7. Public Choice, Rent-Seeking and the Forest Economics-Policy Nexus

Although Adam Smith’s recognition of humans’ propensity to ‘truck, barter, and exchange’ was made in the context of private markets, this same propensity also applies to political markets. With the increasing recognition of, and appreciation for, the fact that forests generate multiple values, some of which are public goods, comes a strong implication that our understanding of sustainable forest management generally and forest economics specifically will be enhanced by explicitly incorporating principles of decision-making in a collective market context—public choice analysis. The self-interested behavior of politicians (elected), bureaucrats (unelected), and voluntary associations of individuals (NGOs) combined with the agency problems inherent to representative government has strong implications for the decision-making environment of private timberland owners. Unlike individuals who plant traditional row crops that are harvested after one growing season, timber growers make decisions that span (perhaps several) dozens of years. As public-ness aspects of forests increase in value, collective decisions increasingly will influence forest management generally and private decision-making by landowners. But long-term decisions made even under conditions of scientific certainty necessarily are made in a context of political uncertainty. This political uncertainty must be integrated into models of sustainable forest management.