Insider activism in the forest industry: An empirical public choice analysis

Jonas Grafström and Nils Karlson
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Jonas Grafström: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Nils Karlson: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

No 383, Ratio Working Papers from The Ratio Institute

Abstract: Insider activism—where bureaucrats use discretionary power to advance own ideological goals—has significant implications for regulatory stability and property rights security. Using the Swedish forestry industry as a case study, the purpose of this study is to investigate if insider activism affects the Swedish forestry sector and how such possible regulatory uncertainty influences economic decision-making. Assembled survey data suggest that forest owners perceive regulatory enforcement as unpredictable, leading to defensive actions such as premature harvesting to preempt restrictive future regulations. To explain these patterns, we apply public choice theory and a game-theoretic approach, demonstrating how bureaucratic drift, regulatory ratcheting, and time-inconsistency problems contribute to persistent distortions in forestry policies. Policy wise, the findings emphasize the need for judicial review, regulatory impact assessments, and clearer legislative mandates to reduce enforcement uncertainty and improve institutional trust. This research advances discussions on bureaucratic incentives, regulatory capture, and legal certainty in environmental policy.

Keywords: Insider Activism; Bureaucratic Influence; Bureaucratic Drift; Legal Uncertainty; Property Rights; Sustainable Development; Swedish Forest Industry (search for similar items in EconPapers)
JEL-codes: D73 D78 H77 H83 Q23 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2025-06-04
New Economics Papers: this item is included in nep-agr
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