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The Political Economy of Deforestation

Fri, October 1, 8:00 to 9:30am PDT (8:00 to 9:30am PDT), TBA

Session Submission Type: In-Person Full Paper Panel

Session Description

Deforestation is one of the most important environmental issues of our time. However, we know little about how politics affects rates of deforestation, and how it might be used to design policies that help curtail it. In this panel, we explore different channels through which political incentives affect deforestation. In Mexico, Cesar Benshuni Martinez Alvarez explores the ways in which traditional governance institutions affect forest management. He finds that the presence of institutions of traditional governance and their official recognition by state authorities are associated with more sustainable land use. In Brazil, Alice Xu explores the effects of local political competition on deforestation in the Amazon. She finds that although the median voter in the Amazon has a strong preference for environmental conservation, local political competition encourages the destruction of ``the commons'' and leads to higher rates of deforestation. Similarly, Sanford argues that decentralization results in more overall exploitation of forests because local politicians face fewer of the negative environmental externalities from designating protected areas within their constituencies. However, centralized control (potentially through strong party cohesion) results in stronger electoral deforestation cycles as the need for short-term goods from exploitation outweighs the need for long-term goods for preservation as elections approach. Going back to Brazil, Kathryn Baragwanath studies the effects of economic interest groups on the enforcement of environmental rules. She finds that municipalities containing mines have systematically higher levels of deforestation when the mayors in office are linked to mining companies through campaign finance donations. These findings suggest that there is capture of local institutions: extractive companies “buy” political favors from mayors by offering campaign donations, which in turn lead to lower monitoring and enforcement of environmental rules around the mines. Together, this set of papers shows that political incentives are a key driver of deforestation, and could play an important role in the fight against climate change.

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