Payment for Environmental Services and Other Institutions for Protecting Drinking Water in Eastern Costa Rica

Communities across the globe increasingly confront environmental and natural resource management decisions that require expenditures to protect and conserve ecosystems. These decisions typically require consideration of bio-physical, political, economic, and other factors. Institutional economic thinking and analysis provide a framework for assessing and understanding the relative benefits of alternative institutions for managing environmental and natural resources. Using an institutional economic analysis, this chapter provides an evaluation of two alternative policy instruments - a local payment for environmental services scheme and a national watershed conservation tax - for protecting drinking water in eastern Costa Rica