Forest Conservation - Too Much or Too Little? A Political Economy Model.

This paper studies the formation of forest conservation policy when the government is influenced by an environmental lobby and an industrial lobby representing a non-competitive forest industry. Lobbying is modelled as a common agency game which is extended to allow for asymmetries in lobbying technologies. When the forest product is exported the politically determined conservation policy always departs from the socially optimal policy in favor of the more efficient lobby. But when the forest product is destined for domestic markets conservation may ve excessive from the social point of view even though the industrial lobby has more efficient lobbying technology than the environmental lobby.