Cooperation in watershed management: A field experiment on location, trust, and enforcement

We test the effects of location, trust, and enforcement on cooperation between upstream and downstream farmers in an Ethiopian watershed, where the former cause negative externalities to the latter due to unsustainable farming practices. We apply a standard trust game in the field with three treatments that allow us to relate our experimental results to actual soil conservation investments. We show that observed levels of trust, a measure of the encompassing concept of social capital, are positively related to such investments at the individual level. Trust itself is sensitive to the relative location of trustor and trustee in the game. Trust is not, however, sensitive to an enforcement intervention designed to raise investments in the trust game. Framing the game in its actual context of soil conservation investments reduces observed levels of trust.