Linking Forests and Economic Well-Being: A Four-Quadrant Approach

This paper has three main objectives: (1) to investigate whether the four-quadrant approach introduced by Maini (2003) reveals a useful typology for grouping countries by GDP and forest cover per capita, (2) to determine if the framework can enhance our understanding of the relationship between forest cover and GDP per capita, and (3) to investigate why countries in the four-quadrant world occupy different quadrants, and to determine the principal factors affecting country-movement across and within the individual quadrants. The examination reveals that countries can be classified into four broad categories, and that GDP and forest cover per capita have a low but consistent level of negative association. After regressing economic, institutional, social capital and other variables on a country’s occupancy and movement in the four-quadrant world, the results suggest that countries in each quadrant share different characteristics and that factors underlying country-movement varies according to the quadrant being observed. Overall, countries with less corruption and higher education are likely to experience increases in both forest cover and GDP per capita, while countries exporting a significant proportion of forest products have a reduced probability of increasing both variables.