Many authors attribute much resource degradation in developing rural areas (DRAs) to market failure and policy failure – failure, in each case, to “reflect environmental values.” Other authors attribute much resource degradation to incorrect domestic policies affecting relative prices. This chapter suggests, instead, that most resource degradation in DRAs responds to the success of domestic markets and policies. They succeed in communicating to rationally maximizing agents (households, firms, managers of common property) that changes in prices (especially real interest rates) and in technical options increasingly favor accelerated resource degradation.

According to the text, much of natural resource degradation in developing rural areas (DRAs) has been (or can be) attributed to:

Item 4 - the failure of domestic markets and policies to inform decision makers about relevant changes in prices and in technical options.