Government preferences and public forest harvesting: A second-best approach

Around the world governments own forest capital stocks and can harvest them for revenue or provide public goods from preserving them. This article exa mines how government preferences for revenue generation and public goods pr ovision affect policy choices. Many instances are found where governments m ight exploit public forests at the expense of public goods. This is most li kely when budget pressures are severe, or when the government prefers reven ue generation to nontimber benefits provision. In particular, budget-constr ained governments are more likely to exploit public harvests to raise reven ues and subsidize the forest sector, especially when revenues are increasin g in public harvesting. Public harvesting should also influence tax choice. The results shed Light an current forest policy debates and can be used to predict behavior of developed and developing country governments facing ex ternal pressures.