INTRODUCTION

When passed in 1973, few lawmakers anticipated the firestorms that would surround the Endangered Species Act (ESA). The ESA epitomizes the classic quandary of diffuse social benefits and concentrated private costs. About half of the listed endangered species have 80 percent of their habitat on private land (see Brown and Shogren 1998; Innes, Polasky, and Tschirhart 1998), and many landowners complain that the costs of complying with the ESA are too great.

The lack of satisfactory answers to questions about fair compensation to landowners have helped stall the reauthorization of ESA since 1992. For example, the proposed listing of the Black-Tailed Prairie Dog as a “threatened species” typifies the controversy over how best to protect species at risk on private land. Environmentalists and biologists argue the prairie dog is a keystone species in Great Plains ecosystems. Prairie dogs provide prey for various species of raptors and black-footed ferrets, and they supply habitat for burrowing owls, spotted salamander, and mountain plover. Prairie dogs rework the soil to provide nutrients for plant growth of benefit to grazing animals (Whicker and Detling 1988).

But historically, ranchers and government agencies in many Western states like Wyoming and Montana have considered the prairie dog a pest. Many people believe that prairie dogs compete for livestock forage, create livestock hazards with their burrows, and increase soil erosion. For these reasons, ranchers and government agents have systematically reduced their populations.