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

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  • Essi Eerola

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Abstract

This paper studies the formation offorest policy when the government isinfluenced by an environmental lobbyand an industrial lobby representing anon-competitive wood processing industry.Government decides on forestconservation by way of restricting timberharvesting. Lobbying is modelledas a common agency game with differencesin the efficiency of lobbying. Acomparison of the political equilibriashows that an exporting forestindustry faces a stricter conservationrequirement than a forest industrywhose production is destined for domesticmarkets. If the industrial lobbyis more efficient than the environmentallobby, conservation is insufficientfrom the social point of view. However,conservation may be insufficienteven if the environmental lobby is moreefficient in lobbying than theindustrial lobby. This is because thelobbying effort of the environmentallobby also benefits consumers thatremain politically passive. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Essi Eerola, 2004. "Forest Conservation – Too Much or Too Little? A Political Economy Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(4), pages 391-407, April.
  • Handle: RePEc:kap:enreec:v:27:y:2004:i:4:p:391-407 DOI: 10.1023/B:EARE.0000018520.19216.2a
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    References listed on IDEAS

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    Cited by:

    1. Gaoussou DIARRA & Sébastien MARCHAND, 2011. "Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?," Working Papers 201112, CERDI.
    2. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    3. Laing, Timothy & Palmer, Charles, 2015. "Economy-wide impacts of REDD when there is political influence," Resource and Energy Economics, Elsevier, vol. 40(C), pages 107-126.
    4. 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.
    5. Sébastien MARCHAND, 2010. "Historical and Comparative Institutional Analysis: Evidences from Deforestation," Working Papers 201016, CERDI.

    More about this item

    Keywords

    amenity valuation; common agency; forest policy; lobbying; market power;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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