Working Paper: NBER ID: w16756
Authors: Lee J. Alston; Krister Andersson
Abstract: Understanding and minimizing the transaction costs of policy implementation are critical for reducing tropical forest losses. As the international community prepares to launch REDD+, a global initiative to reduce greenhouse gas emissions from tropical deforestation, policymakers need to pay attention to the transactions costs associated with negotiating, monitoring and enforcing contracts between governments and donors. The existing institutional design for REDD+ relies heavily on central government interventions in program countries. Analyzing new data on forest conservation outcomes, we identify several problems with this centralized approach to forest protection. We describe options for a more diversified policy approach that could reduce the full set of transaction costs and thereby improve the efficiency of the market-based approach for conservation.
Keywords: transaction costs; REDD; forest conservation; deforestation; policy implementation
JEL Codes: H11; H23; K32; K33; K41; K42; O13; O38; O43; Q15; Q2; Q23; Q24; Q34; Q38; Q49; Q54; Q58; R1; R13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high transaction costs associated with negotiating contracts, monitoring compliance, and enforcing agreements (L14) | inefficiencies in forest conservation efforts (Q23) |
| government actions (H59) | deforestation rates (Q23) |
| centralized approach to REDD (H23) | increased transaction costs (D23) |
| lack of clarity in property rights (P14) | increased transaction costs (D23) |
| decentralized approach involving local communities and multiple governance levels (H77) | improve conservation outcomes (Q20) |