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Who Should Own Indonesia's forests? Exploring the Links between Economic Incentives, Property Rights and Sustainable Forest Management



The existing economic incentive regime was one main factor behind high deforestation rates in Indonesia. Government intervention to push for the expansion wood processing industries resulted in unsustainable resource use patterns. Uncertain tenurial arrangements and property rights, unenforceable contractual obligations and weak monitoring and enforcement by the government exacerbated the situation. Indonesia's existing forest management system does not provide efficient structures of control rights to any of the sector's many stakeholders. The lack of well-defined property rights has prevented various stakeholders from trading their control rights so as to improve the efficiency of the management. Future economic research on forestry issues in Indonesia could therefore highlight the importance of secure property and ownership rights in any strategies to implement sustainable forestry management.

Suggested Citation

  • Raymond Atje & Kurnya Roesad, 2004. "Who Should Own Indonesia's forests? Exploring the Links between Economic Incentives, Property Rights and Sustainable Forest Management," CSIS Economics Working Paper Series WPE076, Centre for Strategic and International Studies, Jakarta, Indonesia.
  • Handle: RePEc:sis:wpecon:wpe076

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    References listed on IDEAS

    1. M. Chatib Basri & Hal Hill, 2004. "Ideas, Interests and Oil Prices: The Political Economy of Trade Reform During Soeharto's Indonesia," The World Economy, Wiley Blackwell, vol. 27(5), pages 633-655, May.
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    More about this item


    Indonesia; forest management; property rights; incentive design;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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