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Deforestation and Seigniorage in Developing Countries: A Tradeoff?

Jean-Louis Combes, Pascale Combes Motel (), Alexandru Minea () and Patrick Villieu ()
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Pascale Combes Motel: CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique

Authors registered in the RePEc Author Service: Pascale Combes Motel ()

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Abstract: Most of countries covered by natural forests are developing countries, with limited ability to levy taxes and restrained access to international credit markets; consequently, they are amenable to draw heavily on two sources of government financing, namely seigniorage and deforestation revenues. First, we develop a theoretical model emphasizing a substitution effect between seigniorage and deforestation revenues. Second, a panel-data econometric analysis over the 1990-2010 period confirms our findings. Consequently, a tighter monetary policy hastens deforestation. Third, we extend the theoretical model and show that international transfers dedicated to forest protection can upturn the positive link between tighter monetary policies and deforestation, and then discuss the relevance of this finding with respect to recent institutional arrangements.

Keywords: seigniorage; deforestation; inflation; developing countries; Panel Data Analysis (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-env
Date: 2015-06-08
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00939273v2
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Related works:
Journal Article: Deforestation and seigniorage in developing countries: A tradeoff? (2015) Downloads
Working Paper: Deforestation and Seigniorage in Developing Countries: A Tradeoff? (2015)
Working Paper: Deforestation and Seigniorage in Developing Countries: A Tradeoff? (2013) Downloads
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