TY - JOUR

T1 - Conservation by corruption

T2 - The hidden yet regulated economy in Nepal's community forest timber sector

AU - Basnyat, Bijendra

AU - Treue, Thorsten

AU - Pokharel, Ridish Kumar

AU - Kayastha, Pankaj Kumar

AU - Shrestha, Gajendra Kumar

PY - 2023

Y1 - 2023

N2 - Through the case of commercial timber production in Nepal's community forests, we uncover and explain how effective anti-corruption and harvest regulation have produced a kind of 'allowed' corruption that promotes forest conservation. An ethnographic study in four community forests and in-depth interviews of nearly 200 actors along the Sal (Shorea robusta) timber commodity chain showed that all actors participated in a highly organised form of collusive corruption. Anti-corruption officials call this practice "corruption without illegality" because it does not involve unauthorised harvest in community forests. Instead, it suppresses producer prices through legally required but rigged timber auctions that generate windfall profits, which sawmill owners share with upstream actors to ensure a steady supply of raw logs. Local-level timber brokers connect community forest user groups to sawmill owners. They also operate as stealth conveyers of unofficial payments to forestry officials and other upstream actors because they can camouflage such cash flows as transaction costs. Anti-corruption authorities enforce formal timber harvesting rules, which deters forestry officials from getting involved in overharvesting schemes. However, these same rules, plus some legal posturing, allow forestry officials to extract rents from legally harvested logs at minimum risk. This is hardly a coincidence because it enables the central administration to regulate difficult-to-control field-level forestry officials' behaviour without curtailing their access to informal incomes. Forest user groups lose out, but they could increase their timber income substantially by exercising their powers to decide whether or not to harvest timber. Elevating timber auction floor prices through state intervention is also feasible.

AB - Through the case of commercial timber production in Nepal's community forests, we uncover and explain how effective anti-corruption and harvest regulation have produced a kind of 'allowed' corruption that promotes forest conservation. An ethnographic study in four community forests and in-depth interviews of nearly 200 actors along the Sal (Shorea robusta) timber commodity chain showed that all actors participated in a highly organised form of collusive corruption. Anti-corruption officials call this practice "corruption without illegality" because it does not involve unauthorised harvest in community forests. Instead, it suppresses producer prices through legally required but rigged timber auctions that generate windfall profits, which sawmill owners share with upstream actors to ensure a steady supply of raw logs. Local-level timber brokers connect community forest user groups to sawmill owners. They also operate as stealth conveyers of unofficial payments to forestry officials and other upstream actors because they can camouflage such cash flows as transaction costs. Anti-corruption authorities enforce formal timber harvesting rules, which deters forestry officials from getting involved in overharvesting schemes. However, these same rules, plus some legal posturing, allow forestry officials to extract rents from legally harvested logs at minimum risk. This is hardly a coincidence because it enables the central administration to regulate difficult-to-control field-level forestry officials' behaviour without curtailing their access to informal incomes. Forest user groups lose out, but they could increase their timber income substantially by exercising their powers to decide whether or not to harvest timber. Elevating timber auction floor prices through state intervention is also feasible.

KW - Actors

KW - Anti -corruption

KW - Decentralisation

KW - Illegality

KW - RECENTRALISATION

KW - GOVERNMENTS

KW - ACCESS

KW - POLICY

KW - THREAT

KW - GUIDE

KW - POWER

U2 - 10.1016/j.forpol.2023.102917

DO - 10.1016/j.forpol.2023.102917

M3 - Journal article

VL - 149

JO - Forest Policy and Economics

JF - Forest Policy and Economics

SN - 1389-9341

M1 - 102917

ER -