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The Political Economy of Deforestation in the Tropics

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

Abstract

Tropical deforestation accounts for almost one-Öfth of greenhouse gas emissions worldwide and threatens the worldís most diverse ecosystems. The prevalence of illegal forest extraction in the tropics suggests that understanding the incentives of local bureaucrats and politicians who enforce forest policy may be critical to combating tropical deforestation. We Önd support for this thesis using a novel satellite-based dataset that tracks annual changes in forest cover across eight years of institutional change in post-Soeharto Indonesia. Increases in the numbers of political jurisdictions are associated with increased deforestation and with lower prices in local wood markets, consistent with a model of Cournot competition between jurisdictions. We also show that illegal logging and rents from unevenly distributed oil and gas revenues are short run substitutes, but this e§ect disappears over time as political turnover occurs. The results illustrate how incentives faced by local government o¢ cials a§ect deforestation, and provide an example of how standard economic theories can explain illegal behavior.

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Bibliographic Info

Paper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 79.

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Date of creation: Apr 2012
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Handle: RePEc:lsg:lsgwps:wp79

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  1. Akhmed Akhmedov & Ekaterina Zhuravskaya, 2003. "Opportunistic Political Cycles: Test in a Young Democracy Setting," Working Papers w0024, Center for Economic and Financial Research (CEFIR).
  2. Jean-Marie Baland & Pranab Bardhan & Sanghamitra Das & Dilip Mookherjee, 2008. "Forests to the People: Decentralization and Forest Degradation in the Indian Himalayas," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-169, Boston University - Department of Economics.
  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. Moricz, Sara & Sjöholm, Fredrik, 2014. "The Effect of Elections on Economic Growth: Results from a Natural Experiment in Indonesia," Working Papers 2014:15, Lund University, Department of Economics.
  3. 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 361, Center for Global Development.
  4. 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, vol. 50(6), pages 2183-2186, December.
  5. Eleni Stathopoulou & Dimitrios Varvarigos, 2013. "Corruption, Entry and Pollution," Discussion Papers in Economics 13/21, Department of Economics, University of Leicester.
  6. 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.
  7. Martina Kirchberger, 2014. "Natural disasters and labour markets," CSAE Working Paper Series 2014-19, Centre for the Study of African Economies, University of Oxford.
  8. Bård Harstad, 2011. "The Market for Conservation and Other Hostages," NBER Working Papers 17409, National Bureau of Economic Research, Inc.
  9. Benjamin A. Olken & Rohini Pande, 2011. "Corruption in Developing Countries," NBER Working Papers 17398, National Bureau of Economic Research, Inc.
  10. 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 132, Grantham Research Institute on Climate Change and the Environment.
  11. Dmitry Ryvkin & Danila Serra, 2013. "Does Competition Among Public Officials Reduce Corruption? An Experiment," Departmental Working Papers 1301, Southern Methodist University, Department of Economics.
  12. Michael Greenstone & B. Kelsey Jack, 2013. "Envirodevonomics: A Research Agenda for a Young Field," NBER Working Papers 19426, National Bureau of Economic Research, Inc.

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