0.13 Natural capital: forestry  (Page 3/14)

Now consider the institution of property rights in natural, forests the “common property problem” and the inadequacy of rules of land tenure for disturbed forests. Throughout the tropics, central governments have appropriated property rights to vast areas of forest from local peoples. We noted earlier that more than four-fifths of the world’s tropical forest area is owned by governments , rather than by local people most knowledgeable about forest ecology. Central governments head-quartered in distant capital cities have proven insensitive to the economic and social benefits of maintaining the productive services of the forest. These include wood and non-wood forest products. Central governments also have almost completely ignored the protective services: regulation of run-off, control of floods, curbing of erosion and provision of animal and plant habitat in intact or lightly perturbed forests. Since central governments in many developing nations have generally lacked the means ( and often the interest) to enforce forestry regulations in remote regions, local peoples have often been powerless to resist opening up access to the forest for virtually uncontrolled exploitation. The forest then becomes an open access or common property resource, an institutional arrangement, leads to the familiar “tragedy of the commons,” a phenomenon present in the degradation of the almost all common property, including the atmosphere and the oceans, especially fisheries. Basically, the common property problem is this: what is owned by everyone is owned by no one, so that incentives to conserve and improve common property are absent or extremely weak.

Institutions of land tenure also impinge upon the tropical forest. For example, in Ecuador and Brazil destruction of natural vegetation has usually been a prerequisite for securing formal tenure in a colonized parcel. Even where property rights to the forest are well-defined and can be held by local peoples, the rights are often insecure. When property rights are insecure, owners will not make improvements or protect the soils of cleared land, why? Because if they do, there is no guarantee that they can capture the benefits of improvements.

From this discussion, we may conclude that property rights consistent with sustainable development have five features. See Malcolm Gillis, Dwight Perkins, Michael Roemer, Donald Snodgrass, Economics of Development , Third Edition, 1992, p.540-41.

They must be:

1. Well defined
2. Exclusive
3. Transferable
4. Secure
5. Enforceable

If these conditions are met, then owners can recover costs of investment made in protecting the value of the resource. So they face the right incentives .

Some tropical governments have begun to pay greater attention to the “common property” problem and to the role that well-defined and secure property rights can play in reducing deforestation. It is important, however, to note that solutions to common property problems do not necessarily imply shifting land rights in forests from governments to individuals . For example beginning in February 1990, Columbia returned land rights to half the Columbian Amazon region to local Indian tribes groups. On the other hand local tribes such as the Ashanti once had ownership of forests in Ghana. They protected it because it was theirs. But after the central government took over these property rights in sixties massive deforestation ensued.