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Insider activism in the forest industry: An empirical public choice analysis

Author

Listed:
  • Grafström, Jonas

    (The Ratio Institute)

  • Karlson, Nils

    (The Ratio Institute)

Abstract

Insider activism—where bureaucrats use discretionary power to advance own ideological goals—has significant implications for regulatory stability and property rights security. Using the Swedish forestry industry as a case study, the purpose of this study is to investigate if insider activism affects the Swedish forestry sector and how such possible regulatory uncertainty influences economic decision-making. Assembled survey data suggest that forest owners perceive regulatory enforcement as unpredictable, leading to defensive actions such as premature harvesting to preempt restrictive future regulations. To explain these patterns, we apply public choice theory and a game-theoretic approach, demonstrating how bureaucratic drift, regulatory ratcheting, and time-inconsistency problems contribute to persistent distortions in forestry policies. Policy wise, the findings emphasize the need for judicial review, regulatory impact assessments, and clearer legislative mandates to reduce enforcement uncertainty and improve institutional trust. This research advances discussions on bureaucratic incentives, regulatory capture, and legal certainty in environmental policy.

Suggested Citation

  • Grafström, Jonas & Karlson, Nils, 2025. "Insider activism in the forest industry: An empirical public choice analysis," Ratio Working Papers 383, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0383
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Insider Activism; Bureaucratic Influence; Bureaucratic Drift; Legal Uncertainty; Property Rights; Sustainable Development; Swedish Forest Industry;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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