The Complier Pays Principle: The Limits of Fiscal Approaches Toward Sustainable Forest Management

29 Pages Posted: 29 Jan 2006

See all articles by Luc Leruth

Luc Leruth

International Monetary Fund (IMF)

Remi Paris

affiliation not provided to SSRN

Ivan Ruzicka

affiliation not provided to SSRN

Date Written: March 2000

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. Far from encouraging more sustainable forest management, fiscal instruments such as an inappropriate tax policy can actually undermine it. The paper uses the arguments at the root of the Faustmann solution to draw conclusions on the incentives for sustainable tropical forest exploitation. The paper also proposes a bond mechanism as an alternative market-based instrument to encourage sustainable forest logging while reducing monitoring costs.

Keywords: Environment, Sustainable management, forestry taxation

JEL Classification: H32, Q23, Q28, R38

Suggested Citation

Leruth, Luc and Paris, Remi and Ruzicka, Ivan, The Complier Pays Principle: The Limits of Fiscal Approaches Toward Sustainable Forest Management (March 2000). IMF Working Paper No. 00/51, Available at SSRN: https://ssrn.com/abstract=879452

Luc Leruth (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Remi Paris

affiliation not provided to SSRN

No Address Available

Ivan Ruzicka

affiliation not provided to SSRN

No Address Available

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