Mechanisms Linking Environmental Economics Crossover Access to Household Welfare in Kenya: Multilevel Causal Mediation Analysis

Environmental economics crossover interventions, which integrate market-based instruments with community governance, are increasingly promoted in Kenyan drylands, yet evidence on their welfare effects remains largely associational. The proposed framework distinguishes three mediators: livelihood diversification, collective resource management capacity, and household investment security, each operating at different levels of social organisation. Methodologically, the article addresses the identification challenges posed by interference between households, non-random programme placement, and the hierarchical structure of common-pool resource governance. A causal mediation model with sensitivity analysis is specified to estimate natural direct and indirect effects under sequential ignorability, with design-based strategies proposed to strengthen the plausibility of this assumption. The analysis implies that welfare gains from crossover access depend less on the transfer of property rights per se than on whether institutional complementarities align to reduce transaction costs and stabilise expectations.