Why the American West was not as wild as the Brazilian Amazon Forest? The Development of Institutions

Whether people fight over valuable resources or engage in cooperation and trade depends on how well property rights are defined and enforced. We aim to describe the development of institutions in the Brazilian Amazon forest. The question that drives our study is why the local institutions have not been efficient in preventing deforestation and illegal logging. This exploratory research uses secondary and primary data. We argue that individuals and groups in the Amazon region could not successfully make rules for establishing rights and resolve disputes due to the weak definition and enforcement of property rights and monitoring. Regarding definition of rights, the highly politicized process of land allocation, top-down policies, and the presence of squatters increase the uncertainty of land titles. Cooperation and enforcement is difficult due to cultural differences influencing individuals ‟ and groups ‟ preferences. The physical characteristics of the forest obstruct monitoring and the climate conditions frequently blocks the view of sophisticated monitoring technology. This also impedes communication among communities and traffic in the region. Contrary to the American West, the Amazon forest has been with law and under-developed informal institutions that are not efficient in preventing deforestation, prevailing lawless