Effects of Community Perceptions and Institutional Capacity on Smallholder Farmers’ Responses to Water Scarcity: Evidence from Arid Northwestern China

Community contextual factors including community perceptions and institutional capacity are among the key determinants in community-based water resource management. The Institutional Analysis and Development (IAD) framework proposed by Ostrom is commonly employed to examine the outcome of common-pool resource management including water resources. However, community perceptions typically examined in behavioral economics and comparative community analysis literature are rarely incorporated in institutional analysis studies. This study draws on the IAD framework to investigate smallholder farmer communities’ responses to water scarcity in arid northwestern China. Adopting alternating multiple regression and multivariate regression models, this study conducts an empirical analysis using farmer survey data. The results show that the perceptions of water scarcity promote community actions in coping with water shortage. The perception of production risks encourages overall community responses, as well as farming- and irrigation-related responses. Communities with a stronger institutional enforcement are more responsive in taking farming-, irrigation-, and infrastructure-related actions, as well as having better overall responses. The analysis also shows that community interactional capacities and socio-economic factors may influence community actions to mitigate and adapt to adverse effects of local water scarcity. Our findings provide insights for understanding social and institutional aspects of rural farming communities toward sustainable response decisions to overcome water scarcity challenges.