Governance, Economic Policy, and the Environmental Kuznets Curve for Natural Tropical Forests

Abstract

"This paper reports the results of an empirical analysis of the relationship between income and the rate of deforestation of tropical natural forests. The inverted U-shaped relationship known as the environmental Kuznets curve is confirmed here when it is examined for about 60 countries from the tropical regions of Latin America, Africa, and Asia during the period 1980 to 1995. The study focuses on the role of institutions and governing factors and macroeconomic policies in the tropical deforestation process. Results indicate that the quality of governance and underlying institutions are important determinants of forest resource preservation, and that rural population pressure is not as important as suggested by other studies. Agricultural technology improvement and enhanced educational attainment and social development factors also lead to reductions of deforestation rates."