Journal of Forest Economics > Vol 22 > Issue 1

Decentralization, market integration and efficiency-equity trade-offs: Evidence from Joint Forest Management in Ethiopian villages

Dambala Gelo, School of Economics, University of Cape Town, South Africa, daatu24@yahoo.com Edwin Muchapondwa, School of Economics, University of Cape Town, South Africa, Steven F. Koch, Department of Economics, University of Pretoria, South Africa,
 
Suggested Citation
Dambala Gelo, Edwin Muchapondwa and Steven F. Koch (2016), "Decentralization, market integration and efficiency-equity trade-offs: Evidence from Joint Forest Management in Ethiopian villages", Journal of Forest Economics: Vol. 22: No. 1, pp 1-23. http://dx.doi.org/10.1016/j.jfe.2015.10.003

Published: 0/1/2016
© 0 2016 Dambala Gelo, Edwin Muchapondwa, Steven F. Koch
 
Subjects
 
Keywords
JEL Codes:D02D04D23Q28
Treatment effectJFMMarket linkageDistributive effect
 

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In this article:
Introduction
The program and evaluation problem
Econometric framework
The data
Results and discussion
Conclusion

Abstract

Extant literature on Joint Forest Management (JFM) impact evaluation has concluded that it generally does not provide sufficient incentives to justify the costs that forest use restrictions impose on local people. However, there is a dearth of evidence concerning whether alternative JFM intervention with improved market linkages for non-timber forest products has similar implications. In this study, we evaluated the income and distributive effects of a JFM program in Ethiopia in which additional support was provided for improved market linkages for non-timber forest products (NTFPs). Exploiting exogenous variation in customary rights across eligible groups of communities that participate in JFM programs, as well as using heteroskedasticity-based instrumentations, we identified the income and distributive effects of the program. Our analysis shows that the program has raised the income of the households who chose to participate by approximately 400 Ethiopian Birr or 26% of per capita expenditure; that result was robust to various specifications. We also found that this effect is largely driven by marketing incentives to use non-timber forest products. However, we found that the program's benefit is biased toward the upper end of the income distribution, a result that points to the inequality-reinforcing effects of the program.

DOI:10.1016/j.jfe.2015.10.003