Allocation of Property Rights on Forests through Ownership Reform and Forest Policies in Central and Eastern European Countries

Abstract

The study applies some concepts of the economics of property rights to the allocation of rights on forests in Central and Eastern European countries. The classification of forest assets, according to their economic characteristics and the analytical framework proposed by SCHLAGER & OSTROM (1992), are used to examine the impact of ownership reforms and policy changes on forest utilisation in the CEE region. It is shown that while reform ownership reforms deal with the formal definition of rights on forestland, new forest policies more properly define the economic rights, e.g. the owner's ability to make a profit from the assets he owns. The conclusions argue that the combination of property and liability rules, applied to ensure the procurement of environmental services, can efficiently allocate forest resources. However, the rules on forest utilisation are formulated collectively in public policy-driven decision making processes in which private forest owners are not yet able to adequately participate. Measures must be adopted to facilitate more effective participation of private land owners in political processes in order to balance the presently ongoing trends of considering forests, irrespective to the legal regime of ownership,as a common-pool resource.