ABSTRACT
The chapter begins with a broad overview of the world forest situation and the issue of deforestation. In this discussion, it makes an important distinction between temperate and tropical forests, emphasizing that much of the current world deforestation problems are occurring in tropical forests, most of which are located in low-income countries. The discussion then turns to an examination of international institutions for forest management and protection, where an important leadership role is being played by the United Nations. We then present a simple economic model of forest resources, which combines simple scientific models of forest growth dynamics with a model of economic behavior in order to provide a framework for understanding forest usage. The discussion then turns to a discussion of various forest management policy tools that have come to enjoy widespread use. These include debt-for-nature swaps, payments for ecosystem services, land trusts, and conservation easements. Each of these policies are described and subjected to economic analysis to illustrate their advantages and disadvantages. The discussion then develops a property rights perspective on forests and timber, emphasizing the importance of secure property rights and stable institutions in securing successful forest outcomes. This leads naturally into a discussion of the social ecological systems framework in forest management, to see what insights can be gleaned from applying the framework to local forest management. The chapter concludes with a discussion of public choice issues with regard to tropical deforestation, which illustrates a number of the challenges in promoting protection and successful management of tropical forests.
