322 Widmark and Sandström 2012). The last part of the causal factors are the extraordinary factors

323 affecting the land use planning. In this case, the presence and use of the Land Use Plan in

324 consultations assume to decrease transaction costs as the information from the Land Use Plan

325 feeds information into the consultations and on-site inspections (Ex) (Widmark and Sandström

326 2012, Widmark et al. 2013, Bostedt et al. 2015).

327

328 The transaction costs of each agent can be aggregated by

329 (2)𝑇𝐶𝐹𝑖 = ∑𝑇

𝑡 = 0𝛽𝑡(𝐼𝑡 + 𝑃𝑡 + 𝐷𝑡 + 𝑂𝑡 + 𝐶𝐹𝑡)

330 𝑇𝐶𝑅𝑆𝐶𝑖 = ∑𝑇

𝑡 = 0𝛽𝑡(𝐼𝑡 + 𝑃𝑡 + 𝐷𝑡 + 𝑂𝑡 + 𝐶𝐹𝑡)

331 where

332 𝛽 = 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟

333 𝑡 = 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 (0 = 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑡𝑖𝑚𝑒, 𝑇 = 𝑙𝑎𝑠𝑡 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑)

334 F = forestry

335 RSC = reindeer husbandry

336

337 Finally, the sum of transaction costs is and may be used in smaller ∑𝑇𝑡 = 0𝑇𝐶 = ∑𝑇𝐶𝐹 + ∑𝑇𝐶𝑅𝑆𝐶

338 geographical entities or aggregated on the full reindeer grazing area.

339

340 Once transaction costs are categorised and measured, together with production costs, they can

341 be analysed to understand the economic impact of the institutional framework as well as

342 economic efficiency. Furthermore, the understanding of the drivers behind transaction costs can

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343 contribute to the analysis of institutional performance and suggestions for institutional and

344 policy improvements to alienating interdependence (McCann 2004).

345

346 Material

347

348 The idea is to combine a survey instrument and measurement methods of transaction costs for

349 both actors to survey the presence of transaction costs resulting from the common land use and

350 the interdependent situation. The survey instruments used by Widmark et al. (2013) and Bostedt

351 et al. (2015) was used to outline a combined model for both agents. Data was collected through

352 structured interviews (reindeer herders) and a structured questionnaire (district managers of

353 forest companies). The questions in the questionnaire and the interviews were exactly the same,

354 which allows the results to be directly comparable. Questions dealt with each of the steps in the

355 consultations process, based upon details provided by a previous study (Sandström et al. 2006),

356 with examples listed in table 1. The questions were divided into the four categories of

357 transaction costs identified in the method section.

358

359 Prior to interviews, questions were distributed via mail to the Sami community person

360 responsible for consultations (typically the head of the Sami Community). A small number of

361 the respondents preferred answering the paper version of the survey. The survey was carried

362 out during April to September 2011. In total, 24 of the 43 Sami communities participated in the

363 survey (response rate of 56%). In the sample, different geographical areas and different types

364 of reindeer husbandry management where represented (for more details, see Bostedt et al.

365 2015). The four forest companies active in the region answered the questionnaire from

366 November 2010 to January 2011. The respondents were district managers or the person that

367 conducted the consultations on behalf of the forest company. All forest company districts

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368 (n=35) participated in the study (rendering a response rate of 100%). Of the forest company

369 districts, a majority (68%) had mainly land within the reindeer grazing area (61-100%) while

370 15% of the districts had less than 20% reindeer grazing area within their district (typically forest

371 company districts closer to the coast or the southern part of the reindeer grazing area).

372 Furthermore, 47% of the forest company districts had overlapping land with two or more Sami

373 communities, leading to having more than one consultation. To preserve the anonymity of the

374 respondents, no individual forest company or Sami community is discussed in the paper.

375

376 As illustrated in the right column of table 1, the respondents were asked to estimate, on average,

377 time spent on different activities. The transaction costs were then calculated based upon ; 𝑡 ∗ 𝑤

378 where t is time and w is average salary after income taxes of a forest worker. This serves as a

379 proxy for both agent groups, as reindeer herders typically run small-scale firms but also engage

380 in temporary work in forestry. For the sake of comparability, the same average salary is used

381 for both agents. The assumption is based on opportunity cost, implying that if consultations did

382 not take place, the agents can do other tasks. The transaction costs included in this study are

383 directly related to consultations on forest land use, and they do not include other land uses, for

384 example, those associated with consultations on mining or siting of wind power plants.

385

386 Results

387 Consultation meetings

388 The case study shows that the mean number of consultations differ between the two agents, but

389 the same trend: more consultations are held in Västerbotten county (on average 6.6 for Sami

390 communities and 7.1 for forest companies), followed by Norrbotten (on average 5.9 for Sami

391 communities and 6.4 for forest company districts), and less consultations are held on average

392 in Jämtland county (4.25 for Sami community and 2.4 for forest company districts). Of the

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393 Sami communities, 45% participated in 3 to 5 consultations and 30% participated in 6 to 10.

394 For forest company districts, 71% participated in 1-5 consultations, 23% participated in 6-10,

395 and 6% participated in more than 10 consultations per year.

396

397 Transaction costs in forestry

398 According to the model (eq. 2.), the sum of transaction costs for a forest company district is on

399 average $2,189 USD* for forest companies however these vary between the different regions

400 and between different forest company districts, as shown in figure 2. The county with the

401 highest transaction costs is Norrbotten, in the northern part of the region, while Jämtland in the

402 south has the lowest transaction costs per forest company district on average. The distribution

403 of transaction costs between the categories is uneven, with a share of ex ante costs of 55% of

404 the total transaction costs and ex post transaction costs of 44%. Notable is that the fourth

405 category (operational costs) is zero, thus these costs are not noted by forest company districts.

406 As the standard deviations† suggest in table 2, transaction costs vary between forest company

407 districts, ranging from $86 USD to $8,261 USD.

408


410

411 The level of transaction costs varies between different forest company districts and the reason

412 might be found in the causal factors. As suggested in the theoretical section, plausible

413 explanations can be connected to asset specificity and frequency – the number of reindeer in

414 the county and number of consultations. The number of reindeer is a driver of transaction costs,

* 21 May 2018, exchange rate USD/SEK 8.76.

† Standard deviations in the paper are at 95 % level, if nothing else is indicated.

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415 as more reindeer in a grazing area potentially increases conflicts in negotiations as the need for

416 grazing area is higher compared to fewer animals. The frequency of consultations is also a

417 driver of transaction costs, as consultations are site-specific and special preparations for each

418 consultation increases transaction costs. However, these costs should be equally distributed, if

419 transaction costs are affected by asset specificity and frequency. Table 3 shows the mean total

420 transaction costs per thousand reindeer as well as the transaction costs per consultation. The

421 county with the highest number of reindeer (Norrbotten) has the lowest transaction cost per

422 thousand reindeer (with low standard deviation). Further, transaction costs adjusted for the

423 number of consultations held in each county is also unevenly distributed. Mean transaction

424 costs per consultation is highest in Jämtland and lowest in Norrbotten. The results suggest that

425 there is no economy of scale – the number of reindeer or higher frequency of consultations can

426 explain the difference between forest company districts and differences between counties. As

427 pointed out in the survey responses, as well as by Widmark et al. (2013), personal relationships

428 and local knowledge are important to create trust and mutual understandings in consultations.

429


431

432 Transaction costs in Sami communities

433 Following the model of transaction costs for reindeer husbandry, the mean transaction costs are

434 $4,089 USD per Sami community and year, as shown in table 4. The costs are not evenly

435 distributed between the categories – the ex ante transaction costs account for 67% of the total

436 transaction costs, while the ex post transaction costs account for 33%. Most transaction costs

437 refer to collective planning costs (54%) and the collective decision-making costs (30%), while

438 information costs (13%) and operational costs (3%) are lower.

439

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441

442 As the standard deviations suggest, there is a spread of transaction costs between the districts,

443 ranging from $660 USD to $15,715 USD. A few Sami communities stand out because of their

444 high transaction costs. The reason why, may be found in the causal factors, namely asset

445 specificity factors and frequency factors. More specifically, both the number of reindeer kept

446 in the Sami communities and the number of consultations carried out are considered drivers of

447 transaction costs. As table 5 shows, the transaction costs per consultation and transaction cost

448 per thousand reindeer do not show any explanation power of why transaction costs differ

449 between herding communities and between different geographical areas, illustrated by the high

450 standard deviations. Västerbotten, with the highest mean transaction costs ($5,941 USD), also

451 have the highest transaction cost per consultation ($900 USD) and the same county has the

452 highest mean transaction cost per thousand reindeer ($113 USD). The county with the lowest

453 average number of consultations—Jämtland—has the lowest transaction costs per consultations

454 ($45 USD). Norrbotten, the county with the most reindeer has the lowest mean transaction cost

455 per thousand reindeer ($33 USD).

456

457 [table 5 here]

458

459 As with the forest company districts, there is no economy of scale for Sami communities when

460 it comes to the number of reindeer and the average number of consultations, thus transaction

461 costs do not vary with these causal factors. The only indication the levels of transaction costs

462 have, apart from the fact that they vary significantly between Sami communities, is that the

463 mean level of transaction costs per consultation are high for Sami communities, especially in

464 Norrbotten and Västerbotten.

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465 Aggregated transaction costs of bargaining

466 As suggested in the theoretical section, the separate transaction costs of each agent are

467 aggregated on the county level, as the borders of the forest company districts and Sami

468 communities do not match. As shown in table 6, the aggregated transaction costs indicate that

469 the transaction costs sum up to $212,618 USD in total over one year. Of the total transaction

470 costs, the Sami community carries the highest share, 62.9%. The table also shows that most

471 transaction costs are spent on the ex ante costs, 64.3% in total. However, the share of the

472 individual cost categories is different between the Sami communities and the forest company

473 districts. Sami communities focus mainly on the collective planning phase, indicated by the

474 highest share of transaction costs, while forestry focuses mainly on the information collection

475 phase (see figure 3). When it comes to the transaction cost for the consultation meeting, the

476 share is almost equal between the two agents. In the survey, answers to questions on operational

477 costs, including conflict resolution and evaluation of land use, were typically not answered or

478 indicated to be zero. The interpretation at first would be that there is no conflict resolution,

479 indicating that the consultations resolve all conflicts. However, respondents explained that

480 conflict resolution is not given any attention, as the consultations have no legal power, rather,

481 they have an advisory role to forest management. The Swedish Forestry Act (SFA 1979:429,

482 30§) states that consideration has to be taken to e.g., reindeer husbandry. However, the law does

483 not provide details regarding consideration or sanctions if conflicts are unsolved. Furthermore,

484 Sandström and Widmark (2007) showed that although property rights are equal from a legal

485 perspective, the forest owner’s property rights are stronger in practice compared to the

486 usufructuary rights held by the Sami communities. This uneven power relation leads to conflicts

487 over land use management, however, there is no conflict resolution mechanism available.

488


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490 As figure 2 shows, the spread of transaction costs is high. Illustrating each surveyed district,

491 the spread of transaction costs ranges from $15,714 USD (reindeer) and $8,262 USD (forestry),

492 however, there are large local variations as well as variations between Sami communities and

493 between forest company districts. Interestingly, the transaction costs do not show the same

494 pattern between the two agents. For reindeer husbandry, the transaction costs are highest in

495 Norrbotten on average, while Västerbotten reveals the highest transaction costs for forestry

496 (figure 3).

497

498 Land Use Plan for reindeer husbandry

499 Table 7 depicts the mean transaction costs per district of forest companies or reindeer herders,

500 reflecting the results provided by previous studies. The mean transaction cost is higher for forest

501 companies if the Sami community has a Land Use Plan, and the same is true for Sami

502 communities – the transaction costs are higher if a Land Use Plan is present. For forestry,

503 information costs are higher compared to situations where there is no Land Use Plan; for Sami

504 communities, the costs of planning are higher with a Land Use Plan. However, as the standard

505 deviations indicate, there are variations in the material and the results have to be interpreted

506 with caution, as the sample in each group is small.

507

508 [table 7 about here]

509

510 These results, together with the regression analysis results from Widmark et al. (2013) and

511 Bostedt et al. (2015), indicate that the number of reindeer and number of consultations are both

512 drivers of transaction costs. However, the regression analysis reports heteroskedasticity, thus

513 variations in the data set are unexplained. This means that two of the causal factors – the number

514 of reindeer and number of consultations, are drivers of transaction costs for both agents.

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515 The third and last category of causal factors that may drive transaction costs are the presences

516 of a Land Use Plan in the Sami community. The Land Use Plan is used for improved

517 information on reindeer husbandry, grazing, moving paths and sensitive areas. In the forest

518 company district, the presence of the Land Use Plan decreases the costs for the forest company

519 district. In regression analyses, the results indicate that transaction costs are pushed down in

520 forest company districts by increasing the number of Sami communities in the district that use

521 the Land Use Plan. The hypothesis proposed is that Sami communities that use the Land Use

522 Plan probably are more informed before consultations and are more involved in discussions on

523 land use management during consultations (Widmark et al. 2013). This is only true if

524 information from the Land Use Plan is shared with forest companies. Sandström et al. (2006)

525 also suggest that costs can potentially decrease if a priori planning is avoided. On the contrary,

526 the results in this study, as well as previous studies, show that forest company districts are more

527 inclined to collect information and plan ahead of consultation meetings, most likely acting on

528 information given in the Land Use Plan, that is, if those are shared with the forest company.

529 For this reason, Sami communities are reluctant to share the Land Use Plan to avoid locking

530 negotiation positions in consultations (Widmark et al. 2013).

531

532 For Sami communities that have a Land Use Plan, Bostedt et al. (2015) showed that transaction

533 costs increased with the presence of the Land Use Plancompared to those Sami communities

534 that did not have a Land Use Plan. There is an indirect effect of the GIS-based land use plan,

535 namely that the longer a Sami community have had a Land Use Plan, the greater the chance the

536 Sami community becomes more involved in consultations, leading to a higher degree of on-site

537 inspections, thus, increasing transaction costs (Bostedt et al. 2015).

538

539

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540 Concluding discussion

541

542 The model developed in this paper aims at clarifying what types of costs are involved in a

543 bargaining situation, especially in conflicting land use. The model includes only those costs

544 related to the relationship in the bargaining situation, excluding other costs such as costs for

545 production loss. The aim of the model is to understand the components and drivers of costs

546 related to bargaining on land use. Further, the model also assists policymakers to understand

547 differences in goals of different agents engaged in bargaining situations. Moreover, the model

548 may also be used to understand the effects of policy changes affecting either agent taking part

549 in negotiations. The novelty of this paper, in comparison with Widmark et al. (2013) and

550 Bostedt et al. (2015), is the development of the model to include both agents as well as all

551 potential costs affecting transaction costs, both direct and indirect.

552

553 Results indicate that the transaction costs are unevenly distributed between counties, and

554 between reindeer husbandry and forestry districts. In general, the reindeer husbandry carries

555 higher transaction costs per district while forest company districts carry lower transaction costs,

556 but with great variations between different counties. The reason for this can only be speculated

557 on. The uneven power relationship, shown by Sandström and Widmark (2007), is most likely

558 one of the main reasons for the uneven transaction costs between the agents, which affects the

559 bargaining situation. Furthermore, the Swedish Forestry Act does not detail forestry’s

560 consideration of reindeer husbandry or how results from consultations should be accounted for.

561 With the revision of FSC in 2014, however, the consultation process was altered, focusing more

562 on conflict resolution. Sami communities are probably investing time and effort in planning for

563 and participating in consultations to improve their negotiation power, as this is their only means

564 of being able to affect land use management. Further,as Sandström et al. (2006) discussed, the

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565 idea of consultations varies greatly between forest company districts. Some districts consider

566 consultations as informative meetings in an office, while others devote time and resources to

567 detailed consultations.

568

569 Another argument for reindeer herders to engage in consultations, disregarding the high

570 transaction costs, is not participating in consultations regardless of the weaker power, is that

571 most of the Sami reindeer herders’ livelihoods depend on the profit of meat production. The

572 option of providing the reindeer with supplementary fodder is expensive and not natural to the

573 semi-domesticated reindeer. Furthermore, as reindeer husbandry is a cultural carrier of the Sami

574 culture, the value of reindeer to the Sami society is invaluable.

575

576 The categories of transaction costs are different between the two agents. On average, the Sami

577 communities use most resources on planning before consultations, while on average, forestry

578 uses most resources to seek information. Both agents use low or no resources to cover

579 operational costs, namely conflict resolution and monitoring and evaluation of land use. This

580 result implies that both agents focus on the preparations before consultations, which is not

581 surprising. However, what is surprising is that different parts of the preparations are important

582 to different agents. Since the data for this study were collected, the certification scheme has

583 changed, including conflict resolution mechanisms, which most likely would add operational

584 transaction costs.

585

586 Besides the direct transaction costs, indicated in the model’s first four parts referring to the

587 transaction cost categories (information, collective planning, collective decision-making, and

588 operational costs), the causal factors turn out to be important drivers of transaction costs for

589 both agents. As expected, the number of reindeer, as well as the number of consultations and/or

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590 on-site inspections, are strong drivers of transaction costs. The fact that the presence of a Land

591 Use Plan is also a driver of transaction costs does not come as a surprise. However, the fact that

592 the transaction costs are increasing for both agents is unexpected. With the Land Use Plan

593 comes more knowledge on reindeer husbandry and, theoretically, information that is easily

594 accessible should lead to lower transaction costs. Thus, the time to look for information

595 decreases as the Land Use Plan makes information accessible. However, transaction costs are

596 higher for both forestry and reindeer husbandry in the case where a Land Use Plan is present.

597 For forestry, the time used to find information has increased, thus increasing transaction costs.

598 Further, as Widmark et al. (2013) showed, the forest companies also tend to make more detailed

599 plans before consultations, acting upon the increased amount of information gained from the

600 Land Use Plan. Akin to a theoretical game situation, the aim of forestry may be to strengthen

601 positions in the bargaining situation. But it may also be that forestry acts upon the expanded

602 knowledge base, trying to consider the needs of reindeer husbandry already in a priori planning.

603

604 For Sami communities, the results indicate that more time is devoted to planning before

605 consultations, as the transaction costs are the highest category out of the four and the plan is

606 used to feed information into consultations. The presence of a plan is also a driver of on-site

607 inspections, most likely because the reindeer herder has a more informed situation on the land

608 in question during consultations and has more arguments for why on-site inspection is needed.

609 Even though implementing a Land Use Plan is costly and time-consuming, to date, most

610 reindeer herders have implemented a Land Use Plan. The reason is most likely a strong belief

611 that the unequal power relationship between forestry and reindeer herders would alter following

612 reduced transaction costs, as bargaining power is strengthened upon a more equal knowledge

613 base to forestry. Further, the Sami communities most likely engage in LAND USE PLAN

614 (disregarding the fact that transaction costs become higher) since they value negotiation power

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615 more than lower transaction costs. Interestingly, today, most Sami communities have an active

616 Land Use Plan, which means that the Sami communities choose to carry transaction costs

617 potentially to gain more power in consultations. Also, traditionally, knowledge on the reindeer

618 grazing areas have been passed on from generation to generation within the separate reindeer

619 herding company. By digitalising the land-use maps, more knowledge becomes available to all

620 within the Sami community and covers larger geographical areas (not only the individual

621 smaller grazing group). This makes the coordination of land use easier within the Sami

622 community, thus improving efficiency within the Sami community.

623

624 This interdependent situation causes conflicting land use and, as a result of this study, shows

625 costly negotiations. The forest is an important contributor to the Swedish economy while

626 reindeer husbandry is an important and strong culture carrier for the indigenous Sami culture.

627 As each agent is causing the other agent negative effects, the goal of transaction costs would be

628 to minimise the costs; however, as negotiations have to take place as a means of conflict

629 resolution, transaction costs should at least be evenly distributed between the two agent groups

630 to ensure efficient institutional arrangement in order to achieve a Pareto-optimal solution. The

631 knowledge of transaction costs and the distribution between the two agents may be useful to

632 further understand the institutional arrangement and assist in resolving future land use conflicts.

633 Moreover, the model outlined in this paper may be useful in other multiple-land use situations,

634 especially where there are conflicting interests between agents.

635

636 Acknowledgement

637 The Swedish Research Council FORMAS and EFINORD (Northern Regional Office of

638 European Forest Institute) financed this study. The author is grateful for comments and

639 suggestions during the presentation of early versions of this paper at the ISSRM conference in

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640 Umeå, June 2017, as well as by two anonymous reviewers. The author is also very grateful for

641 the time and effort of the representatives of the Sami communities as well as the forest

642 companies who participated in the survey.

643

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770 In Economics, Ethics, and Environmental Policy: Contested Choices. Edited by J.

771 Bromley, D. W; Paavola. Blackwell, Malden, MA. pp. 133–147.

772 SFA. 1979. Swedish forestry act [in Swedish Skogsvårdslagen]. In Swedish Forestry Act [in

773 Swedish: Skogsvårdslagen]. Available from

774 http://www.svo.se/episerver4/templates/SNormalPage.aspx?id=12677 [accessed 8

775 November 2010].

776 Swedish Forestry Agency. 2010. Statistical yearbook of forestry. Available from

777 http://www.svo.se/episerver4/templates/SFileListing.aspx?id=16863 [accessed 1

778 November 2010].

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779 Vatn, A. 2010. An institutional analysis of payments for environmental services. Ecol. Econ.

780 69(6): 1245–1252. Elsevier. doi:10.1016/J.ECOLECON.2009.11.018.

781 Widmark, C. 2006. Forestry and reindeer husbandry in Sweden – the development of a land use

782 conflict. Rangifer 26(2): 43–54.

783 Widmark, C. 2009. Management of multiple-use commons- focusing on land use for forestry

784 and reindeer husbandry in northern Sweden. Swedish University of Agricultural Sciences,

785 Umeå.

786 Widmark, C., Bostedt, G., Andersson, M., and Sandström, C. 2013. Measuring Transaction

787 Costs Incurred by Landowners in Multiple-use Situations. Land use policy: 677–684.

788 Widmark, C., and Sandström, C. 2010. Interdependence and transaction costs of institutional

789 change in mulitple-use commons. Work. Rep.

790 Widmark, C., and Sandström, C. 2012. Interdependence and Transaction costs of Institutional

791 Change in Multiple Use Commons. J. Environ. policy Plan. 14(4): 428–49.

792 Williamson, O.E. 1985. The economic Institutions of Capitalism: Firms, Markets, Relational

793 Contracting. Free Press, New York.

794 Williamson, O.E. 2000. The new institutional economics: taking stock, looking ahead. J. Econ.

795 Lit. 38(3): 595–613. JSTOR.

796 Zhang, Y. 2001. Economics of transaction costs saving forestry. Ecol. Econ. 36(2): 197–204.

797 Elsevier. doi:10.1016/S0921-8009(00)00228-7.

798

799

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Table 1. Transaction cost model including examples of survey questions

Transaction cost category Examples of survey questions

(I)

Information costs

Knowledge of the resource (K) How much time is spent on education and training on

forestry issues?

Knowledge of the users (K) How much time is spent gathering information on forestry

companies?

Gathering of information (Gi) How much time is spent preparing for the consultations

(e.g., planning, collecting/studying maps, etc.)?

(P)

Collective

planning costs

Planning and coordinating land use (Pl)

How much time is spent on planning and coordinating

land use to accommodate the needs of forestry

companies?

(D) Collective

decision-making

costs

Consultations and adjustment of

management plans (Co)

How much time is spent on the actual consultations, including travel time and time spent drawing up and

adjusting management plans as agreed to with the other

party?

How many consultations are conducted?

Site visits (Vi)

How much time is spent (including travel time, etc.) on any site visits that may be necessary in the course of

adjusting management plans? How many site visits are

needed?

(O)

Operational costs

Conflict resolution (Med)

How much time and money is spent on conflict resolution?

Monitoring and evaluating land use How much time is spent monitoring and evaluating land

use?

Source: Bostedt et al., 2015; Widmark et al., 2013; Widmark and Sandström, 2012.

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Table 2. Mean transaction costs forest company districts

Information cost

Collective planning costs

Collective decsion-making costs

Operational Costs*

Total transaction costs

(USD) Mean Std Mean Std Mean Std Mean Std Mean Std

Norrbotten 2198 2387 85 117 1459 974 0 0 3742 3144

Västerbotten 1008 865 97 99 1516 1577 0 0 2621 2162

Jämtland 924 1657 99 139 540 433 0 0 1563 2044

All districts 1127 1596 96 122 966 1074 0 0 2189 2315

* Note: No operational costs were indicated by the forest company districts; n=35

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Table 3. Transaction costs of forest company districts per reindeer and per consultation

Total transaction cost

per 1000 reindeer

Total transaction costs per

consultation

(USD) Mean Std

Mean Std

Norrbotten 25,79 21,67

584,73 491,26

Västerbotten 49,87 41,13

369,65 304,91

Jämtland 34,80 45,50

665,30 869,71

n=35

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Table 4. Average transaction costs of Sami communities

Information

costs

Collective planning

costs

Collective

decsions-making

costs Operation costs

Total transaction

costs

(USD) Mean Std Mean Std Mean Std Mean Std Mean Std

Norrbotten 575 1273 2844 3943 1170 791 154 175 4743 4513

Västerbotten 785 1408 2795 980 2191 766 170 208 5941 2593

Jämtland 272 339 985 1345 739 535 35 54 2031 1507

All districts 518 1060 2214 2875 1239 865 118 159 4089 3625

n=24

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Table 5. Sami community’s average transaction cost per consultation and per thousand

reindeer

Transaction cost per

consulation

Transaction cost per

thousand reindeer

(USD) Mean Std Mean Std

Norrbotten 803,9 765,0 32,7 31,1

Västerbotten 900,1 392,9 113,0 49,3

Jämtland 478,0 354,7 45,2 33,6

All districts 715,3 591,9 53,6 46,8

n=24

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Table 6. Aggregated transaction costs distribution in total over all districts

Sami

communities*

Forest company

districts**

Total transaction

costs

USD

Share of

catagory

cost USD

Share of

catagory

cost USD

Share

of total

cost

Information cost 17 221 29,8% 40 565 70,2% 57 786 27,2%

Collective planning cost 75 528 95,6% 3 472 4,4% 79 000 37,2%

Collective decsion-making cost 37 286 51,7% 34 777 48,3% 72 063 34,0%

Operational cost 2 826 100,0% 0 0,0% 2 826 1,3%

Total 133 805 62,9% 78 813 37,1% 212 618

*n=24, **n=35

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Table 7. Mean transaction costs in forestry and Sami communities with or without the

presence of Land use plan for reindeer husbandry

Information

cost

Collective

planning costs

Collective decision-making

costs

Operational

costs

Total transaction

costs

Mean Std Mean Std Mean Std Mean Std Mean Std

Forestry* RBP 1355 1659 121 122 979 616 0 0 2454 2170

No RBP 872 1531 69 119 952 1448 0 0 1894 2500

Reindeer

**

With RBP 574 1127 2506 3549 1443 853 144 170 4667 4051

Without RBP 440 1012 1805 1618 954 839 81 143 3279 2937

*n=30; ** n= 18

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Figure 2. Transaction costs per forest company districts and per Sami communities

Norrbotten

Västerbotten

Jämtland

Sami community Forest company district

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Figure 3. Mean transaction costs distribution between transaction cost categories and counties

for individual agents

0

10000

20000

30000

40000

50000

60000

70000

80000

Reindeer Forestry Reindeer Forestry Reindeer Forestry Reindeer Forestry

Norrbotten

Västerbotten

Jämtland

Information Collective planning

cost

Collective decision-

making costs

Operational

cost

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canadian journal of forest research126 husbandry is an exclusive right of the indigenous sami people...

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