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The economics of local forest management (or another lesson in Elinor Ostrom)

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Originally posted on October 14, 2009.

 

Here are some recent results:

In the first study of its kind, Chhatre and Arun Agrawal of the University of Michigan in Ann Arbor compared forest ownership with data on carbon sequestration, which is estimated from the size and number of trees in a forest. Hectare-for-hectare, they found that tropical forest under local management stored more carbon than government-owned forests. There are exceptions, says Chhatre, "but our findings show that we can increase carbon sequestration simply by transferring ownership of forests from governments to communities".
One reason may be that locals protect forests best if they own them, because they have a long-term interest in ensuring the forests' survival. While governments, whatever their intentions, usually license destructive logging, or preside over a free-for-all in which everyone grabs what they can because nobody believes the forest will last (Proceedings of the National Academy of Sciences, DOI: 10.1073/pnas.0905308106).
The authors suggest that locals would also make a better job of managing common pastures, coastal fisheries and water supplies. They argue that their findings contradict a long-standing environmental idea, called the "tragedy of the commons", which says that natural resources left to communal control get trashed. In fact, says Agrawal, "communities are perfectly capable of managing their resources sustainably".

If you turn to the first page of the paper itself, the header reads:

Edited by Elinor Ostrom, Indiana University, Bloomington, IN, and approved September 4, 2009 (received for review July 22, 2009)

Of course this sort of result is inspired by her work as well.  For the pointer I thank Andrew Grant.

About the Author
Tyler Cowen is Holbert C. Harris Professor of Economics at George Mason University and Director of the Mercatus Center and the James M. Buchanan Center for Political Economy. He is published widely in economics journals, including the American Economic Review and Journal of Political Economy. With Alex Tabarrok he co-writes the Marginal Revolution blog, often ranked as the #1 economics blog. He is also the author of Discover Your Inner Economist (Dutton, 2007) and numerous other books on economics. He writes regularly for the popular press on economics, including for The New York Times, The Washington Post, Forbes, and The Wilson Quarterly.