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Forest Conservation - Too Much or Too Little? A Political Economy Model

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Author Info

  • Eerola, E.

Abstract

This paper studies the formation of forest conservation policy when the government is influenced by an environmental lobby and an industrial lobby representing a non-competitive forest industry. Lobbying is modelled as a common agency game which is extended to allow for asymmetries in lobbying technologies. When the forest product is exported the politically determined conservation policy always departs from the socially optimal policy in favor of the more efficient lobby. But when the forest product is destined for domestic markets conservation may ve excessive from the social point of view even though the industrial lobby has more efficient lobbying technology than the environmental lobby.

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Bibliographic Info

Paper provided by Department of Economics in its series University of Helsinki, Department of Economics with number 491.

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Length: 28 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:helsec:491

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Postal: University of Helsinki; Department of Economics, P.O.Box 54 (Unioninkatu 37) FIN-00014 Helsingin Yliopisto
Phone: +358 9 191 8897
Fax: +358 9 191 8877
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Web page: http://www.helsinki.fi/politiikkajatalous/
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Keywords: FOREST POLICY ; GOVERNMENT ; ENVIRONMENT;

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References

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  1. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
  3. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 265-86, April.
  4. Schleich, Joachim, 1999. "Environmental quality with endogenous domestic and trade policies1," European Journal of Political Economy, Elsevier, vol. 15(1), pages 53-71, March.
  5. Faure-Grimaud, Antoine & Laffont, Jean-Jacques & Martimort, David, 1999. "The endogenous transaction costs of delegated auditing," European Economic Review, Elsevier, vol. 43(4-6), pages 1039-1048, April.
  6. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
  7. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
  8. Aidt, Toke S., 1998. "Political internalization of economic externalities and environmental policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 1-16, July.
  9. Fredriksson, Per G., 1997. "The Political Economy of Pollution Taxes in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 44-58, May.
  10. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, vol. 89(5), pages 1116-1134, December.
  11. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-41, December.
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Citations

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Cited by:
  1. 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.
  2. Gaoussou Diarra & Sébastien Marchand, 2011. "Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?," Working Papers halshs-00588191, HAL.
  3. Timothy Laing & Charles Palmer, 2013. "Economy-wide impacts of REDD when there is political influence," Grantham Research Institute on Climate Change and the Environment Working Papers 110, Grantham Research Institute on Climate Change and the Environment.

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