Causes of deforestation

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Causes of deforestation can be classified into three categories (Geist & Lambin 2002): source, predisposing and underlying causes. Source or proximate causes relate mainly to investments in infrastructure and road networks and to economic activities such as cattle ranching (Kaimowitz 1996), agricultural activities (Barbier 2004) and commercial logging as well (Van Kooten & Folmer 2004). Geo-ecological factors such as soil quality, rainfall and temperature are considered as predisposing factors of deforestation which condition the links between proximate and underlying causes. The latter operate mainly at the macro level and are related to social processes such as population pressure (Cropper & Griffiths 1994), landownership and income distributions, national and regional development strategies (Koop & Tole 2001), agricultural research and technological change as well.(Southgate et al. 1990)

Among underlying causes, institutional factors have received special attention. Better institutions lower transaction costs – costs of information, negotiation, monitoring, coordination and enforcement of contracts (see for example Bardhan, 1993). Put differently, institutions shape conservation and / or investment incentives in assets including natural ones such as forests. One example of the effect of institutions on natural resource use is the so called Tragedy of the commons which has evolved into the Tragedy of the open access (Hardin, 1968; Hardin 1998): it establishes a link between incomplete property rights to an unsustainable use of natural resources. The property right paradigm after Alchian and Demsetz (1973) shows the importance of the devolution of complete property rights in the efficient use of (natural) resources. It is often argued that developed countries have successfully developed their property rights institutions under population pressure, technological change and agricultural markets development (Barbier 2000). According to De Soto (2000) ill-defined or poorly enforced property rights in developing countries are often the consequence of transplanted laws from colonisers which do not fit the context of developing countries. One may thus be tempted to establish a causal relationship between deforestation in developing countries to one of their characteristics: institutional weaknesses, i.e. limited rule of law and poor property rights drive deforestation incentives in developing countries. According to the Forest Resources Assessment (FAO 2006) about six million hectares of primary forests have disappeared since 1990, mostly as a consequence of deforestation. Enforcing property rights, especially in the forests, is encompassed in a “rights’ based approach” of development: assigning and enforcing property rights should ease the achievement of sustainable development goals (e.g. (Johnson & Forsyth 2002).

Econometric studies have given many evidences of the relationship between property rights and deforestation. Barbier & Burgess (2001) simulate the effects of insecure land tenure on the conversion of tropical forest into unsustainable agriculture. Deacon (1999) and Mendelsohn (1994), working on cross-country datasets, evidence detrimental effects of insecure ownership on deforestation. In both studies, property rights insecurity arises from the lack of government accountability and the political instability as measured by the type of government, constitutional changes, revolutions, political assassinations, purges as well as guerrilla warfare. Bhattarai & Hammig (2001) highlight also the positive effects of an improvement in political institutions and governance for forest preservation while measuring institutional quality with indices of political rights and civil liberty. Culas (2007) uses the Knack and Keefer's (1995) indicators of contract enforceability and bureaucracy efficiency to stress the positive impact of institutional arrangements for secure property rights on forest preservation. Ferreira (2004) argues that commercial openness indirectly hastens deforestation: its effect is channelled by institutional deficiencies in developing countries. Bohn & Deacon (2000) show that the statement must be however qualified: natural resources such as forests, requiring little capital for their depletion, are likely to be over-exploited when ownership is poorly enforced.

Generally speaking, a property right allows identify owners and users of resources; it also defines time and conditions of use.[1] One can also consider customary tenure systems which are locally determined and often based on oral agreements, from legal ones which are applied by governments and are codified in the Law. Whatever property rights assignments over the forests, public authorities play a crucial role in the deforestation process in many aspects: public authorities legally hold a vast amount of forested areas. Public authorities also determine how far private property rights forests are (un)secured . At last, they have also engaged in a decentralisation process in several countries.

Inefficient public property rights

Forested areas are mainly publicly owned all over the world (FAO 2006); in the average more than 80% of forested areas are under public property regimes; the figure rises up to 90% in Africa (Table 1). The state may either directly manage the forests or also lease their use to groups or individuals which are granted temporary usufruct rights.

Theoretical arguments support the public property of forests. They rely on the maximisation of social welfare which consists in balancing marginal benefits and costs of deforestation (or symmetrically forest conversion). The former are mainly net returns from agriculture. The latter derive mainly from the environmental services supplied by forests, which include protection of biological diversity, carbon sinks, regulation of water flows and soil erosion mitigation as well. These services have a public good character at a local and global level as well and generate positive externalities.[2] Public authorities should have a better access to information on local and global benefits of forest conservation and should better identify the “optimal” level of deforestation (Figure 1) or, put differently, the optimal provision of forest conservation. In the same vein, public authorities should better take long term issues into account such as those generated by a sustainable forest management or by carbon sequestration as well. It is sometimes calculated that carbon sequestration is as valuable as timber (e.g. Bulte et al. 2002). Moreover, transactions costs of forest management can be downsized in the presence of a sole owner instead of many. At last, these arguments are also rooted in colonial experiences during which public property rights were imposed because of their supposed superiority over customary arrangements (Nelson 2004).

The reality is somewhat different. Marginal benefits of deforestation appear to be high in developing countries and to have a high incidence on poverty (e.g. Andersen et al. (2002)). Public policies thus often see forested areas as underdeveloped and / or use them as an outlet for urban population pressure or as a source of short-term revenue (Repetto & Gillis 1988). Several states fail, inducing important monitoring costs and hindering sustainable forest management. In timber rich countries like Indonesia, the state allocated rights to private companies but failed to institute an effective control on the forest resources (McCarthy in Doornbos et al. 2000). As a consequence, public forests are de facto open accessed, which is particularly true when they are located far from administrative centres. Moreover, many studies emphasize the importance of illegal activities in deforestation and degradation. Governments may have an incentive to tolerate illegal logging when monitoring costs are high and when corruption is widespread (Tacconi et al. 2004). Until recently however, there exist arguments in favour of the implementation of concessions to solve forest tenure problems. But several authors cast doubts on the reduction in predatory and illegal logging as well as they fear that such concessions may be granted at lower prices than their fundamental values (see the literature review in Karsenty et al. 2008).

Insecure private property rights

Many developing countries do not provide adequate protection to landholders’ rights. In Brazil for instance, numerous landholders do not have legal titles and waves of land invasions have been observed (Binswanger 1991 or Clark (2000) in Peru). More generally most developing countries suffer from overlapping forest institutions – law versus customary arrangements – which can be understood as unsecure property and control over forest resources. In such a risky environment, deforestation may become a rational choice. As part of a risk management strategy, agents have incentives to convert forests into pasture or agricultural lands. At the same time, deforestation can also be analysed as the result of strategic interactions between landowners and squatters who compete for land access and seek to legitimate their ownership (Araujo et al. 2009)

Farmers choose between alternative land uses – forest exploitation, cattle ranching or agriculture – comparing their relative risk adjusted profitabilities. Forest is a natural asset which generates inter-temporal flows of incomes that arise from wood (e.g. timber & fuel collection) and from non-wood forest products (fruits, oils, medicinal plants, latex, etc.). Maximising inter-temporal revenues or utility from forested lands should yield sustainable forest management. Outcomes from such criterion decision are however altered by the risk of losing land property rights. The discount rate in present value calculations is increased and thereby future incomes from land are decreased. Mendelsohn (1994) shows that eviction risks or lack of long term control over forested areas discourage sustainable forest uses. Agricultural technological progress may also interact with land tenure insecurity: Kazianga & Masters (2006) show that introducing new cocoa varieties increases deforestation under insecure property rights.

Under the hypothesis that it is easier and less costly to protect property rights on cultivated areas than on forest lands, deforestation may be seen as a strategy enabling secure property rights . Moreover, forestlands can be considered as open access resources and deforestation as ownership establishment strategies. Positive rents generate incentives for further encroachments until rents are dissipated. Ownership establishment strategies can be compared to those of the settlers in the 18th and 19th centuries in the United States who gained extralegal land titles resorting to the so-called tomahawk right (De Soto 2000). Landholders may also reduce their risk exposure, making improvements to enhance their land rights or defensive expenditures to achieve secure property rights. Angelsen (2001) describes how strategic interactions between landholders who compete for open access forestlands result in excess deforestation, i.e. higher than it would be with secure property rights. Hotte (2005) shows that landholders exert a more intensive pressure on their resources in order to reduce encroachments' incentives. Alston et al. (1996) describe how land titling is conditional on « land improvements » which often consists in conversions of forests into agricultural lands. Land reforms play also a crucial role: the perspective of land reforms have given further incentives to deforestation in Paraguay by landowners who feared that their forested areas became “unproductive” (Dorner & Thiesenhusen 1992; see also Griffiths 2002); land reforms have exacerbated land conflicts and deforestation in Brazil (Alston et al. 2000).

Growing interest for decentralisation

Scholars agree to recognise that well defined and zero transaction costs in the enforcement of property rights contribute to the efficient management of resources. Scholars also agree on the usefulness of defining and enforcing property rights. The question remains however opened about the nature of property rights: a vast array of rights from private to public or a more or less complete devolution of rights can be promoted. Failures of public authorities, public spending downsizing and increased preference for decentralisation have led some countries to transfer part of their rights and duties on local communities and households, thereby reliving “forestry communities” as documented in (Agrawal & Ostrom 2001). In recent years, forest state ownership has declined. Correspondingly use rights or complete property rights to communities and indigenous peoples have increased as well as areas owned by individuals and firms in tropical countries (Hatcher & Bailey. 2009; Sunderlin et al. 2008).

Transferring rights and control of forested areas to local peoples has attractive features which may be understood on efficiency and equity grounds as well.[3] First, collective action may be less costly at the local level; gathering information on the state of the resource may ease internalisation of local external effects generated by forests as well. Moreover, it can be expected that insurance issues may be better taken into account at the local level. Second, managing the forest at the local level may achieve a more equitable access to resources, especially for the poorest. Several studies can be found showing that forests are less degraded in forested areas under common property regimes (e.g. Baland et al. 2008). At last, community management may be favoured in light of the implementation of market based incentives such as payments for environmental services. (Wunder. 2005)

Theoretical arguments may however dampen the latter statements. First, local communities do not necessarily have stronger incentives to take (local) external effects than individuals. New forestry laws authorising local governments in Indonesia to issue logging permits have not adequately internalised external effects beyond the local level such as carbon storage and biodiversity (Palmer & S. Engel. 2007). In some cases, resource extraction may be exacerbated (Engel & López. 2008). Secondly, local communities are barely homogenous entities. Conflicting interests may be exacerbated unless rules concerning the management of common property resources are enforced (see e.g. (Ostrom. 1991, p.90)). Thirdly, rent-seeking activities may increase at the expense of poor individuals and women.

Forest ownership tables

Table 1. Worldwide ownership of forests







1000 ha




Total Africa

655 613




Total Asia

566 562




Total Europe

998 091




Total North America

677 971




Total Caribbean

5 706




Total Central America

23 837




Total South America

852 796




Total Oceania

208 034




Total World

3 988 610




Source: acceded 14 Dec. 09

Table 2. Estimated distribution of forest ownership for selected categories





Administered by Government

Reserved for Community & Indigenous Groups

Community / Indigenous

Individual / Firm

Global Forest Estate





Developing Countries





Developed Countries





Countries with Tropical Forests





Figures are in percentages of total forested areas. Source: White & Martin. 2005.


Figure 1. Causes of deforestation  (Adapted from Pearce. 2002)


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[1] A property right is said complete when three elements are warranted by the legal system: (i) exclusivity of rights of use of a resource (usus); (ii) exclusivity of rights to the services provided by a resource (fructus) and (iii) right to transfer a resource (abusus) (Furubotn & Pejovich, 1974)

[2] The Millenium Ecosystem Assessment (2005) provides a comprehensive review of services provided by forests. See also Chomitz (2007, chap.4)

[3] The optimal decentralisation theory was developed by Oates (1972). See Andersson et al. (2006) for an overview related to natural resources management.



Motel, P. (2010). Causes of deforestation. Retrieved from


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