Environmental Economics and Policy Making in Developing Countries

Environmental Economics and Policy Making in Developing Countries

Current Issues

Edited by Ronaldo Seroa da Motta

The authors provide a comprehensive analysis of topics varying from the general problems of growth and conservation to specific applications such as; pollution costs, environmental taxation, deforestation and climate change. This volume also offers policymakers a comprehensive view of the challenges they face, and the legacies they leave, in order to convert environmental policy making into an actual programme of welfare improvement.

Chapter 6: Deforestation, land degradation and rural poverty in Latin America: examining the evidence

Edward B. Barbier

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics


Edward B. Barbier 6.1 INTRODUCTION The main purpose of this chapter is to provide an overview of aggregate empirical evidence of the potential links between rural poverty and resource degradation in Latin America. Recent studies suggest that there are two overall aspects of poverty–environment linkages that are critical to this relationship in developing countries (see Barbier, 1997, for a review). First, poverty may not be a direct cause of environmental degradation but instead may operate as a constraining factor on poorer rural households’ ability to avoid resource degradation or to invest in mitigating strategies. Empirical evidence suggests that poorer households in rural Latin America are more constrained in their access to credit, inputs and research and extension services necessary for investments in improved resource management (Barbier, 2000; López and Valdés, 2000). Poverty, imperfect capital markets and insecure land tenure may reinforce the tendency towards short-term time horizons in production decisions, which may bias land-use decisions against long-term resource management strategies. Consequently, a rational strategy for poor rural households with limited access to capital and alternative economic opportunities may be to extract short-term rents through resource conversion and degradation, so long as there are sufficient additional resources available in frontier areas to exploit relatively cheaply and the cost of access remains low. Second, poverty may severely constrain poor households’ ability to compete for resource access. In periods of commodity booms and land speculation, wealthier households generally take advantage of their superior political and market power to ensure...

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