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The political economy of deforestation in the tropics

Burgess, Robin, Hansen, Matthew, Olken, Benjamin and Sieber, Stefanie (2012) The political economy of deforestation in the tropics. Quarterly Journal of Economics, 127 (4). pp. 1707-1754. ISSN 0033-5533

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Abstract

Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions and threatens the world’s most diverse ecosystems. Much of this deforestation is driven by illegal logging. We use novel satellite data that tracks annual deforestation across eight years of Indonesian institutional change to examine how local officials’ incentives affect deforestation. Increases in the number of political jurisdictions lead to increased deforestation and lower timber prices, consistent with Cournot competition between jurisdictions. Illegal logging and local oil and gas rents are short run substitutes, but this effect disappears over time with political turnover. The results illustrate how local officials’ incentives affect deforestation, and show how standard economic theories can explain illegal behavior.

Item Type: Article
Official URL: http://qje.oxfordjournals.org/
Additional Information: © 2012 The Authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
J Political Science > JA Political science (General)
Journal of Economic Literature Classification System: F - International Economics > F5 - International Relations and International Political Economy > F59 - International Relations and International Political Economy: Other
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q34 - Natural Resources and Domestic and International Conflicts
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 07 Nov 2012 12:05
URL: http://eprints.lse.ac.uk/46779/

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