Decentralization can help reduce deforestation when user groups engage with local government

Significance

Decentralization is one of the most important innovations in environmental policy during the past 30 years. Despite the pervasiveness and large amounts of resources invested to implement these reforms, little is known about their environmental effects. Given worldwide interest in forest conservation, this lack of knowledge hampers efforts to improve the effectiveness of current policy initiatives. Using quasi-experimental methods, we find that the environmental effects of decentralization reforms depend on how the reforms affect the conditions for user groups to govern their forests. Our findings show that decentralization to general-purpose governments may be most effective in places where forest users take advantage of opportunities to engage with local politicians about forestry issues.

Abstract

Policy makers around the world tout decentralization as an effective tool in the governance of natural resources. Despite the popularity of these reforms, there is limited scientific evidence on the environmental effects of decentralization, especially in tropical biomes. This study presents evidence on the institutional conditions under which decentralization is likely to be successful in sustaining forests. We draw on common-pool resource theory to argue that the environmental impact of decentralization hinges on the ability of reforms to engage local forest users in the governance of forests. Using matching techniques, we analyze longitudinal field observations on both social and biophysical characteristics in a large number of local government territories in Bolivia (a country with a decentralized forestry policy) and Peru (a country with a much more centralized forestry policy). We find that territories with a decentralized forest governance structure have more stable forest cover, but only when local forest user groups actively engage with the local government officials. We provide evidence in support of a possible causal process behind these results: When user groups engage with the decentralized units, it creates a more enabling environment for effective local governance of forests, including more local government-led forest governance activities, fora for the resolution of forest-related conflicts, intermunicipal cooperation in the forestry sector, and stronger technical capabilities of the local government staff.