Why do payments for watershed services emerge? A cross-country analysis of adoption contexts

Payments for watershed services (PWS) are an increasingly popular tool for watershed management, also in the Southern Hemisphere. However, the degree of PWS adoption varies across these countries: while frequently represented in Latin America, water-related payment schemes do not exist in large parts of Africa and Asia. The causes for these adoption differences have so far been little discussed. Here we address this knowledge gap with a quantitative cross-national assessment of factors influencing the decision to adopt PWS schemes across tropical countries. Based on hypotheses from the literature, we construct a logistic regression model, testing the explanatory power of various economic, institutional, and physical-geographic variables on PWS adoption. We show that especially factors associated with a country’s topography, hydrology, demographics, and institutions significantly influence the probability of PWS adoption. Our analysis of the de facto framework conditions for PWS adoption also has repercussion for where donor investments in PWS would most likely pay off.