Timber Booms and Institutional Breakdown in Southeast Asia

By Michael L. Ross | Go to book overview

3
Explaining Institutional Breakdown

Why do windfalls lead to policy failures? Since the 1950s, scholars have offered two types of explanations: cognitive explanations, which suggest that windfalls induce either laziness or euphoria among policymakers; and societal explanations, which suggest that windfalls encourage nonstate actors — such as interest groups, political clients, and rent seekers — to demand a share of the windfall from the state.

This chapter begins by summarizing these two approaches. It then describes my own explanation, which is that resource booms lead to rent seizing by state actors. It explains some of the assumptions behind the concept of rent seizing, how it may hurt institutions, how it differs from other types of rent seeking, and how it is influenced by a state's regime type. The chapter concludes by explaining how and why I use the cases of the Philippine, Malaysian, and Indonesian timber sectors to illustrate my argument.


COGNITIVE EXPLANATIONS FOR WINDFALL
POLICY FAILURES

Cognitive approaches suggest that windfalls produce a type of myopia among public or private actors, which in turn leads to institutional or policy failures.1 Some observers imply that windfalls lead to myopic

____________________
1
Pieces of the cognitive argument — that an abundance of natural resource wealth can make citizens lazy or short-sighted — can be found in the major works of Machiavelli, Montesquieu, Adam Smith, and John Stuart Mill. Perhaps this view was stated most pungently by Jean Bodin in Six Books of a Commonwealth, who explains that

men of a fat and fertile soil, are most commonly effeminate and cowards; whereas contrariwise a barren country makes men temperate by necessity, and by consequence careful, vigilant, and industrious. (Bodin 1967 [1606], V:I)

-29-

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Timber Booms and Institutional Breakdown in Southeast Asia
Table of contents

Table of contents

  • Title Page *
  • Contents *
  • Illustrations x
  • Tables xi
  • Preface xiii
  • 1 - Introduction Three Puzzles 1
  • 2 - The Problem of Resource Booms 8
  • 3 - Explaining Institutional Breakdown 29
  • 4 - The Philippines the Legal Slaughter of the Forests 54
  • 5 - Sabah, Malaysia a New State of Affairs 87
  • 6 - Sarawak, Malaysia an Almost Uncontrollable Instinct 127
  • 7 - Indonesia Putting the Forests to “better Use” 157
  • 8 - Conclusion Rent Seeking and Rent Seizing 190
  • References 209
  • Index 229
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