A vast number of people in developing countries depend on the natural environment for their livelihoods - on farmland or forests, wetlands or coastal areas. For these people, the environment is much more than a source of recreation - it is the basis of the economy. But poorly functioning markets, incomplete property rights, and misguided policies can drive people's behaviour in ways that are rational in the short term or from an individual's point of view, but harmful to the environment and future generations. Economics has much to offer in understanding and influencing this behaviour. It also