Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192177 
Year of Publication: 
1997
Series/Report no.: 
Discussion Papers No. 193
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper investigates the impact of structural adjustment policies on deforestation taking place when the agricultural frontier advances into forest reserves in Nicaragua. A computable general equilibrium model incorporating deforestation by squatters is used for policy simulations. The opportunity cost of migrating to the frontier does not simply depend on wage income opportunity, but also on market prices of basic grain which determine the capacity to consume beyond subsistence food level within a certain real wage. Reducing public expenditures both conserve forests and enhance economic growth, while showing positive distributional effects. On the other hand, a strong conservation trend following a sales tax increase is driven by increasing poverty in rural areas. Noticeably, there are policies which initially intensify deforestation, but turn out to ease the pressure on forests over time. Rapid economic growth does not ensure less pressure on forest reserves.
Subjects: 
Deforestation
structural adjustment
general equilibrium model
Nicaragua
JEL: 
C68
O54
Q23
R23
Document Type: 
Working Paper

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