9310696 SANTOPIETRO Debt for nature swaps are being used by private international conservation non governmental organizations as a means of increasing the purchasing power of the financial resources they devote to the preservation of endangered areas around the world. Preliminary research suggests that the decision making of managers in allocating funds among countries and projects has been heavily influenced by the legal costs of the transactions. Legal costs divert a sponsor's funds away from conservation programs and thereby reduce the net benefit of the swap. Differences in legal costs among countries can also bias the selection of sites, as managers seek to develop programs where legal costs are lower. Economic theory predicts that changes in legal structures will be brought about by the activities of individuals seeking efficiency gains when legal costs of economic activities are reduced. The objective of this project is to establish a base of knowledge about how national legal institutions affect the transaction costs of debt for nature swaps and how these institutions are affected by the potential for efficiency gains from changes in the legal system. This planning grant will support preliminary data collection in three neighboring South American countries Argentina, Chile and Paraguay. The data collection will include interviews with participants in the debt for nature process, both in government and in non governmental organizations. ***
