The purpose of this project is to investigate the general proposition that stable political and legal institutions are key ingredients for the secure property rights needed to induce investment in and conservation of natural resource and environmental assets. The focus of attention will be on the way tropical forests are used in developing countries and the primary goal is to assess, empirically, the importance of stable political and legal institutions to observed measures of the way these resources are used. This work will be carried out first by developing a theoretical framework that relates insecurity of tenure to the conservation incentives of private resource owners and public resource managers. Empirical analysis, based on the theoretical framework, will compare the principal hypothesis to two alternatives, that tropical deforestation and similar phenomena are caused by the process of economic growth, and that the primary cause of these outcomes is population pressure. Principal data sources have been identified to provide the information needed for the empirical work. These sources provide data of three types that are needed to examine the hypothesis of interest: (1) indicators of tropical forest and other natural resource use in developing countries; (2) measures of legal and political conditions in these countries; (3) information on social and economic conditions. Major effort will be directed to data collection and exploratory econometric analysis.
