Deforestation and Economic Development: An Institutional Perspective

Research output: Book chapter/Published conference paperConference paper


This paper examines the impact of some specific institutional factors on environmental Kuznets curve (EKC) relationship for deforestation. The
institutional factors are defined to capture the effect of property right and environmental policy on the EKC, by reducing the height of the EKC for moving towards a sustainable growth path. Other factors related to agricultural
production, population, economy and governmental policy are employed in the model as conditional variables. The empirical model has been estimated across Latin American, African and Asian countries. Results of the Latin American
countries show not only statistically significant evidence of an EKC relationship for deforestation, but also relevance of the institutional factors to reduce the rate of deforestation, ie. shifting the EKC downwards. Improvements in institutions for secure property right and better environmental policy can thus significantly reduce the rate of deforestation without hindering the level of economic growth. Considering the significant effect of institutional factors over the other factors, the effect of agricultural production on deforestation disappears when the institutional variable is included in the EKC model. The results also evidencing a complementary effect between the institutional variable and forest sector polices, as well as an additive effect between the institutional variable and forest products export promotion policies, which could also eventually limit the rate of deforestation.
Original languageEnglish
Title of host publicationPaper presented at the Australia New Zealand Society for Ecological Economics (ANZSEE) Conference 2002
Place of PublicationSydney NSW, Australia
PublisherUniversity of Technology, Sydney NSW
Number of pages31
Publication statusPublished - 02 Dec 2002


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