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Local Government Forestry Expenditure and Forest Land Cover: A Preliminary Lesson from Decentralized Indonesia

Author

Listed:
  • Firda Hidayati

    (Faculty of Administrative Science, Brawijaya University)

  • Yogi Vidyattama

    (Institute of Governance and Policy Analysis, University of Canberra)

  • Cameron Gordon

    (Faculty of Business, Government and Law, University of Canberra)

Abstract

Even though government of Indonesia invests billions of rupiah to tackle deforestation, its effectiveness has been questionable. This study analyses changes in rates of forest cover in Indonesia and their association with forestry expenditures (FE) spent by the provincial governments. Based on 2007 to 2010 data, linear multiple regression results indicate that FE is not enough to tackle the negative change in forest land cover that could represent deforestation. Moreover, it was found that FE have negative association with forest land cover and therefore, can be associated to deforestation. This negative association remains when other factors that affect forest land cover such as wood extraction, agriculture outcome, forestry outcome, population growth and population density and initial environmental conditions have been controlled.

Suggested Citation

  • Firda Hidayati & Yogi Vidyattama & Cameron Gordon, 2016. "Local Government Forestry Expenditure and Forest Land Cover: A Preliminary Lesson from Decentralized Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 62, pages 127-140, December.
    • Handle: RePEc:lpe:efijnl:20160
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    More about this item

    Keywords

    Deforestation; Tropical Forest; Population; Forest Cover; Reforestation Expenditure;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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