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IMF Staff Papers Logo last updated: December 2001
Volume 48, Number 2
The Complier Pays Principle: The Limits of Fiscal Approaches Toward Sustainable Forest Management
By Luc Leruth, Remi Paris, and Ivan Ruzicka

Full Text of this Article (PDF 132 K)

Abstract: This paper examines the role and impact of taxation on sustainable forest management. It is shown that fiscal instruments neither reinforce nor substitute for traditional regulatory approaches and can actually undermine sustainability. The paper uses the reasoning at the root of the Faustmann solution to draw conclusions on the incentives for sustainable tropical forest exploitation. It proposes a bond mechanism as an alternative market-based instrument to encourage sustainable forest logging while reducing monitoring costs. [JEL Q23, H39]

2001 International Monetary Fund