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Public spending, credit and natural capital: Does access to capital foster deforestation? par J-L.Combes, P.Delacote, P. Combes Motel et T.Urbain Yogo

Publié le 04 mai 2018

Only available in English.

Publication de l’article «Public spending, credit and natural capital: Does access to capital foster deforestation?» par Jean-Louis Combes, Philippe Delacote, Pascale Combes Motel et Thierry Urbain Yogo dans la revue Elsevier.

Vol 71, Avril 2018

https://doi.org/10.1016/j.econmod.2018.04.006

 

Improving access to man-made capital through domestic credit and public spending is a step towards development. Developing countries rely also on natural capital, which may generate possible conflicts between environment and development targets.

Taking the case of land-use and deforestation, this paper revisits the links between man-made and natural capital. Relying on a model of income maximization, we theoretically assess how better access to man-made capital through public spending and credit, influences forest cover loss. Econometric investigations, over the period 2001–2012, show that forest cover loss is positively influenced by credit and public spending.

A better access to capital is thus detrimental to the forest.

This can be interpreted as a Tinbergen rule: the development objective of facilitating access to man-made capital cannot be tackled without facing the objective of environmental protection.

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