Communal Property Rights and Deforestation

Abstract

Almost a third of the world’s forest area is communally managed. In principle, this arrangement could lead to a ‘tragedy of the commons’ and therefore more deforestation. But it may be easier to monitor outsiders’ deforestation of land owned by a community rather than an individual. We present a theoretical framework to examine these trade-offs and empirically study the effect of communal titling on deforestation in Colombia. Our empirical approach uses a differences-in-discontinuities strategy that compares areas just outside and inside a title, before and after titling. We find that deforestation decreased in communal areas after titling, especially in small communities, which is consistent with the model’s predictions. We also find evidence of positive spillovers: titling reduced deforestation in nearby areas outside the title (and thus our estimates are a lower bound of the total effects of communal titling on deforestation).