There is a limited understanding of the conditions under which payments for ecosystem services (PES) programmes achieve improvements in ecosystem service (ES) flows, enhance natural resource sustainability or foster sustainable livelihoods. We used a capital asset framework to evaluate PES programmes in terms of their social, environmental, economic and institutional outcomes, focusing on efficiency, effectiveness and equity trade-offs. We found that PES schemes can provide positive conservation and development outcomes with respect to livelihoods, land-use change, household and community incomes, and governance. However, programmes differ with regards to contract agreements, payment modes, and compliance, and have diverse cross-sector institutional arrangements that remain primarily state-structured and external donor-financed. There is a consistent lack of focus on evaluating and fostering human, social and institutional capital. This reflects general inattention to how PES programmes consider the causal links between ES and outcomes. To enhance ES production and PES scheme accessibility and participation, we recommend strengthening the linkages between ES production and land-use practices, boosting private and voluntary sector involvement, encouraging property rights and tenure reform, improving financial viability, and adequately accounting for the distribution of programme costs and benefits among participants.
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