The Political Economy of Deforestation in the Tropics
Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's 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 understanding tropical deforestation. We find 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. Illegal logging increases dramatically in the years leading up to local elections, suggesting the presence of "political logging cycles". And, illegal logging and rents from unevenly distributed oil and gas revenues are short run substitutes, but this effect dissapears over time as political turnover occurs. The results illustrate how incentives faced by local government officials affect deforestation, and provide an example of how standard economic theories can explain illegal behavior.
|Date of creation:||Sep 2011|
|Publication status:||published as Robin Burgess & Matthew Hansen & Benjamin A. Olken & Peter Potapov & Stefanie Sieber, 2012. "The Political Economy of Deforestation in the Tropics," The Quarterly Journal of Economics, Oxford University Press, vol. 127(4), pages 1707-1754.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004.
"Opportunistic Political Cycles: Test in a Young Democracy Setting,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 119(4), pages 1301-1338.
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- 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.
- Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-party System as a Repeated Game," Scholarly Articles 4552531, Harvard University Department of Economics. Full references (including those not matched with items on IDEAS)
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