Property Rights and Government Involvement in Market-Like Biodiversity Conservation: An Empirical Analysis of Bioprospecting

Abstract

The Convention on Biological Diversity provides a framework for using market contracts to link mostly Northern ex situ genetic resource demanders with mostly Southern in situ holders of genetic resources. In this chapter, we explore the associated governance challenge of reconciling local and global conservation incentives in the specific case of bioprospecting. The specific focus is on contractual hazard in such projects. Based on new institutional economics, we derive that CBD, via two types of government involvement, has increased rather than ameliorated contractual hazard and might have had a negative effect on bioprospecting project outcomes. Empirical analysis of bioprospecting contracts provides tentative support for this hypothesis, which should have implications for the design of governance mechanisms for genetic resources management.