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Abstract
Using the case of the semi-arid zone of Southern Sri Lanka as an example, the
paper shows that crop damages caused by grazing livestock can constitute an important
obstacle to the adoption of available technologies for more sustainable land use. The
paper considers crop damages as an externality problem and shows that the classical
solutions to externalities—the neo-liberal, the interventionist solution and the
communitarian solution—cannot be applied in the Sri Lankan case due to market failure,
government failure and “community failure.” The paper discusses collective action and
bargaining between organized interest groups as an alternative solution and analyses the
conditions which make such a solution work. The paper concludes that - in the Sri
Lankan case - a decentralized system of government, a preferential voting system creating
incentives for politicians, an institutionalized negotiation platform, and the facilitating
role of intermediaries favored this solution.