The Economics of Deforestation in Eastern Africa

This paper reviews the literature on deforestation paying particular attention to its relevance to the countries of eastern Africa. Much of the conventional wisdom linking deforestation to environmental degradation does not apply in this context, due to its unique environmental situation. The author then adopts a resource economics perspective to demonstrate the financial and economic decisions made by the various actors contributing to deforestation. As is the case with numerous open access resources, no one pays attention to the overall well-being of society or the environment, not even the government. However, particularly when deforestation takes place to clear land for agriculture, deforestation may be socially beneficial. The discussion then turns to an assessment of analyses of afforestation and deforestation. While a number of studies have been carried out, few of them are consistent in their use of economic prices.