Trust, Repeated Interactions, and User Group Disturbances in Common Property Irrigation
Abstract: Common-pool resources as common property are no longer assumed to be destined to fail, but success is not inevitable. Trust and social capital have been identified as important factors in fostering cooperation, as they substitute for costly formal monitoring and enforcement of rules. This has been confirmed by both theory and empirics. However, the empirical research often is limited to cross-sectional analysis, using heterogeneity as proxies for trust, while theory emphasizes the repeated interactions of individuals. Additionally, given the myriad of variables identified in social-ecological systems to impact outcomes, the extant cross-sectional analysis likely suffers from significant omitted variable bias (OVB). I address both issues by focusing on trust as developed through repeated interactions while correcting for a large portion of the OVB problem. I construct panel data of 51 communal irrigation systems (acequias) over a 25 year period (1984-2008) located in Taos Valley, New Mexico. Having survived in the region for 150-250 years, the acequias have recently faced a new disturbance, undergoing a significant amount of turnover in the user group. This provides variation in trust developed through direct repeated interaction. Combining satellite imagery data, providing a measure of average agricultural production for each acequia each year, with user group characteristics constructed from New Mexico water right records, I use econometrics to explore the impact of new users. The use of panel data allows the inclusion of fixed effects, controlling for a number of unobserved variables which may be related to both turnover and agriculture. The results indicate that the systems are robust to the disturbance of new users, though smaller user groups struggle when they are subject to a large shock. The results also confirm the presence of OVB, as cross-sectional analysis here overstates the magnitude of the impact.
