Do Property Rights Promote Investment but Cause Deforestation? Quasi-Experimental Evidence from Nicaragua

By Zachary D. Liscow. 2013

122 citations recorded by the source corpus.

Many policymakers argue that property rights decrease deforestation. Some theoretical papers also make this prediction, arguing that property rights decrease discount rates applied to a long-term investment in forestry. However, the effect is theoretically ambiguous. The paper takes a novel instrumental variables approach based on Nicaragua's agrarian reform to test for the effect, using a new dataset—Nicaragua's 2001 agricultural census. It finds that property rights significantly increase deforestation. The model, supported by the data, suggests a likely mechanism for this relationship: property rights increase investment, increasing agricultural productivity and therefore the returns to deforestation.

Subfields: Economics and Econometrics, Global and Planetary Change, Soil Science

View Paper: https://www.semanticscholar.org/paper/9cc15852d281bac146219b429fac9c1639f20a79

Citations in the corpus

• Land property rights, agricultural intensification, and deforestation in Indonesia (2018, unknown): “The available literature on the links between land property rights and deforestation focuses primarily on the effects of secure tenure for forest land (Araujo et al., 2009; Damnyag et al., 2012; Liscow, 2013; Robinson et al., 2014).”