Opportunities and constraints of adopting market governance in protected areas in Central and Eastern Europe

This article analyses the transition from the traditional hierarchical governance of natural resources in Central and Eastern Europe towards the new forms of market governance of protected areas, including the introduction of fees and compensation. Our conceptual framework suggests that markets can be effective in governing transactions that involve low asset specificity and low frequency of disturbances. However, the introduction of markets should be accompanied by appropriate rules of market organization that particularly regulate their monitoring and impose sanctions in cases of mismanagement. The analysis of market governance in Poland, the Czech Republic and Slovakia reveals that in the face of decreasing funding for biodiversity protection and state budgetary problems, markets are more a necessity than a means to improve resource management. Although markets should complement rather than substitute traditional forms of governance, for certain types of transactions, markets are useful. They can be effectively implemented, provided that property rights are recognized and legal settings that regulate the monitoring and enforcement of market rules are set up.