Intergovernmental Fiscal Transfers, Forest Conservation and Climate Change

Intergovernmental Fiscal Transfers, Forest Conservation and Climate Change

Silvia Irawan and Luca Tacconi

Intergovernmental fiscal transfers (IFTs) are an innovative way to create incentives for local public actors to support conservation. This book contributes to the debate about how to conserve tropical forests by implementing mechanisms for reducing deforestation and forest degradation (REDD+). With Indonesia as a case study, the authors adopt an interdisciplinary approach, drawing on political science, economics, and public policy. They consider the theoretical justification, as well as the wider political and administrative context for developing the design of IFTs for conservation.

Chapter 2: Theories of decentralized forest management and fiscal decentralisation

Silvia Irawan and Luca Tacconi

Subjects: economics and finance, environmental economics, environment, climate change, ecological economics, environmental politics and policy, politics and public policy, environmental governance and regulation


The literature on decentralised forest management has paid significant attention to the administrative and political implications for forest management (Ribot et al., 2006; Larson, 2003; Tacconi, 2007; Andersson et al., 2004; Andersson, 2004; Andersson and Gibson, 2007; Andersson, 2003). Studies of decentralised forest management have focused specifically on the institutional configurations and balance of power and interactions between actors involved in, or affected by, forest management (Larson and Soto, 2008). Although fiscal incentives have been highlighted as an important condition of success, specific research on decentralised forest management and fiscal decentralisation is lacking. The literature on fiscal decentralization suggests a number of instruments for the efficient provision of public services at the local level (Bird and Ebel, 2007; Bird and Smart, 2002; Bahl and Wallace, 2007). This chapter sets out, therefore, to bring together the issues of fiscal decentralisation and decentralised forest management to understand how to design instruments that provide incentives for subnational governments to better manage forest resources.

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