The Political Economy of Deforestation in the Tropics

Burgess, Robin; Hansen, Matthew C.; Olken, Benjamin A.; Potapov, P.; Sieber, Stefanie

doi:10.3386/w17417

Cited by 163 publications

(182 citation statements)

References 77 publications

(49 reference statements)

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“…In this paper, we document a political cycle in illegal cash payments that firms make to politicians in order to obtain procurement contracts. Related to our findings, Burgess et al (2012) show a political cycle in another illegal activity that brings cash to politicians, namely, forest extraction in the tropics. Our finding that firms provide benefits to politicians in the face of elections is also related to Bertrand et al (2007b), who document that political connections are associated with the political cycle in employment granted for the political benefit of incumbent politicians.…”

mentioning

confidence: 95%

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

Mironov

Zhuravskaya

2016

American Economic Journal: Economic Policy

103

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mentioning

confidence: 95%

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

Mironov

Zhuravskaya

2016

American Economic Journal: Economic Policy

103

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“…Deforestation in Indonesia is largely driven by the expansion of profitable and legally sanctioned oil palm and timber plantations and logging operations (5,(8)(9)(10)(11)(12)(13). National and provincial governments zone areas of forest land to be logged or converted to plantation agriculture, and then district governments issue licenses to individual companies for these purposes ("concessions") (14,15). Substantial deforestation occurs outside of legally sanctioned concession areas as well.…”

mentioning

confidence: 99%

Reductions in emissions from deforestation from Indonesia’s moratorium on new oil palm, timber, and logging concessions

Busch

Ferretti-Gallon

Engelmann

et al. 2015

Proc. Natl. Acad. Sci. U.S.A.

195

128

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To reduce greenhouse gas emissions from deforestation, Indonesia instituted a nationwide moratorium on new license areas (“concessions”) for oil palm plantations, timber plantations, and logging activity on primary forests and peat lands after May 2011. Here we indirectly evaluate the effectiveness of this policy using annual nationwide data on deforestation, concession licenses, and potential agricultural revenue from the decade preceding the moratorium. We estimate that on average granting a concession for oil palm, timber, or logging in Indonesia increased site-level deforestation rates by 17–127%, 44–129%, or 3.1–11.1%, respectively, above what would have occurred otherwise. We further estimate that if Indonesia’s moratorium had been in place from 2000 to 2010, then nationwide emissions from deforestation over that decade would have been 241–615 MtCO2e (2.8–7.2%) lower without leakage, or 213–545 MtCO2e (2.5–6.4%) lower with leakage. As a benchmark, an equivalent reduction in emissions could have been achieved using a carbon price-based instrument at a carbon price of $3.30–7.50/tCO2e (mandatory) or $12.95–19.45/tCO2e (voluntary). For Indonesia to have achieved its target of reducing emissions by 26%, the geographic scope of the moratorium would have had to expand beyond new concessions (15.0% of emissions from deforestation and peat degradation) to also include existing concessions (21.1% of emissions) and address deforestation outside of concessions and protected areas (58.7% of emissions). Place-based policies, such as moratoria, may be best thought of as bridge strategies that can be implemented rapidly while the institutions necessary to enable carbon price-based instruments are developed.

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“…A shock in the oil price would shift the SRAS to the northwest, causing a reduction in the output (thus higher unemployment) and increased in the aggregate price (inflation). During our observation period, the government increased the fuel price in 2013 and 2014 6 . Another possible source of a positive association between unemployment and inflation is the increased in the minimum wage.…”

Section: Resultsmentioning

confidence: 96%

“…Existing studies have indicated that short run fluctuation in the aggregate demand and aggregate supply will result in changes in the aggregate price level (hence, inflation). In this study, 6 In Indonesia, the fuel price is determined by the government instead of through market mechanism. 7 The average monthly minimum wage is available at https: //www.bps.go.id/linkTableDinamis/view/id/917 8 The correlation coefficient of BI rate and Nominal exchange rate is 0. we have shown that the subnational government spending absorption is low in the first and second quarter but then increases significantly in the third and last quarter.…”

Section: Conclusion and Policy Implicationmentioning

confidence: 99%

Lowering Regional Inflation? Improve Budget Absorption

Adrison¹,

Flukeria²

2016

ECON FINANC INDONES

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The subnational government spending in Indonesia exhibit a highly skewed distribution, i.e., it is very low in the first two-quarters and then increases significantly in the last two-quarters. Such explosive pattern poses two disadvantages. First, the regional output will fall below its optimal level as the low government capital expenditure leads to a fewer provision of public goods. Second, a significant increase in government spending in the later quarter pushes the short run aggregate demand to the northeast and creates an inflationary pressure in the following quarters. In this study, we analyze the effect of quarterly regional government expenditure growth on regional inflation during 2010-2014. Using Arellano Bond GMM estimation, we find government expenditure growth leads to higher inflation in the same quarter. A percentage increase in non-capital expenditure spending results in a higher inflation than a percentage increase in capital spending. Keywords: Capital Spending; Non-Capital Spending; Regional Inflation; Subnational Government AbstrakPengeluaran pemerintah daerah di Indonesia menunjukkan distribusi yang sangat timpang, yaitu sangat rendah pada dua kuartal pertama dan kemudian meningkat secara significant pada dua kuartal terakhir. Pola eksplosif tersebut menimbulkan dua kerugian. Pertama, output regional akan berada di bawah tingkat yang optimal karena pengeluaran pembangunan (belanja kapital) pemerintah yang rendah akan mengakibatkan rendahnya barang publik yang tersedia. Kedua, peningkatan belanja pemerintah pada kuartal terakhir akan mengakibatkan kenaikan permintaan agregat dan mengakibatkan tekanan inflasi pada kuartal berikutnya. Dalam studi ini, kami menganalisa dampak dari pertumbuhan pengeluaran pemerintah daerah di Indonesia terhadap inflasi daerah periode 2010-2014. Dengan menggunakan estimasi GMM Arellano Bond, kami menemukan pertumbuhan pengeluaran pemerintah daerah akan mengakibatkan inflasi daerah pada kuartal yang sama. Satu persen peningkatan belanja non-kapital mengakibatkan inflasi yang lebih tinggi dibandingkan dengan satu persen peningkatan belanja kapital.

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The Political Economy of Deforestation in the Tropics

Cited by 163 publications

References 77 publications

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

Reductions in emissions from deforestation from Indonesia’s moratorium on new oil palm, timber, and logging concessions

Lowering Regional Inflation? Improve Budget Absorption

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