The Impact of Corruption on Deforestation: A Cross-Country Evidence

By Koyuncu, Cuneyt; Yilmaz, Rasim | The Journal of Developing Areas, Spring 2009 | Go to article overview

The Impact of Corruption on Deforestation: A Cross-Country Evidence


Koyuncu, Cuneyt, Yilmaz, Rasim, The Journal of Developing Areas


ABSTRACT

We hypothesized that corruption could contribute to deforestation. The present study, therefore, try to identify such a relation between corruption and deforestation. By using three different corruption indices, we found a statistically significant strong positive relation between corruption and deforestation for different periods across different countries. This finding remains valid in both univariate and multivariate models. Also, the model takes the potential heteroscedasticity problem, common in cross-section studies, into account and makes correction if necessary. To our best knowledge, this study is the first cross-country study addressing to the issue by utilizing all available corruption indices, namely Corruption Perception Index (CPI), International Country Risk Guide (ICRG) index, and Business Intelligence (BI) index. Policies and measures taken towards reducing corruption, therefore, may help to decrease illegal forest activities (e.g. illegal logging and timbering, smuggling of forest products etc.) and in turn depletion of forests.

JEL Classifications: C21, O13, Q23.

Keywords: Deforestation, Corruption, Heteroscedasticity.

(ProQuest: ... denotes formula omitted.)

INTRODUCTION

Forests have environmental, economic and social importance for the quality of human life whereby they provide us with a wide range of wood and non-timber products, various environmental goods and services such as conservation of biodiversity and moderation of climate, and they play an important role in reducing poverty and hunger, and improving food security.

According to The UN Food and Agriculture Organization's (FAO) the Global Forest Resources Assessment Report 2000 (FAO, 2001a), the most comprehensive survey ever undertaken on forest resources, 30 percent of the earth's land area (or about 3.9 billion hectares) is covered by forests. Deforestation is defined as a permanent conversion of the land area covered by forests to other land uses such as wasteland, cropland and pasture. It was estimated that the original forest cover was approximately 6.0 billion hectares (Bryant et. al., 1997). Thus, estimates indicate that the world has lost about 40% of forest area.

Even though the land area covered by forests has been shrinking for centuries, forest depletion has reached to alerting levels particularly since the second half of the 20th century as a result of human exploitation. Rowe et. al. (1992) estimated that 15 per cent of the world's forests were converted to other land uses between 1850 and 1980. Between 1990 and 2000, 9.3 million hectares of the world's forests were deforested. Deforestation mainly took place in Africa and South America. Between 1990 and 2000, all regions in the world lost some forest cover in various degrees, except Europe as shown in Table 1.

Some countries have lost their forests in the second half of the 20th century. For example, Haiti has lost 90% of its forests recently. Bryant et. al. (1997) identifies 76 countries having lost their all frontier forests (i.e. they have lost their undisturbed, biologically-intact forests) as a result of deforestation due to human activities.

Most of the deforestation takes place in relatively few countries. The most deforesting 10 countries account for 8.1 million hectares or about 86 per cent of all of the annual forest lost during the period 1990 and 2000 (see Table 2).

In addition to the most deforesting 10 countries, there are other countries that have experienced very high annual rates of deforestation (see Table 3). The accelerated destruction of forests at rates more than 3 percent per year in some developing countries has received growing attention from the media, foresters, geographers, environmentalists, economists, and other social scientists. Accordingly, there have been remarkable efforts to identify the determinants of deforestation in the literature. Some of those identified causal factors are; population growth (Cropper & Griffiths, 1994; Ehrhardt-Martinez, 1998), demand for agricultural land (Myers, 1994), commercial logging (Capistrano, 1994), natural causes (e.

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