The Political Economy of Decision-Making in Forestry

The use of the phrase, ‘political
economy’ originates in Adam Smith’s Wealth of Nations and is
also found in the writings of David Ricardo and Karl Marx.
What is presently understood as ‘economics’ was, at that
time, termed ‘political economy’. This was understood to
mean ‘conditions of production organization in
nation-states’ (Acemoglu and Robinson, 2012, Beuran,
Raballand and Kapoor, 2011). Venerable scholars such as
Smith, Ricardo, Mills, Rosseau, Ruskin and de Tocqueville,
took a consistently holistic view of the interaction between
economics (technical means of production) and politics
(relationships of production) in their debates on wealth,
prosperity, and international trade, and explanations of
development outcomes. However, subsequently, ‘economics’ and
‘political science’ developed along parallel tracks,
constraining us from fully exploring their interactions and
joint contribution to incomes, livelihoods and to economic
development more generally. For the forestry sector too,
when stakeholders’ power and influence is uneven, vested
interests get to control the resource, and institutions are
weak (or deliberately weakened by the same vested interests)
the result is resource plunder, institutional erosion and
breakdown of the rule of law and concentration of wealth in
a few hands. (In the next section of this chapter, specific
examples from forestry will illustrate these challenges
clearly). If we are to come to grips with the fundamentals
determining sustainable forest management, there is a need
to develop a good understanding of stakeholder interests and
the complex balance of power relationships, via political
economy analysis. Thus, the major objective of this report
is to offer preliminary guidance to conduct a practical
political economy analysis for the forest sector. The report
provides this guidance by considering eight ‘front-runner’
political economy analysis approaches that have emerged over
the last few years. In principle all are capable of being
applied to address political economy challenges in forestry
and the report develops a set of criteria, geared to
political economy considerations for forestry, which would
assist a practitioner in selecting among the available approaches.