Saturday, August 17, 2013

Property rights and deforestation

from the article
Zachary Liscow's recently published "Do Property Rights Promote Investment But Cause Deforestation? Quasi-Experimental Evidence from Nicaragua", an economics article, has deep resonance with both the environmental law and environmental history literatures. Many have argued that private property is a solution to environmental problems of the sort Garrett Hardin called "The Tragedy of the Commons". Others have blamed private property for environmental depredations of all sorts. Liscow weighs in with some empirical research, as the abstract explains:
Many policymakers argue that property rights decrease deforestation. Some theoretical papers also make this prediction, arguing that property rights decrease discount rates applied to a long-term investment in forestry. However, the effect is theoretically ambiguous. The paper takes a novel instrumental variables approach based on Nicaragua's agrarian reform to test for the effect, using a new data-set — Nicaragua's 2001 agricultural census. It finds that property rights significantly increase deforestation. The model, supported by the data, suggests a likely mechanism for this relationship: property rights increase investment, increasing agricultural productivity and therefore the returns to deforestation.

1 comment:

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