Royalty systems, government revenues, and forest condition: an application from Malaysia.

摘要

Royalty structure has been linked to deforestation through non-sustainable harvesting and high grading. Yet, royalties are important rent generation mechanism for governments. In this paper, a dynamic model of government policy choice is used to compare different royalty systems with respect to government revenue generation and high grading. Empirical analysis of the various royalty systems is then undertaken for forest concessions in Sabah, Malaysia. One unique aspect of our study is an examination of how different royalty systems impact harvesting of high- and low-valued timber species, government rent capture, and concessionaire profits. The results should help with future royalty design.