Problems of public forestry and the socio-economic implications of privatisation

Public forestry administration has recently come under pressure from a number of directions, including concern over limited objectives, lack of financial accountability, and problems of bureaucratic management. One solution to these and broader government economics problems is to privatise the forestry sector. This study begins by examining some of the problems of public forestry management and concludes that it is these problems, together with a resurgence of neo-conservatism in governments, which has led to the privatisation phenomenon. A further element is the renewed emphasis on property rights in determining efficient allocation of resources. A survey of the history of the forest ownership debate reveals that both private and public forest ownership have been variously fashionable at different times. The privatisation process is briefly described and a catalogue of forestry privatisation throughout the world presented. This shows that the phenomenon is widespread and has occurred in both developed and developing countries, but with differing objectives and outcomes. Cases of forestry privatisation in New Zealand, Chile and the United Kingdom are appraised, and provide information on the implications of such policies, and of the range of problems and objections which are likely to confront governments embarking on similar programmes. The problems fall into four broad areas: ideological and related attitudes, foreign ownership issues, effects on local industry, and environmental and 'public good' impacts. Each of these is discussed and suggestions are given for overcoming some of the problems. The study concludes that privatisation will seldom, on its own, provide the best solutions to forest management problems, but that a mixture of public and private action is usually required. However, this will not necessarily follow the traditional lines of demarcation where the public sector is engaged in forest production functions and the private sector in wood processing. There is broad scope for private involvement in forest management, either via direct ownership of the resource, or with secure legal rights which mimic private ownership.