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Corruption and forest concessions

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  • Amacher, Gregory S.
  • Ollikainen, Markku
  • Koskela, Erkki

Abstract

We examine how corruption impacts a central government's application of concession policy instruments consisting of royalty rates, concession size, environmentally sensitive logging levels, and enforcement. Harvesters have incentives to illegally log by taking more volume than is allowed, high grading through removal of only the highest valued and best formed trees, and shirking environmentally sensitive logging requirements, all of which reduce public goods produced from native tropical forests. Corruption is introduced through logging inspectors who can be bribed by harvesters to avoid fines associated with illegal logging. Both the theory and a simulation are used to compare policy design under corruption and no corruption.

Suggested Citation

  • Amacher, Gregory S. & Ollikainen, Markku & Koskela, Erkki, 2012. "Corruption and forest concessions," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 92-104.
    • Handle: RePEc:eee:jeeman:v:63:y:2012:i:1:p:92-104
    DOI: 10.1016/j.jeem.2011.05.007
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    Cited by:

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    3. Adeline-Cristina Cozma & Corina-Narcisa (Bodescu) Cotoc & Viorela Ligia Vaidean & Monica Violeta Achim, 2021. "Corruption, Shadow Economy and Deforestation: Friends or Strangers?," Risks, MDPI, vol. 9(9), pages 1-21, August.
    4. Stefan Borsky & Esther Blanco, 2014. "Setting one voluntary standard in a heterogeneous Europe - EMAS, corruption and stringency of environmental regulations," Working Papers 2014-29, Faculty of Economics and Statistics, Universität Innsbruck.
    5. Christopher Costello & Nicolas Querou & Agnès Tomini, 2014. "Spatial concessions with limited tenure," Post-Print hal-01123392, HAL.
    6. Chenyang Xu & Klaas van’t Veld, 2020. "Team Inspection in the Management of Common-Pool Resources When Corruption is Present," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 553-584, March.
    7. Glöckner, Andreas & Kube, Sebastian & Nicklisch, Andreas, 2014. "The joint benefits of observed and unobserved social sanction," WiSo-HH Working Paper Series 13, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    8. Suzi C. Kerr, 2013. "The Economics of International Policy Agreements to Reduce Emissions from Deforestation and Degradation," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 47-66, January.
    9. Cobourn, Kelly M. & Amacher, Gregory S. & Elbakidze, Levan, 2015. "Bargaining for recharge: an analysis of cooperating and conjunctive surface water-groundwater management," 2016 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2016, San Francisco, California 212843, Agricultural and Applied Economics Association.
    10. Kuusela, O.P. & Amacher, G.S. & Moeltner, K., 23. "Performance Bonds in Tropical Timber Concessions: Encouraging the Adoption of Reduced Impact Logging Techniques," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 44, May.
    11. Bård Harstad & Torben K. Mideksa, 2017. "Conservation Contracts and Political Regimes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(4), pages 1708-1734.
    12. Kelly Wendland & David Lewis & Jennifer Alix-Garcia, 2014. "The Effect of Decentralized Governance on Timber Extraction in European Russia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 19-40, January.
    13. Divya Datt, 2016. "Inter-governmental political relations in a federation and illegal mining of natural resources," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 557-576, October.
    14. Kelly M. Cobourn & Gregory S. Amacher & Robert G. Haight, 2019. "Cooperative Management of Invasive Species: A Dynamic Nash Bargaining Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(4), pages 1041-1068, April.
    15. Philippe Delacote, 2011. "How concessions’ size may influence systemic corruption in forest harvesting: A theoretical assessment," Working Papers - Cahiers du LEF 2011-05, Laboratoire d'Economie Forestiere, AgroParisTech-INRA.
    16. Martin F. Quaas & Ralph Winkler, 2017. "A Market Mechanism for Sustainable and Efficient Resource Use under Uncertainty," CESifo Working Paper Series 6524, CESifo.
    17. Mohammed, Abrar J & Inoue, Makoto & Shivakoti, Ganesh, 2017. "Moving forward in collaborative forest management: Role of external actors for sustainable Forest socio-ecological systems," Forest Policy and Economics, Elsevier, vol. 74(C), pages 13-19.
    18. Kuusela, Olli-Pekka & Amacher, Gregory S. & Moeltner, Klaus, 2017. "Enforcing the rules in timber concessions: Performance bonding in the presence of corruption risk," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 52-64.
    19. Glöckner, Andreas & Kube, Sebastian & Nicklisch, Andreas, 2018. "The joint benefits of observed and unobserved social sanctions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 105-116.

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