Interest-Based Negotiation over Natural Resources: Experimental Evidence from Liberia

About this event

Over the last two decades, developing countries have seen a sharp increase in external demand for land and other natural resources. Despite hopes that these outside investments would spur local development, host communities often feel short-changed by these deals, which some describe as “land grabs.” We experimentally study whether an interest-based negotiation (IBN) training for community leaders in Liberia improves their ability to realize beneficial agreements and forego detrimental deals, related to their land and forests. In incentivized simulations, we find that trainees are 27% more likely to reach a profitable agreement, and when they conclude deals, their payoffs are 37% larger. An exploratory analysis finds a reduction in the exploitation of forestland in trainees’ communities. Our mediation analysis and structural estimates both indicate that the treatment increases trainees’ capacity to identify positive-sum agreements and, to a lesser extent, enables them to better appraise their outside option and walk away from detrimental deals. We find important variation across sub-groups, which indicates that the training benefits individuals with greater access to education and land. We discuss how IBN trainings should be amended to avoid reinforcing these inequalities.