Forests Sourcebook - HCV Resource Network

immediate causes of deforestation and includes the parameters
that influence an agent’s decisions, such as prices, technology,
institutions, new information, and access to services
and infrastructure. The next level addresses the underlying
causes of deforestation. These are the broader forces that
determine the decision parameters and include the macroeconomic
variables and policy instruments.
The temporal factor. In the case of large-scale policy
lending, the temporal factor also comes into play: The
impact of large economic and other changes that affect
forests may take a considerable number of years to become
evident at the field level in forests—long after disbursements
under a policy loan or policy intervention that may
have been a factor in the changes have been completed.
Annex 6A to this chapter illustrates the temporal dimension
of the potential impact of energy sector reform on forests.
Country context. Recent efforts to assess cross-sectoral
impacts have not been able to demonstrate an empirical
connection between macroeconomic structural adjustment
programs and deforestation (Pandey and Wheeler 2001).
Because of the complexity of the issues, the indirect nature
of many of the causal relations, and the wide diversity of situations,
any attempt to generalize is inherently difficult. The
study by Pandey and Wheeler (2001) suggests that the
impacts of structural adjustment on forests could vary by
country and may be related to the nature of their forest
resource. Sedjo (2005) suggests that a country with a comparative
advantage in forestry (usually a forest-rich country)
that is already exporting forest products could see
increased forest products exports in response to structural
adjustment. In contrast, the forest sector in a country without
a comparative advantage in timber production may face
limited changes in response to structural adjustment. The
World Bank publication on DPL and Forest Outcomes
(2005) suggests that other country characteristics may also
shape how macroeconomic reforms influence forest
resource use and management.
Importance of poverty. Poverty issues must also be
directly considered when assessing cross-sectoral impacts
(see also chapter 1, Forests for Poverty Reduction, and associated
notes). In addition to their role in underpinning environmental
stability, forests play a direct role in poverty
alleviation—the primary objective of World Bank involvement.
It is evident from the World Bank’s own assessment of
this situation, as laid out in the revised Forests Strategy
(World Bank 2004a), and from anecdotal evidence, field
experience, and other studies and articles, that forests are
extremely valuable to the livelihoods of large numbers of
poor people.
The forests most subject to competition for the various
forms of use and conversion that can arise from macroeconomic
and other exogenous developments are often those of
importance to significant numbers of rural poor. These will
be forests located at the margins of current agricultural and
other land-using developments, where the poor have tended
to congregate because they have reduced access to other
rural areas and production assets.
More systematic analysis and knowledge on the nature
and level of dependence of these people on the forests for
subsistence and income generation needs to be developed.
Positive impacts on forests from macroeconomic
reforms. Discussions of cross-sectoral impacts tend to
focus, as this one has, on the avoidance of inadvertent harm
because of the reputational risks and transaction costs
involved. However, the literature is inconclusive regarding
the directionality of the relationship. Some studies have
found that structural adjustment can have negative outcomes
and create pressure on the environment and forests
(Angelsen and Kaimowitz, 1999; Sunderlin et al. 2000).
Other studies have found ambiguous results, or in some
cases, positive outcomes for income and environmental
benefits (Gueorgieva and Bolt 2003; Munasinghe 2001).
Elements could potentially be identified to be included in
policy lending and large cross-sectoral programs that could
bring about positive outcomes for forests and forestdependent
people (Wunder 2003; box 6.3). For example,
macro policy changes can be oriented toward creating an
environment conducive to private sector engagement. If
linked with community initiatives, such changes could
enable community-company partnerships and create
employment for forest-dependent households.
Irreversibility. The well-known asymmetry in the forestloss
dynamic adds urgency to the need to address crosssectoral
impacts. In agriculture, or more generally, for economic
development and social programs, poor outcomes
from a given set of policy changes can be identified through
monitoring and, in most cases, corrected within a reasonable
time. In forests, however, impacts causing loss of forests
or woodlands, and watersheds that depend on this form of
vegetation, usually cannot be ameliorated so easily.
Evolving policy instruments. Policy instruments are
beginning to change, putting more emphasis on financial
CHAPTER 6: MAINSTREAMING FORESTS INTO DEVELOPMENT POLICY AND PLANNING 207