Timber Booms and Institutional Breakdown in Southeast Asia

Timber Booms and Institutional Breakdown in Southeast Asia

Timber Booms and Institutional Breakdown in Southeast Asia

Timber Booms and Institutional Breakdown in Southeast Asia

Synopsis

In this book, Michael L. Ross explores the breakdown of the institutions that govern natural resource exports in developing states. Using case studies of timber booms in Indonesia, Malaysia, and the Philippines, he shows that these institutions often break down when states receive positive trade shocks--unanticipated windfalls. Drawing on the theory of rent-seeking, he suggests that these institutions succumb to a problem he calls "rent-seizing"--the predatory behavior of politicians who seek to supply rent to others, and who purposefully dismantle institutions that restrain them.

Excerpt

This book grew out of my dissertation, which in turn reflected my concern about tropical deforestation in Southeast Asia. In 1994 I visited the region's leading timber-exporting states — the Philippines, Indonesia, and Malaysia — to learn more about their forests and forestry policies. Unlike some observers, I believed that these governments were wise to authorize logging on at least a limited scale, and to convert a portion of their forests into agricultural land. The United States had done much the same thing in an earlier era, using its abundant forests to spur development; why should not developing states today make a similar choice?

I was initially impressed by the forest policies of these three states — or, rather, four states, since in Malaysia forest policies are made at the state level, and most of Malaysia's timber came from the autonomous states of Sabah and Sarawak on the island of Borneo. I was also struck by the dedication of many of their foresters. Yet I gradually realized that the policies of their forestry departments were systematically ignored by politicians, particularly when it came to distributing timber concessions. As a result, these governments had at times authorized logging at rates far above the sustained-yield level, even in forests that were ostensibly set aside for “sustainable” forestry. The story began to make sense only after I uncovered documents — including previously confidential reports from the archives of the U. N. Food and Agriculture Organization (FAO) in Rome — that showed evidence of fierce internal struggles in these states between forestry officials, who sought to protect the institutions and policies of sustained-yield logging, and the politicians who sought to dismantle them. Almost invariably, the politicians won.

My dissertation chronicled the policy failures of the four governments, and drew on the new institutional economics and the theory of patronclient relations to help explain them. My advisors and colleagues seemed . . .

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