Governance and Deforestation Due to Agricultural Land Expansion

Gregmar Galinato (ggalinato@wsu.edu) and Suzette Galinato (sgalinato@wsu.edu)

No 2009-21, Working Papers from School of Economic Sciences, Washington State University

Abstract: This article examines the effect of governance on forest cover in developing countries. We develop a theoretical model that explains how governance, particularly corruption control and politically stability, affects deforestation due to agricultural land expansion. The theoretical model shows the importance of the complementarity or substitutability of technology and land use in determining the effect of governance on agricultural land expansion and, consequently, forest cover. We complement the theoretical model with a structural empirical analysis to measure the effect of corruption control and political stability on deforestation in developing countries through two direct channels of deforestation: agricultural land expansion and road building. We find that political stability has a positive and significant effect on forest cover but corruption control has a negative and significant effect on forest cover due to increased agricultural land expansion.

Keywords: Deforestation; Governance; Corruption; Political stability (search for similar items in EconPapers)
JEL-codes: O10 Q23 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2009-12
New Economics Papers: this item is included in nep-agr, nep-env and nep-pol
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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