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The Political Economy of Deforestation in the Tropics

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  • Robin Burgess
  • Matthew Hansen
  • Benjamin A. Olken
  • Peter Potapov
  • Stefanie Sieber

Abstract

Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions and threatens the world's most diverse ecosystems. Much of this deforestation is driven by illegal logging. We use novel satellite data that tracks annual deforestation across eight years of Indonesian institutional change to examine how local officials' incentives affect deforestation. Increases in the number of political jurisdictions lead to increased deforestation and lower timber prices, consistent with Cournot competition between jurisdictions. Illegal logging and local oil and gas rents are short-run substitutes, but this effect disappears over time with political turnover. The results illustrate how local officials' incentives affect deforestation and show how standard economic theories can explain illegal behavior. Copyright 2012, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal The Quarterly Journal of Economics.

Volume (Year): 127 (2012)
Issue (Month): 4 ()
Pages: 1707-1754

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Handle: RePEc:oup:qjecon:v:127:y:2012:i:4:p:1707-1754

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  1. Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004. "Opportunistic Political Cycles: Test in A Young Democracy Setting," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(4), pages 1301-1338, November.
  2. Baland, Jean-Marie & Bardhan, Pranab & Das, Sanghamitra & Mookherjee, Dilip, 2010. "Forests to the People: Decentralization and Forest Degradation in the Indian Himalayas," World Development, Elsevier, vol. 38(11), pages 1642-1656, November.
  3. Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-party System as a Repeated Game," Scholarly Articles 4552531, Harvard University Department of Economics.
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Cited by:
  1. Jonathan Colmer, 2013. "Climate Variability, Child Labour and Schooling: Evidence on the Intensive and Extensive Margin," Working Papers 2013.81, Fondazione Eni Enrico Mattei.
  2. David Lam, 2013. "Reply to Stan Becker, “Has the World Really Survived the Population Bomb? (Commentary on “How the World Survived the Population Bomb: Lessons from 50 Years of Extraordinary Demographic History”)," Demography, Springer, Springer, vol. 50(6), pages 2183-2186, December.
  3. Dmitry Ryvkin & Danila Serra, 2013. "Does Competition Among Public Officials Reduce Corruption? An Experiment," Departmental Working Papers 1301, Southern Methodist University, Department of Economics.
  4. Michael Greenstone & B. Kelsey Jack, 2013. "Envirodevonomics: A Research Agenda for a Young Field," NBER Working Papers 19426, National Bureau of Economic Research, Inc.
  5. Moricz, Sara & Sjöholm, Fredrik, 2014. "The Effect of Elections on Economic Growth: Results from a Natural Experiment in Indonesia," Working Paper Series, Research Institute of Industrial Economics 1023, Research Institute of Industrial Economics.
  6. Benjamin A. Olken & Rohini Pande, 2011. "Corruption in Developing Countries," NBER Working Papers 17398, National Bureau of Economic Research, Inc.
  7. Jonathan Colmer, 2013. "Climate Variability, Child Labour and Schooling: Evidence on the Intensive and Extensive Margin," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 132, Grantham Research Institute on Climate Change and the Environment.
  8. Eleni Stathopoulou & Dimitrios Varvarigos, 2013. "Corruption, Entry and Pollution," Discussion Papers in Economics 13/21, Department of Economics, University of Leicester.
  9. Bård Harstad, 2013. "The Market for Conservation and Other Hostages," CESifo Working Paper Series 4296, CESifo Group Munich.
  10. Martina Kirchberger, 2014. "Natural disasters and labour markets," CSAE Working Paper Series 2014-19, Centre for the Study of African Economies, University of Oxford.
  11. Kalifi Ferretti-Gallon and Jonah Busch, 2014. "What Drives Deforestation and What Stops It? A Meta-Analysis of Spatially Explicit Econometric Studies - Working Paper 361," Working Papers, Center for Global Development 361, Center for Global Development.
  12. Dimitrios Varvarigos, 2013. "Economic Growth, Health, and the Choice of Polluting Technologies: The Role of Bureaucratic Corruption," Discussion Papers in Economics 13/22, Department of Economics, University of Leicester.

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