Deforestation and forest land use: A comment
Hyde, Amacher, and Magrath (1996) imply that deforestation and timber rents (logging revenue minus logging costs other than timber fees) are not subjects that justify policymakers' attention, arguing that market responses limit the scope of deforestation and that rents are usually small. But they fail to recognize that land markets will not develop efficiently, nor will efficient levels of forestry investments occur, when policy distortions and other factors obstruct the conversion of open-access forests to private or communal ownership. For these reasons rates of deforestation can be far above optimal levels. Contrary to the authors' claims, timber rents often (although not always) are large in developing countries. Moreover, the allocation of rents between loggers and the government owners of public forests can indeed affect the profitability of forestry (and thus deforestation), the intensity of timber harvesting, and national welfare.
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