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Public spending, credit and natural capital : Does access to capital foster deforestation?

Author

Listed:
  • Jean-Louis Combes

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique)

  • Philippe Delacote

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres)

  • Pascale Combes Motel

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique)

  • Thierry Urbain Yogo

    (BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale)

Abstract

Improving access to man-made capital through domestic credit and public spending is a step towards development. Developing countries rely also on natural capital, which may generate possible conflicts between environment and development targets. Taking the case of land-use and deforestation, this paper revisits the links between man-made and natural capital. Relying on a model of income maximization, we theoretically assess how better access to man-made capital through public spending and credit, influences forest cover loss. Econometric investigations, over the period 2001–2012, show that forest cover loss is positively influenced by credit and public spending. A better access to capital is thus detrimental to the forest. This can be interpreted as a Tinbergen rule : the development objective of facilitating access to man-made capital cannot be tackled without facing the objective of environmental protection.

Suggested Citation

  • Jean-Louis Combes & Philippe Delacote & Pascale Combes Motel & Thierry Urbain Yogo, 2018. "Public spending, credit and natural capital : Does access to capital foster deforestation?," Post-Print hal-01805161, HAL.
    • Handle: RePEc:hal:journl:hal-01805161
    DOI: 10.1016/j.econmod.2018.04.006
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    Cited by:

    1. Allen N. Berger & Cristina Ortega & Matias Ossandon Busch & Raluca Roman, 2024. "Banking on Deforestation: The Cost of Nonenforcement," Working Papers 24-21, Federal Reserve Bank of Philadelphia.
    2. Nguyen, Canh Phuc & Nguyen, Binh Quang, 2023. "Environmental foe or friend: The influence of the shadow economy on forest land," Land Use Policy, Elsevier, vol. 124(C).
    3. Novice Patrick Bakehe, 2019. "The effects of migrant remittances on deforestation in the Congo basin," Economics Bulletin, AccessEcon, vol. 39(4), pages 2361-2373.
    4. Coulibaly, Yacouba, 2024. "Resource-backed loans and ecological efficiency of human development: Evidence from African countries," Ecological Economics, Elsevier, vol. 224(C).
    5. Yacouba Coulibaly, 2023. "Can Resource-backed Loans Mitigate Climate Change ?," Working Papers hal-04072352, HAL.
    6. Kinda, Harouna & Thiombiano, Noel, 2021. "The effects of extractive industries rent on deforestation in developing countries," Resources Policy, Elsevier, vol. 73(C).
    7. Niu, Bingcheng, 2024. "Government environmental protection expenditure and national ESG performance: Global evidence," Innovation and Green Development, Elsevier, vol. 3(2).
    8. Coulibaly, Yacouba, 2025. "The effects of resource-backed loans on deforestation: Evidence from developing countries," World Development, Elsevier, vol. 188(C).
    9. GOMADO, Kwamivi Mawuli, 2018. "Diversité ethnique et déforestation dans les pays en développement: identification des principaux canaux [Ethnic diversity and deforestation in developing countries: identifying the transmission ch," MPRA Paper 89380, University Library of Munich, Germany.
    10. Yacouba Kassouri, 2024. "The Rise of Transnational Financial Crimes and Tropical Deforestation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(10), pages 2795-2831, October.
    11. Canh Phuc Nguyen & Binh Quang Nguyen & Duyen Thuy Le Tran, 2023. "Over two decades of severe deforestation: an economic perspective of tourism development," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(1), pages 83-104, March.

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