ABSTRACT
This quote from Samuelson contains a tacit assumption that property rights function well in the forest setting considered, whether the forest landowner is public or private. Yet, property rights in many LEDCs can be ill-defined; defined only through removing trees; or inadequately enforced (Heltberg, 2002). Economic analysis of forest use and land cover in this context must, then, explicitly examine how incomplete property rights influence forest management by landowners and influence illegal timber harvest, forest conversion, and forest degradation by other people (Clarke et al., 1993). If the incentives of timber values or cleared-land values outweigh the disincentives associated with being caught and punished for undertaking illegal forest activities-often a reality in LEDCs where forest managers rarely have sufficient budgets to deter all illegal activities-even public forest landowners cannot “expect to find [the timber] there when [s/he] comes to chop it down.” As in the case of fire risk, the risk of illegal harvest/clearing induces owners and managers to harvest earlier or more than in a context of well-defined and enforced property rights. With lack of funds for enforcement of property rights, illegal timber production causes deforestation at higher rates than preferred by those countries.
