Monash University
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The Allocation of Forest Functions and Forest Conflicts: A Case Study on Sarawak, Malaysia

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journal contribution
posted on 2017-06-08, 02:19 authored by Lee, Poh
This paper argues that conflicts in the use of forests can be seen as an issue of resource allocation. An analytical framework is adapted from existing literature in property rights and public choice theory to examine and explain this situation. This approach stresses that the root cause of conflicts is due to forests being multi-functional with some non-complementary uses; and that the signalling of information and incentives are incomplete to coordinate or allocate the use of the various forest functions in a manner that considers the concerns of all interested groups. This arises because of a lack of comprehensive specification (definition and enforcement) of property rights. If property rights have been well defined (right to use, right to fransfer, right to exclude, and right to appropriate income) and enforced for each forest function, then information on the value of each function and the incentive to consider the impact of the use of a particular forest function on other functions will be signalled to guide the overall allocation of forests. However, there are barriers to the complete specification of rights. These lie in the costs of defining, monitoring, and enforcing rights to each forest function, and of penalising offenders who violate these rights. Costs arise due to the inherent characteristics of the forest function (non-excludability and nonrivalry) and may make complete specification infeasible due to the trade-off between greater specification and higher costs. Nevertheless, there have been instances when rights were not defined and enforced even when specification costs were low; this then leads to an examination of the political choices made by the state. In these situations, political costs of defining and enforcing property rights need to be identified: there is a need to scrutinise the incentives faced and the economic rationality behind decisions made by the state in adopting a certain stance in the specification of rights. The state makes decisions by considering political benefits against costs (which may be generated from the various interest groups' reaction and loss of patronage support). In turn, collective action from the various interest groups to lobby for modifications in rights specification is spurred by changes in its benefit-cost calculus emanating from shifts in the value of the forest function in question.


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Department of Economics.

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