Roots for Good Forest Outcomes: An Analytical...

Transparency, Accountability

and PublicParticipation

Qualityof Forest

Administration

Coherenceof Forest

Legislationand Rule

of Law

Stabilityof Forest

Institutionsand Con�ict

Management

Economic E�ciency,Equity and Incentives

Extentof forest

resources

Biological diversity

Forest health and

vitality

Productive functionsof forest

resources Protective functionsof forest

resources

Legal,policy and

institutional framework

Socio-

economic functions

Roots for Good Forest Outcomes:An Analytical Framework for Governance Reforms

REPORT NO. 49572-GLB

Agricultural & Rural Development DepartmentWorld Bank1818 H Street, N.W.Washington, D.C. 20433http://www.worldbank.org/rural

THE WORLD BANK

AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT

Roots for Good ForestOutcomes: An AnalyticalFramework forGovernance Reforms

Report No. 49572-GLB

fore_i-xvi_fm.qxd 8/17/09 6:56 PM Page i

© 2009 The International Bank for Reconstruction and Development / The World Bank1818 H Street, NWWashington, DC 20433

Telephone 202-473-1000Internet www.worldbank.org/ruralE-mail [email protected]

All rights reserved.

This volume is a product of the staff of the International Bank for Reconstruction andDevelopment/The World Bank. The findings, interpretations, and conclusions expressedin this paper do not necessarily reflect the views of the Executive Directors of The WorldBank or the governments they represent. The World Bank does not guarantee the accuracyof the data included in this work. The boundaries, colors, denominations, and otherinformation shown on any map in this work do not imply any judgment on the partof The World Bank concerning the legal status of any territory or the endorsement oracceptance of such boundaries.

The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. TheInternational Bank for Reconstruction and Development/The World Bank encouragesdissemination of its work and will normally grant permission to reproduce portions ofthe work promptly.

For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470,http://www.copyright.com/.

All other queries on rights and licenses, including subsidiary rights, should be addressedto the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433,USA, fax 202-522-2422, e-mail [email protected].

Cover photo illustration: Jean-Michel Gillet

fore_i-xvi_fm.qxd 8/18/09 9:08 PM Page ii

A C K N O W L E D G E M E N T S v

A B B R E V I AT I O N S A N D A C R O N Y M S vii

E X E C U T I V E S U M M A RY ixIn a Nutshell ixStylized Facts and Broad Rationale for the Study ixChallenges to Improving Forest Governance xA Comprehensive Forest Governance Framework xToward Implementation xi

I N T R O D U C T I O N xiii

Impacts of Poor Governance and Global Efforts at Improving its Quality 1

Overall Effects of Poor Forest Governance 1Environmental Impacts 1Poverty Reduction and Social Impacts 2Economic Impacts 3

Track Record of Improving Forest Governance: Achievements Have Been Significant but Much More is Needed 3

Rationale for this Report: Gaps in Understanding the Forest Governance Challenge 5

Building a “Big-Picture” Framework for Forest Governance 7

Describing and Measuring Governance 9Conceptual Definitions of Overall Governance 9What Is “Good Governance”? 10Operational Definitions of Governance: Criteria and Indicators 10

Input, Output, Outcome, and Actionable (Governance) Indicators 11

Examples of Initiatives on Overall Governance Indicators 12Transparency International’s Corruption Perception Index 12The Global Integrity Index 12

2

1

Contents

iii

fore_i-xvi_fm.qxd 8/18/09 9:16 PM Page iii

The World Bank’s Country Policy and Institutional Assessment 12The World Bank Institute’s Aggregated Governance Indicators 13

Lessons from the Literature Review on Overall Governance Indicators 13Highly Aggregated Indicators Provide Useful Information 13An Indicator’s Form Must Follow its Intended Use 14Useful Measures of Governance Are Often Subjective 14Indicators Will Often Require New Data 14

Examples of Initiatives on Forest Governance Indicators 14The International Tropical Timber Organization 15International Institute for Environment and Development 15Criteria and Indicators for the Conservation and Sustainable

Management of Temperate and Boreal Forests: The Montréal Process 16

Center for International Forestry Research 17Chatham House Initiative 18The World Resources Institute Indicators 19

Lessons from the Review of the Literature on Forest Governance 19A Holistic Approach to Forest Governance is Missing 19Governance Aspects Need to be Aligned to Forest Sector

Development Objectives 20Economic Aspects of Forest Governance Need Greater Focus 20Actionable Governance Indicators Should be Highlighted 20Overall Governance Indicators Complement Sector-Specific

Indicators 20

Constructing a Comprehensive and Operational Framework for ForestGovernance 21

Building Blocks of Forest Governance 21Principal Components and Subcomponents 22

Building Blocks of Forest Governance: Details 22Transparency, Accountability, and Public Participation 22Stability of Forest Institutions and Conflict Management 23Quality of Forest Administration 26Coherence of Forest Legislation and Rule of Law 27Economic Efficiency, Equity, and Incentives 28

Findings, Recommendations, and Next Steps 33What Next? 35

Annex 1:Additional Properties of Governance Indicators 37

Annex 2:The Five Building Blocks of Forest Governance

and Their Components: An Indicative List 39Annex 3:

Dissemination Plan and Budget 43

Bibliography 45

4

3

Contents

iv

fore_i-xvi_fm.qxd 8/18/09 9:23 PM Page iv

This report was produced by the following team: Nalin Kishor (TaskTeam Leader and Senior Natural Resources Economist, SustainableDevelopment Network [SDN]), Tuukka Castren (Senior ForestrySpecialist and FLEG Task Team Leader, SDN), Evelyn Namubiru-Mwaura (Consultant), and Kenneth Rosenbaum (Consultant). Inpreparing this report the team benefited greatly from detailed inputsfrom the peer reviewers: Grant Milne (Senior Natural ResourcesManagement Specialist, South Asia Agriculture and RuralDevelopment [SASDA]), Colum Garrity (Public Sector Specialist,Public Sector Governance [PRMPS]), and Kieran Kelleher (SeniorFisheries Specialist, Agriculture and Rural Development Department[ARD]). Gerhard Dieterle, Forests Advisor, provided critical insights,suggestions, and support at all stages of the work. In addition, the fol-lowing gave valuable comments: Diji Chandrasekharan Behr, AnneDavis Gillet, Neeta Hooda, Marjory-Anne Bromhead, Gernot Brodnig,Klas Sander, Nwanze Okidegbe, Mikko Ollikainen, Charles Kenny,Charles di Leva, William Magrath, Edgardo Maravi, Peter Dewees,and Jessica Mott.

This work was done under the general guidance of Mark Cackler,Sector Manager (ARD), and Juergen Voegele, Sector Director (ARD).

The team is grateful for financial support for this work from theFLEG Trust Fund (TF053912), funded by the European Commission(EC) and Department for International Development (DFID), and forWorld Bank budget support from the ARD work program.

Acknowledgements

v

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page v

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page vi

vii

AGIs Actionable Governance IndicatorsARD Agriculture and Rural Development DepartmentBB Bank BudgetCAS Country Assistance Strategy CIFOR Center for International Forestry Research CPI Corruption Perceptions Index CPIA Country Policy and Institutional Assessment DC Deputy Commissioner DFO Divisional Forest Officer DI Department of Inspection EC European Commission ECA Europe and Central AsiaESW economic and sector work EU European Union FCMO Forest Crime Monitoring Office FCMR Forest Crime Monitoring and Reporting Unit FLEG Forest Law Enforcement and Governance FSC Forest Stewardship Council GDP gross domestic product GFI Governance of Forests Initiative GHG greenhouse gas ICV Instituto Centro de Viva IFM independent forest monitors IIED International Institute for Environment and

DevelopmentIMAZON Instituto do Homem e Meio Ambiente da AmazoniaITTO International Tropical Timber Organization IUCN International Union for Conservation of Nature LEB log export banM&E monitoring and evaluation MFPCs Multi-Sectoral Forest Protection CommitteesMP Montréal Process NGOs nongovernmental organizations NTFPs non-timber forest products ODA overseas development assistance PEFC Programme for the Endorsement of Forest CertificationPETS public expenditure tracking system REDD reduced emissions from deforestation and degradation SDN Sustainable Development NetworkSFM sustainable forest management

Abbreviations andAcronyms

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page vii

Abbreviations and Acronyms

TF Trust FundTFD The Forests Dialogue TI Transparency International UNDP United Nations Development Programme VPA Voluntary Partnership Agreement WRI World Resources Institute

viii

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page viii

ix

IN A NUTSHELLPoor governance is a major impediment to achieving develop-ment outcomes of the forest sector. It results in losses of income,employment, government revenues, and local and global envi-ronmental services. However, at present, no comprehensiveguide to reforming forest governance has been developed.Although usually it is relatively easy to recognize that the for-est sector in a country is failing to deliver all its potential bene-fits, the lack of an appropriate analytical framework makes itmuch harder to identify the major shortcomings and to proposea fitting response. This economic and sector work (ESW) is thefirst step in creating a reformer’s tool to diagnose forest gover-nance weaknesses and pinpoint appropriate reforms.

STYLIZED FACTS AND BROAD RATIONALEFOR THE STUDYConsider a reform-minded Minister of Forestry in a developingcountry where forests are a notable resource for rural liveli-hoods, commercial extraction, harvesting of non-timber forestproducts (NTFPs), biodiversity conservation, and carbon se-questration. The Minister is committed to ensuring that the for-est sector in her country is well managed and is able to yield thedesired development outcomes. At the same time the Ministeris aware that the sector is not as well managed as it should be.

A preliminary assessment of the situation makes it clear thatthe main challenge is in the way the resource is governed. Thisis demonstrated by widespread illegal logging and trade inwood products and wildlife, corruption and bribery, land grab,and encroachment, and the sector is contributing much less tothe gross domestic product (GDP) and government revenuesthan one should expect. At the same time, the country is seriousabout implementing Reduced Emissions from Deforestationand Degradation (REDD), but poor governance could stand inthe way.

There is a need to identify the underlying causes for poorgovernance and fix those. However, the Minister is much lesssure about what to do next. The international experience show-cases specific actions, but it does not offer explicit guidance on

Executive Summary

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page ix

Executive Summary

x

picking the most appropriate action in a specificcountry context. A big issue that she is grapplingwith is: What constitutes forest governance, andhow can I identify appropriate reforms in the rightsequence?

The Minister considers this to be a complicatedtask. Poor governance and corruption are foundnot only in the forest sector but across the economy,and they cannot be fixed just like that. In order tomake progress, the governance challenge in theforestry sector needs to be broken down into somemanageable tasks, allowing time for their imple-mentation and for impacts to be realized. It also be-comes obvious that the first critical step is to definethe dimensions and scope of forest governance ascarefully as possible. In addition, the Minister real-izes that governance is not shaped by her govern-ment alone. Several stakeholders (forest dwellers,local communities and landowners, private sector,etc.) can lay claim to the resource and have a handin its use and overall management. Through par-ticipation and inclusion of the interests of legiti-mate stakeholder groups in the decision-makingprocess, the Minister has to ensure that the highest-priority reforms are identified, that the risk ofinterest group capture is minimized, and thatthe probability of successful implementation ismaximized.

Based on a set of building blocks, this study cre-ates a framework that will help analyze the gover-nance challenge for the sector. Concomitantly thisframework provides a tool whereby stakeholderconsultation and consensus building can befacilitated.

CHALLENGES TO IMPROVINGFOREST GOVERNANCEForests, whether they are tropical, temperate/boreal, or woodland, etc., are complex ecosystemsand provide multiple products, benefiting manystakeholders. Forests provide private goods forcommercial trade (e.g., round wood, some NTFPs,and tourism services), private goods for subsis-tence use (e.g., many NTFPs, fodder, fuel wood andconstruction poles, medicinal plants), local publicgoods (e.g., watershed management and soilconservation), and global public goods (e.g.,biodiversity and carbon sequestration). In addi-tion, forestland often has potentially valuablealternative uses such as for agricultural and pas-ture and for plantations (e.g., rubber or oil palm).

Ensuring sustainable forest management (SFM),typified by balancing multiple uses among manydifferent users, rests critically on high-quality gov-ernance for the sector. Yet there are significant gapsin our knowledge and in our readiness to identifyand plan reforms to improve the governance of thesector. This report identifies three interconnectedreasons for this. First, governance is a broad term,embracing a varied set of actors and factors, withcomplex interrelations. Unless these complexitiesare properly understood, reform programs will notbe successful. Second, there have been few at-tempts to merge the academic efforts with the fieldexperience, to accelerate learning and developmentof practical approaches. This has created what thisreport calls a problem of the “missing middle.”This is demonstrated by the lack of any notion of abig-picture approach covering crucial aspects offorest governance. Third, governance reforms cre-ate losers and gainers. The former block reform ef-forts whereas the latter would be supportive. Forobvious reasons politicians are unwilling to take“hard” decisions, and the political will required toinitiate and sustain reforms is usually lacking.Thus, there is a need to better understand the po-litical economy of reform processes, underpinnedby stakeholder analysis.

A COMPREHENSIVE FORESTGOVERNANCE FRAMEWORKThis ESW argues that the above challenges are bestaddressed by carrying out an in-depth diagnosis offorest governance through a comprehensive frame-work. A detailed review of the available literatureand ongoing initiatives established that no suchframework is currently available. The main contri-bution of this report is to provide such a frameworkfor analyzing forest governance and improvingcountries’ capacity to understand critical gover-nance issues.

The framework was constructed based upon anextensive literature review complemented with ex-pert opinions. This provided a large collection of“elements” comprising forest governance. It alsopointed to a need: (i) to focus on governance indi-cators as a way to transform governance elementsinto a practical framework; (ii) to give greaterconsideration to economic elements as they im-pinge heavily on the “traditional” elements of for-est governance; and (iii) to develop actionableforest governance indicators. The literature review

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page x

Building Blocks for Good Forest Outcomes

xi

also demonstrated that governance can be ana-lyzed from various perspectives (e.g., impact onpoverty, economic development, and carbon se-questration and REDD), which should be accom-modated into the overall framework.

The governance framework is underpinned byfive building blocks, which are envisaged to coverall dimensions of forest governance. In seekingpracticality, the report split the five building blocksinto principal components and their subcompo-nents. The forest governance elements availablefrom the review of the literature and expert opin-ions were used to develop the appropriate set ofprincipal components and subcomponents (seetable below for a compact version of the proposedframework, and Annex 2 for the detailed frame-work with subcomponents).

Specific advantages to constructing a compre-hensive framework such as this include:

• Developing a common and comprehensiveunderstanding of the nature and scope of for-est governance among various stakeholdersand measuring and compiling a baselinesituation of forest governance

• Addressing the “missing middle” problem toimprove understanding of the real drivers ofillegality and poor governance (includingthose originating from outside the forest sec-tor) and to mainstream governance issuesinto SFM approaches

• Formulating targeted and actionable inter-ventions to improve forest governance and to

make informed choices regarding reformpriorities

• Better understanding of the political economychallenge, including identifying governancecomponents and actions that strengthen thedemand for good governance

• Fostering stakeholder participation towardbuilding a strong consensus for reforms

• Designing reforms that have a high chance ofsuccess, and identifying indicators to measuretheir progress

• Enabling identification of sector-specific andbroader governance issues and promoting themainstreaming of forest governance concernsinto the broader governance and anticorrup-tion agendas of the World Bank and otherdevelopment agencies

TOWARD IMPLEMENTATIONThe framework developed in this approach is onlythe beginning of a process. However, it provides theessential foundation for developing (through sub-sequent field testing and empirical validation) a for-est governance diagnostics tool. Dissemination ofthis report will be a priority to create awareness andbuild consensus for the proposed approach to gov-ernance analysis. A dissemination plan is includedin Annex 3 of this report.

The second step would consist of field testingthis conceptual framework under country-specificsituations, including their specific objectives, anddeveloping the diagnostics for a number of

The Building Blocks of Forest Governance and Their Principal Components

Transparency, Accountability, and Public ParticipationTransparency in the forest sectorDecentralization, devolution, and public participation

in forest managementAccountability of forest officials to stakeholdersAccountability within the forest agencies

Stability of Forest Institutions and Conflict ManagementGeneral stability of forest institutionsManagement of conflict over forest resources

Quality of Forest AdministrationWillingness to address forest sector issuesCapacity and effectiveness of forest agenciesCorruption control within the forest sectorForest monitoring and evaluation (M&E)

Coherence of Forest Legislation and Rule of LawQuality of domestic forest legislationQuality of forest law enforcement Quality of forest adjudicationProperty rights recognized/honored/enforced

Economic Efficiency, Equity, and IncentivesMaintenance of ecosystem integrity: sustainable

forest useIncentives for sustainable use and penalties for

violationsForest products pricingCommercial timber trade and forest businessesEquitable allocation of forest benefitsMarket institutions Forest revenues and expenditures

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page xi

Executive Summary

xii

countries. Particular emphasis will be given tocountries participating in REDD programs andthose with significant land-tenure issues. Theframework is generic in that it can be readilyapplied to all forest types (tropical, boreal, dry-lands, miombo, etc.) in a large number of countries.It is possible to develop the subcomponents of thefive building blocks into individual indicators,which experts familiar with forest governanceissues can adapt to country-specific circumstancesand assign a rating. This enables benchmarking thestate of governance in a country and identificationof priority areas requiring reforms. In turn, thiswould allow for a comprehensive assessment(“diagnostics”) of the state of forest governance inthat country and identification of the strengths and

weaknesses of the system and also the scope ofreforms necessary to improve governance in thecountry.

The third and final step will consist of produc-ing a forest diagnostics toolkit. Step 3 will be basedon the field experiences, additional expert inputs,and stakeholder consultations from different coun-tries gathered in Step 2 of the process.

In conclusion, it is important to reemphasize thatthe scope of this report is restricted to constructing acomprehensive conceptual framework of forest gov-ernance, of broad applicability to several forest typesin a large set of countries. Field testing, countryforest governance diagnostics, actionable indicatordevelopment, and preparation of a governancetoolkit are important follow-up tasks.

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page xii

“And one should bear in mind that there is nothing more diffi-cult to execute, more dubious of success, nor more dangerous toadminister than to introduce a new order of things; for he whointroduces it has all those who profit from the old order as his en-emies, and he has only lukewarm allies in all those who mightprofit from the new. This lukewarmness partly stems from fearof their adversaries . . . and partly from the scepticism of men,who do not truly believe in new things unless they have actuallyhad personal experience of them.”

(From Chapter VI of Niccoló Machiavelli, The Prince. Peter Bondanella and Mark Musa,

translators. Oxford University Press revised edition, 1984, p. 21.)

This economic and sector work (ESW) is the first step in creat-ing a reformer’s tool to diagnose forest governance and identifyneeds for reforms. Poor governance is a major impediment toachieving development outcomes of the forest sector. It resultsin losses of income, employment, government revenues, andlocal and global environmental services. However, at present,no comprehensive “nuts-and-bolts” guide to reforming forestgovernance has been developed. Often it is relatively easy torecognize that the forest sector in a country is failing to deliverall its potential benefits, but due to the lack of an appropriate an-alytical framework the development community has not beenable to identify a fitting response to the identified shortcomings.

Take a reform-minded Minister of Forestry in a developingcountry where forests are a notable resource for rural liveli-hoods, commercial extraction, biodiversity protection, and car-bon sequestration. The Minister is committed to ensuring thatthe forest sector in her country is well managed and is able toyield the desired development outcomes. At the same time theMinister is aware that the sector is not as well managed as shewould like. In the initial assessment of the situation, it has be-come evident that the main challenge is in the way the resourceis governed. This is demonstrated by widespread illegal loggingand trade in wood products and wildlife, corruption andbribery, land grab, and encroachment. In her discussions withthe Minister of Finance it has also become evident that forestry

Introduction

xiii

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page xiii

Introduction

is contributing much less to the GDP and govern-ment revenues than one should expect.

However, the Minister is much less sure aboutwhat to do next. The international experience onlyshowcases specific actions but does not offer ex-plicit guidance on picking the most appropriate ac-tion in a specific country context. A big issue thatshe is grappling with is: What constitutes forestgovernance, and how can she identify appropriatereforms in the right sequence?

Thinking about the problem, she finds it moreand more obvious that this is a complicated task.Poor governance and corruption is found not onlyin forest sector but also across the economy, and itcannot be fixed just like that. In order to makeprogress, the governance challenge in the forestrysector needs to be broken down into some man-ageable tasks. Sufficient time needs to be given forimplementation and for impacts to be realized. Italso becomes obvious that the first critical step is todefine the dimensions and scope of forest gover-nance as carefully as possible.

In addition, the Minister realizes that gover-nance is not shaped by her government alone.Several stakeholders (forest dwellers, local com-munities and landowners, private sector, etc.) canlay claim to the resource and have a hand in its useand overall management. Through participationand inclusion of the interests of legitimate stake-holder groups in the decision-making process, theMinister has to ensure that the highest-priority re-forms are identified, that the risk of interest groupcapture is minimized, and that the probability ofsuccessful implementation is maximized.

This study is aimed at creating a framework thatwill help the Minister to analyze the governancechallenge through a set of building blocks. This tooldraws on knowledge of governance in general andforest governance in particular. It reflects the theo-retical understanding of governance while beingoriented toward action. It also builds upon thework that others have done, incorporating goodmeasurement approaches and lessons learned.Finally, the framework is generic and is amenableto being customized to different forest types andspecific country contexts.

Section I of this study explores the consequencesof poor governance and the need for and the trackrecord of forest governance reforms. It highlightssome key gaps in our understanding of the gover-nance challenge that provide the rationale for thisreport.

Section II reviews the available literature andextant initiatives on describing and measuringgovernance. It looks at existing general indicatorsof governance and indicators aimed specifically atthe forest sector and highlights the main lessonslearned.

Section III presents a comprehensive conceptualframework with which forest governance diagnos-tics can be undertaken in a country. Drawing heav-ily on the review of Section II, it identifies thecritical parts of forest governance and organizesthem into an analytical framework, consisting offive principal building blocks and their compo-nents and subcomponents.

Section IV summarizes the material and offersconclusions.

The framework presented in this report pro-vides the essential foundation for developing(through subsequent field testing and empiricalvalidation) a forest governance diagnostics tool.It is important to reiterate that this ESW pre-sents only the first essential step—a conceptualframework—of a multistep process to increase ourunderstanding and develop a forest governancediagnostics tool.

The next step would consist of disseminating thereport to a variety of audiences within and outsidethe Bank and field testing this conceptual frame-work in a number of countries that are committedto improving the quality of their forest governance,including those undertaking specific programssuch as REDD. Annex 3 of the report gives the dis-semination plan and budget.

The third and final step will consist of produc-ing a forest diagnostics toolkit. Step 3 will be basedon the field experiences, additional expert inputs,and stakeholder consultations from different coun-tries that were gathered in Step 2 of the process.Steps 2 and 3 will be implemented in succession,after the completion of step one.

xiv

fore_i-xvi_fm.qxd 8/14/09 6:28 PM Page xiv

1

OVERALL EFFECTS OF POOR FORESTGOVERNANCEForest sector governance is defined as the modus operandi by whichpeople, stakeholder groups, and institutions (both formal and in-formal) acquire and exercise authority in the management of forestresources, to sustain and improve the quality of life for those whoselivelihood depends on the sector. Good forest governance ischaracterized by the prevalence of the rule of law, low levels ofcorruption, robust institutions, high competence of officials andother functionaries who implement rules, willingness to addressforest sector issues, sanctity of critical legal elements such as en-forcement of property right and voluntary contracts, etc. (WorldBank 2008b).

Poor forest governance can have significant negative impacts ondevelopment outcomes in all the three pillars of the World Bankforest strategy: the environment, poverty reduction and socialdevelopment, and economic growth (World Bank 2004).

Environmental Impacts

Poor governance impedes SFM. People depend upon forests to pro-vide fiber, fuel, food, water, and many other values. Where demandsare high, the only route to SFM is through some combination of in-ventorying, planning, protecting, controlling use, monitoring, andevaluation. Whether the land is private, relying on the state to protectownership rights, or public, relying on the state to manage and ap-portion benefits, rational use, and accountability depends on robustgovernance. Protected areas particularly depend on good gover-nance. Violations of protected-area boundaries and threats to the con-servation of forest resources and biodiversity are typically rife whengovernance is weak.

Healthy forests protect biodiversity and water supplies andsequester carbon. REDD is considered a cost-effective way to miti-gate climate change (Stern 2009; Box 1). However, poor forest gov-ernance will likely be a major impediment in obtaining large-scaleclimate change mitigation impacts from REDD. Areas with poorgovernance will pose risks that discourage investors. By minimiz-ing illegal use and managing forests under long-term plans, good

Impacts of PoorGovernance and Global

Efforts at Improving its Quality

1

fore_01-08_ch01.qxd 8/14/09 6:32 PM Page 1

forest governance makes investing in REDD pro-jects more predictable.

On the other side of the ledger, where climatechange may have negative impacts on standingforests, adaptation strategies need to be developedto counter these impacts. These include afforesta-tion, reforestation, reducing risks of forest fires,pest-resistant species selection, etc. This is impor-tant not only for preserving the environmentalcontribution of forests, but also for protectingcommunities dependent on their livelihoods fromthese forests. Clearly, good governance would benecessary to identify the most appropriate adapta-tion strategies and to muster resources for theirimplementation (CIFOR 2005).

Poverty Reduction and Social Impacts

Poor governance harms forest-dependent commu-nities. Unclear and insecure land tenure and otherproperty rights, lack of adherence to the rule oflaw, and excessive discretionary authority threatenthe livelihoods of hundreds of millions of indige-nous people and the rural poor. Good governancecan promote equitable distribution of forest bene-fits, honor traditional rights and knowledge, andprovide the platform for prior and informed con-sultations with legitimate stakeholders. Clarifying

land tenure, access, and use rights (for example)is necessary in allowing collection of fodder,fuelwood, and NTFPs, thereby protecting thelivelihoods and rights of forest-dependent com-munities and guarding against the risk that theyare victimized.

Poor governance erodes institutions and spreadscorruption across the economy through a corrup-tion contagion effect. The corrosive effects of illegallogging, especially on governance, are not confinedto the forest sector. Forest products are bulky, andillegal lumber could be easily intercepted by offi-cials. So the connivance and corruption of a rangeof officials—customs, police, local politicians, andtransport authorities—is needed for the industry tosurvive. Corruption in the forest sector is thereforecontagious and weakens governance through othersegments of the economy. The effects of corruptionspread further by providing opportunities formoney laundering, weakening the rule of law inforest areas, diluting the effectiveness of policies,generating trade distortions, and disrupting legiti-mate economic activities more generally. Poor for-est governance also “empowers” criminals. Forestcrimes such as illegal logging, illegal occupation offorest land, woodlands arson, wildlife poaching,encroachment on both public and private forests,and corruption, thrive in an environment of poor

Impacts of Poor Governance and Global Efforts at Improving its Quality

2

Box 1: REDD and the Need for Good Forest Governance

Deforestation and forest degradation are leadingcauses of global warming, together accounting forabout 20% of global greenhouse gas (GHG) emissionsand over one third of emissions from developingcountries. Proposals have recently been made to in-clude REDD in the potential scope of the post-2012climate change regime.

Factors driving deforestation are related to marketfailures; perverse incentives; population pressures;and corruption, greed, and the open-access nature ofthe resource. Addressing the fundamental drivers ofdeforestation and ensuring the sustainability of ap-proaches to reducing deforestation and degradationrequires strong attention to forest governance. The fol-lowing are arguably at the top of the list of governance

issues: providing clarity on land tenure, access, anduse (including to carbon); encouraging participatorydecision making; reducing legislative conflicts; im-proving laws and regulations that govern and deliverincentives; strengthening social and environmentalsafeguards; developing efficient and fair contractsunder which landowners agree to protect their forests;the equitable sharing of benefits among stakeholders;and controlling illegal logging and corruption andinterest-group capture.

The above is a generic list of governance concerns.Specific governance issues will need to be identifiedthrough country analysis, and the framework devel-oped in this ESW could facilitate the necessarycountry contextualization.

Source: The Forests Dialogue (TFD). 2008. Beyond REDD: The role of forests in climate change. TFD Publication Number 3, pp. 28–33.Available at: http://research.yale.edu/gisf/tfd/.


governance (Kishor and Damania 2007; Ross 2001;Seneca Creek Associates 2004).

Economic Impacts

Poor governance and corruption distort foresteconomies. Economic policy failures, includingprice controls, subsidies, and government-controlled collection and marketing of forestproducts, etc., create opportunities for rent seek-ing and corruption. They subject legitimate forestenterprises to unfair competition from illegal,often underpriced forest products and discour-age investors from making socially and environ-mentally responsible investments in the sector.This leads both to fiscal losses and inefficient re-source allocation. If the quality of forest gover-nance is not conducive to sustainable forestmanagement, the objectives of the various pillarsof the forest strategy cannot be met simultane-ously. On the other hand, with good forest gov-ernance, for example, the carbon stocks in theforests can be maintained at the same time as theoperation of well-managed commercial loggingactivities. More specifically, climate mitigationthrough REDD can be implemented conjointlywith forest-based economic development.

Poor governance distorts trade in forest prod-ucts, with effects rippling around the world. In anin-depth, multicountry study of illegal logging,Seneca Creek Associates (2004) found that thevalue of “suspicious” wood products worldwidemay be as high as US$23 billion. Of the total of ille-gal timber, the study estimates that about US$5 bil-lion enters world trade, representing as much as10% of the value of global trade of primary woodproducts. The study also estimates that 12% ofglobal softwood round-wood exports and as muchas 17% of global hardwood round-wood exportsare of suspicious origin. At the country level, thepercentage of “suspicious” log supply ranges fromabout 3% in the case of the United States to morethan 60% in Indonesia.

There is little doubt that poor forest governancereduces the contribution of the sector to overall de-velopment. Globally, the volume of illegal loggingis about US$10 billion per annum. On top of this,approximately US$5 billion per annum is lost togovernments because of evasion of royalty and taxpayments (World Bank 2006b). The two combinedare more than eight times the global overseas de-velopment assistance (ODA) for sustainable

forestry.1 In short, in moving toward sustainability,the hemorrhaging caused by poor governanceneeds to be stopped.2

TRACK RECORD OF IMPROVINGFOREST GOVERNANCE:ACHIEVEMENTS HAVE BEENSIGNIFICANT BUT MUCH MOREIS NEEDEDThe forestry community of practice, including theBank, has been grappling with improving forest gov-ernance since long. It has invested considerable re-sources in addressing the challenge and has achievedsignificant successes. The Forest Law Enforcementand Governance (FLEG) program, funded by theEuropean Commission and coordinated by the WorldBank, provides technical assistance to improve gover-nance at the global, regional, and national level. Thereare also regional programs on forest governance—forexample, in Southeast Asia, funded by AUSAID. TheFLEG-T (Trade) program of the European Union (EU)uses the EU’s leverage over countries exporting tim-ber to the European Commission (EC) to improvelegality and forest governance in these countriesthrough voluntary partnership agreements. A recentanalysis indicated that over the period 1994 to 2005,the Bank has directed about US$300 million, or morethan 11% of its forest projects lending, at improvingforest governance (see World Bank 2006b for a sum-mary of Bank-led as well as other major initiatives ad-dressing forest governance). These have beencomplemented by projects, analytical work, studies,reports, and global best-practices and research papersaddressing a variety of issues, including developmentof national action plans to control illegal logging, in-stitutional reforms, legislative reforms, independentforest monitoring, developing customs cooperationprotocols, local community monitoring and control ofillegal logging, decentralization and devolution ofpublic and private forestlands to local communities,timber theft prevention at the concession level, chain


3

1 It is useful to distinguish two types of losses due to poor gov-ernance. When “productive” activities are totally outside thepurview of authorities (such as illegal/unsanctioned loggingin remote areas), the entire revenue, including the pure rentcomponent, is lost. However, when taxes and royalties areevaded on legally sanctioned activities, clearly, it is that com-ponent of rent that is lost to the public treasury.

2 For further examples on the ills of poor governance, see WorldBank (2006b) and Tacconi (2007).



4

Box 2: A Sample of Achievements in Improving Forest Governance

The community of practitioners in forestry has identi-fied the impact poor governance has on sustainableforest management and the wider development out-comes derived from the sector. This has led to severalbottom-up and top-down initiatives to address thesegovernance challenges. Often these initiatives havebeen developed by governments and nongovernmen-tal organizations (NGOs) as well as bilateral and mul-tilateral donors such as the World Bank.

• The FLEG ministerial processes (in East Asia, Africa,Europe, Central Asia, and Latin America) have gal-vanized international and regional actions betweenconsumer and producer countries. Regional minis-terial declarations and action programs such as de-veloping customs cooperation among East Asiancountries and illegal-logging action plans in Europeand Central Asia (ECA) are strengthening the politi-cal will and technical capacity to address illegallogging and poor sector governance.

• In the Philippines a participatory system for re-source monitoring was established in 1992 as apart of the World Bank-funded Environment andNatural Resources Sector Adjustment Loan. TheseMulti-Sectoral Forest Protection Committees(MFPCs) were funded by the national governmentand had members from central and local govern-ments, law enforcement, forest administration,NGOs and other civil society, media, industries,etc. Their role was to monitor both concessionsand community forests. Some MFPCs had markedsuccess in curtailing illegal logging. After theWorld Bank-funded program ended, many com-mittees could not continue their activities, butsome have continued to exist, and the Philippinesforest authorities plan to revitalize the system.

• A number of countries have established inde-pendent forest monitors (IFM). These organiza-tions, often national or international NGOs butalso private companies, follow the performanceof the sector and the activities of forest authori-ties. The goal is to increase accountability andtransparency in the sector (see Box 3 for

additional details from Cambodia). An interest-ing innovation was made in Honduras, where agovernment agency, CONADEH, was selectedas the IFM. CONADEH is an independent na-tional ombudsman that has maintained its inde-pendence also within the state apparatus.

• In Ghana the government and the EU signed anagreement in September 2008 to promote legalityand governance in the domestic forest sector. ThisVoluntary Partnership Agreement (VPA) will, oncefully implemented, give Ghanaian timber exportseasier access to the EU markets. The EU will alsoprovide support to the country to improve its ca-pacity for sustainable management of forests. EU isnegotiating similar VPAs with a number of coun-tries, such as Cameroon, Democratic Republic ofCongo, Indonesia, Malaysia, and Vietnam.

• Certification of sustainable forest managementhas been expanding greatly in recent years. BothForest Stewardship Council (FSC) and theProgramme for the Endorsement of ForestCertification (PEFC) have become global schemesto promote good forest practices. Verification oflegal origin verifies that timber comes from asource that has a documented legal right to har-vest, pursuant to the laws and regulations of thegovernment of the jurisdiction. These have pro-vided good opportunities to promote legality inthe sector. However, forest certification coversonly 8% of global forests, and even those aremainly found in temperate regions.

• Liberia, starting from a post-conflict situation of an al-most clean slate, has been able to rebuild strong legalframeworks for its sector governance. Specifically, ithas established a sophisticated system of forest man-agement on the triple pillars of community, conserva-tion, and commerce (see Box 6 for details).

• In the United States the Lacey act was amendedin 2008 to include wood products. This amend-ment makes imports of illegally harvested wood(in all stages of processing) highly risky, withviolators liable to face severe penalties.

Sources: Brown, D., et al. Undated. Legal timber: Verification and governance in the forest sector. London: Overseas Development Institute.

Federal Register (2008). vol. 73, no. 196/Wednesday, Oct. 8, 2008/Notices [docket no. APHIS-2008-0119].

http://www.ghana.gov.gh/ghana/eu_ghana_stem_illegal_timber_trade.jsp (accessed 6/11/2009).

UNECE/FAO. 2008. Forest products annual market review 2007–2008. Geneva Timber and Forest Study paper 23. United Nations, New Yorkand Geneva.


of custody and log-tracking systems, etc. (Brown et al.undated; Chatham House 2009; Lawson 2007; FGLGUpdate, June 2008; Magrath et al. 2007; World Bank2008b). Box 2 presents a small sample of theseinitiatives and gives a flavor of the breadth of the ef-forts and achievements in areas ranging from nationallegislation to control illegal imports, to forest certifica-tion and chain-of-custody systems.

Undoubtedly, many of the initiatives supportedby the above programs have improved various as-pects of forest governance and have establishedentry points for additional and deeper reforms andcreated the climate for scaling up of successful ini-tiatives. Yet improving forest governance is a diffi-cult challenge and much more needs to be done toensure that interventions will improve the qualityof forest governance substantially and that the im-provements will have a significant and irreversibleimpact on the symptoms of poor governance, suchas the extent of illegal logging, corruption, en-croachment of protected areas, and violations oftenure and ownership rights.3

RATIONALE FOR THIS REPORT:GAPS IN UNDERSTANDING THEFOREST GOVERNANCECHALLENGEThe rationale for producing this report lies in gain-ing a better understanding of the three reasons thatwe perceive to stand in the way of scaling upefforts at improving forest governance.

The first major reason relates to our inadequateunderstanding of the complexity of forest gover-nance. Governance is a broad term, embracing avaried set of factors and a multiplicity of actors. Itincludes complex actions and interrelations, manyof which are relatively poorly understood. This isclear even from the pithy definition of forest gov-ernance above. Good governance is concernedwith wide-scale prevalence of the rule of law, lowlevels of corruption, robustness of institutions, ahigh degree of competence of officials and otherfunctionaries who implement rules governing thesector, strong political commitment to addresscomplex sector issues, the sanctity of critical legal

elements such as enforcement of property rightand voluntary contracts, etc. (Dixit 2004; WorldBank 2008b, chapter 5).

The complexity and interconnected nature ofvarious aspects of governance make sustainable re-form in this area difficult. However, there is nocommon understanding of what constitutes forestgovernance, and different people have defined itfrom their own special and limited perspective andfocused on limited facets of it. Focusing change onjust one or two aspects without fully appreciatingthe interconnections could compromise its effec-tiveness and even become self-defeating. TheCambodian experience in the context of forestcrime prevention is somewhat illustrative of thisproblem (Box 3). There the reforms were limitedprincipally to the forest sector but succeeded in set-ting up a world-class system of forest crime moni-toring and reporting. However, the effectiveness ofthe program was blunted due to poor governancein other areas, such as the low effectiveness of thejudiciary. A broader suite of reforms would likelyhave resulted in better outcomes.

The second reason is related to the gap betweentheory and practice. The academic literature on goodgovernance and its application to the management offorest resources mostly covers conceptualization ofthe issue, research on incentives, and the politicaleconomy of natural resource management. On theother hand, field activities supported by internationalorganizations, development banks, and NGOs havetended to focus on verification of legality in timbertrade and the monitoring and control of forest crime.These programs have provided valuable experienceand have helped raise the profile of forest governanceissues. However, on account of their opportunisticand fragmented approaches, they have not always ledto structural and deep-seated reforms. In particular,the driving forces behind illegality, noncompliance,and poor governance are rarely systematically diag-nosed, especially at the field level. Thus, there is a“missing middle,” with no practical big-picture ap-proach covering forest governance. Without this“missing middle,” drivers of illegality and poor gov-ernance can be overlooked. Without it, reformers can-not readily identify priorities, target and sequencereforms, and ultimately improve governance. Thus,reforms will have to move away from the currentpiecemeal approach toward a consideration of forestgovernance issues in a holistic manner.

A third important reason for our modest trackrecord has been an inadequate understanding of


5

3 In judging how successful reform efforts have been, a lack ofobjective baselines from which to measure change has been asignificant constraint to such evaluations. The framework pro-posed in this report would help prepare baselines and identifyactionable indicators to track progress of interventions.



6

Box 3: Evolution of Forest Governance in Cambodia

The Cambodian forestry sector has not been able tocontribute its full potential to national development.In the 1990s it became globally known for poor gover-nance and interest-group capture. Noncompetitiveallocation of forest concessions to foreign or joint-venture companies and the financial involvement ofthe military in forestry were major symptoms(FAO/ITTO 2004; GAO 2002). Forest legislation alsoallowed illegally cut timber in concession areas to beeasily legalized. For example, rather than confiscatingillegally cut logs found in the forest and handing themover to the State, the concession holders, who hadcontrol over the area, were allowed to sell the wood.With no official control over the companies, manyconcession holders relied for their wood supplyalmost exclusively on high-grading concession areasand “creaming” the forest, rather than on sustainablelogging based on proper forest management plans. Ithas been estimated that almost 95% of logging in1997–98 was illegal.

The history of rampant mismanagement can be at-tributed to a number of factors, including collusionbetween national officials and logging companies, thelegacy of a lack of rule of law, the financing of inter-nal conflicts by extracting natural resources, interfer-ence from vested interests in neighboring countries,and under-allocation of resources to the publicadministration.

To control illegal logging in the forest sector, thegovernment of Cambodia established the Forest CrimeMonitoring and Reporting Unit (FCMR) in October1999. The FCMR consisted of three components: anoffice in the Department of Forestry and Wildlife,known as the Forest Crime Monitoring Office (FCMO),to monitor crimes in production forests; an office inthe Ministry of Environment, known as theDepartment of Inspection (DI), to monitor forest

crimes in protected areas; and an independent forestmonitor (initially, Global Witness) to independentlymonitor the performance of the two new governmentagencies. A designated focal point in the PrimeMinister’s office helped strengthen accountability ofthe system.

A case-tracking system was developed to serve as adatabase of all forest crimes. The case-tracking systemwas also an important tool for prioritizing enforce-ment efforts, for cataloging the actions taken, and forincreasing the transparency and accountability of thetwo government agencies. The FCMR’s efforts to con-trol illegal logging resulted in the suspension of cor-rupt forestry officials, on-the-spot investigations ofallegations of illegal logging by high-ranking officials,and destruction of illegal sawmills (UNDP/FAO 2002).

However, the project was plagued by a variety ofproblems: (i) Global Witness being considered“biased” and advocacy-oriented by the government;(ii) top-down approach, with little involvement oflocal people and civil-society organizations; and,(iii) a poorly functioning legal system that failed tomove against the big offenders. The project came to astandstill in 2006 when money to pay the independentmonitor ran out.

Recently the forestry law enforcement dialoguebetween the government and the donor community,including the World Bank, has been directed towardsupporting the development of FLEG in the context ofa National Forest Program. However, there has beenlittle progress in this regard. Reports indicate that seri-ous governance problems still exist in the sector, andthis strengthens the view that piecemeal governancereforms are unlikely to succeed. What is necessary is adetailed diagnostic and a willingness (by governmentand stakeholders) to support programmatic implemen-tation of reforms.

Sources: Castrén, T. Foreign direct investment: Road to riches or burden to national development? In: Ruohomäki, O. 2005. Development inan insecure world: New threats to human security and their implications for development policy.

FAO/ITTO. 2004. Capacity building for law compliance in the forest sector: Case study—Cambodia. Available at:http://www.fao.org/forestry/media/12936/3/0/.

GAO. 2002. Cambodia: Governance reform progressing, but key efforts are lagging. Report to the Chairman and to the Ranking Member,Subcommittee on Foreign Operations, Committee on Appropriations, U.S. Senate. Available at: http://www.gao.gov/new.items/d02569.pdf.

Global Witness. 2009. Country for sale. Available at: http://www.globalwitness.org/media_library_detail.php/713/en/country_for_sale.

UNDP/FAO. 2002. Forest crime monitoring and reporting project. Report of the Evaluation Mission, CMB/99/A05/6M/12. Royal Governmentof Cambodia, United Nations Development Programme, and Food and Agriculture Organization, Rome, December.


the political economy of reforms. Governance in-volves many actors. Forest governance reforms cre-ate “losers” and “gainers.” Losers will oppose thereforms and will likely actively sabotage the re-form process. The problem has been astutely andsuccinctly expressed by Machiavelli (see quote inthe Introduction). Would-be reformers must offsetthe resistance of losers. This is easier said thandone, since the losers are typically a small, well-entrenched and politically powerful group that canorganize and act forcefully, while potential gainersare a much larger and scattered group, less capableof organizing themselves for collective action.While critical, our current understanding of how toovercome the resistance of the losers in the reformprocess is quite poor. On the other side of the coin,how to strengthen demand for good governanceand get the support of potential gainers behind thereforms also needs to be better understood. In thesame context, often the “reform-minded Ministerof Forestry” who is expected to take the lead in im-proving governance is a myth. For obvious reasonspoliticians are unwilling to take “hard” decisions,and the political will necessary to initiate and sus-tain reforms is conspicuously lacking. In such situ-ations (and to strengthen the support for reforms inany case), promoting “champions” who supportreforms would be a feasible alternative. This re-quires an understanding of the balance of powerand the nature of political equilibrium in a country.Thus, there is a need to better understand the po-litical economy of reform processes, underpinnedby stakeholder analysis. However, our under-standing of this topic is still emerging, and ourignorance stands in the way of effective reforms.

BUILDING A “BIG-PICTURE”FRAMEWORK FOR FORESTGOVERNANCEThis ESW is aimed at closing the three critical gapsidentified above. The discussion suggests that theabove challenges have the highest possibility ofbeing addressed by carrying out an in-depth diag-nostic study of forest governance with the help of acomprehensive forest governance framework(which is currently unavailable). This approach toforest governance will:

• Develop a common and comprehensive un-derstanding of the scope and complexity of

forest governance and the roles of variousstakeholders in its improvement, and mea-sure and compile a baseline situation of forestgovernance

• Help to address the “missing middle” prob-lem to improve understanding of the realdrivers of illegality and poor governance(including those originating from outsidethe forest sector), at the field level, and tomainstream governance issues into SFMapproaches

• Contribute to the formulation of targeted andactionable interventions to improve forestgovernance and to make informed choicesregarding priorities, especially when impro-ving law enforcement and strengtheninginstitutions

• Contribute to a better understanding of thepolitical economy challenge, including iden-tifying governance components and actionsthat generate and strengthen the demand forgood governance

• Foster stakeholder participation and build astrong consensus for reforms

• Help to design reforms that have a highchance of success, and identify indicators tomeasure the progress of reforms

• Contribute to a systematic development ofActionable Governance Indicators (AGIs) forthe sector.4

• Enable identification of sector-specific andbroader governance issues and promotemainstreaming of forest governance concernsinto the broader governance and anticorrup-tion agendas of the World Bank and otherdevelopment agencies

To reiterate, this ESW constructs a comprehen-sive model of forest governance founded on fivebuilding blocks that incorporate the multipleand complex dimensions of forest governance,to better understand the sector governancechallenges.


7

4 AGIs complement the conventional input, output, and out-come indicators to give a better handle regarding which as-pects of governance are functioning well or poorly, and howinputs and outputs of governance reform efforts contribute toa particular governance aspect. For further details on AGIs seeSection II of this report.


9

The forest governance framework presented in this ESW builds uponthe available experiences and ongoing work in the area. This sectionexplores how others have described and measured overall gover-nance, including the use of governance indicators, and the mainlessons emerging from the review. The section then looks at how for-est governance has been defined and measured and the key emerg-ing lessons from the experiences. Drawing upon the lessons learnedfrom these reviews, the ESW then proposes a new operational frame-work for forest governance in Section III.

CONCEPTUAL DEFINITIONS OF OVERALLGOVERNANCEA perusal of the literature indicates that “governance” has been usedto mean several related things. The term “governance” has been usedfor a long time to mean “government” or what governments do.Thus, the common dictionary definition makes “governance” a syn-onym of “government”—the process and actions of governing(American Heritage Dictionary of the English Language 2000, 760).

For at least the past two decades, however, the term has been usedin a wider sense in policy circles. A United Nations DevelopmentProgramme (UNDP) discussion paper (UNDP 1997) asserts that gov-ernance is the exercise of economic, political, and administrative au-thority in managing a country’s affairs. Along these same lines, somehave used the term to mean formal and informal arrangements thatdetermine how public decisions are made, who makes them, and howpublic actions are carried out (e.g., Kaufmann et al. 2008). Governancehas also been defined as a mechanism through which citizens andgroups articulate their interests, exercise their rights and obligations,and reconcile their differences (Robledo et al. 2008; UNDP 1997).Mimicopoulos (2007) explains that governance has three aspects. First,social governance provides the moral foundation; second, economicgovernance provides the material foundation; and last but not least,political governance provides the order and the cohesion in a society.

These wider definitions reflect an understanding that the bound-aries of governance are inexact, and too narrow a focus on gover-nance misses the full picture. As Graham et al. (2003) have observed,many actors beyond government play a role in governance, includ-ing citizens, the private sector, and civil society.

Describing and MeasuringGovernance2


Recognizing the need to develop the “big-picture” framework, this ESW views “governance”in a broad sense. Thus, as used here, “governance”has social and economic aspects that extend be-yond formal government. In some contexts, cus-tomary and informal rules are more influentialthan formal laws. Ownership and markets may berooted in government enforcement of rights, butthey shift power over behavior and goods out ofthe hands of government. All of these forces matterto people concerned about how a society or itsresources are governed.

WHAT IS “GOODGOVERNANCE”?Governance is said to be “good” when it allocatesand manages resources efficiently, effectively, andequitably. Good governance is characterized by re-spect for the rule of law, transparency and free flowof information, significant citizen participation andequity, high levels of accountability, effective man-agement of public resources, and control of cor-ruption (Kaufmann et al. 2008; Mayers et al. 2002;UNDP 2006; World Bank 2006b). Furthermore,good governance is epitomized by predictable,open, and enlightened policymaking (i.e., trans-parent processes); a bureaucracy imbued with aprofessional ethos; an executive arm of govern-ment accountable for its actions; and a strong civilsociety participating in public affairs (World Bank2000, p. xx). According to UNDP (2006), good gov-ernance ensures that there is broad consensuswhen setting political, social, and economic priori-ties and that the voices of the poorest and most vul-nerable are heard and taken into considerationwhen deciding what should be done about a givenresource. Poor governance, on the other hand, ischaracterized by unjust or unenforced legal sys-tems, social exclusion, unengaged civil society,opaque decision making, abuse of executivepower, unaccountable bureaucracies, arbitrarypolicy making, inequitable resource allocation, andwidespread corruption (Mayers et al. 2002; Tacconi2007; World Bank 2006b).

Good governance involves the mechanisms,processes, and institutions that enable citizens andgroups to express their interests, exercise their legalrights, mediate their differences, and meet theirobligations. Improving governance therefore en-tails making information available to the public,transparency and accountability in decision

making, equitable sharing of the costs and benefitsof conservation of resources, and strategic, effec-tive, and efficient management of resources(UNDP 1997).

To summarize, governance is shaped by andreflected in the values, institutions, and rules ofsociety as a whole. It involves many kinds of peo-ple and organizations. Elected officials, civil ser-vants, stakeholders, property and rights claimants,businesses, NGOs, and the media all play roles.Thus, it follows that while government is an im-portant component, a full understanding of gover-nance requires looking beyond government.Furthermore, improvements in governance can andindeed should be the responsibility of all stakehold-ers (Thomas et al. 2000). And within the stake-holder groups, care needs to be exercised to ensurethat the interests of the weaker and politically dis-enfranchised are well represented and well pro-tected in a governance reform process. This pointassumes critical importance in any strategy for im-proving governance and will form one of the guid-ing principles in the development of the forestgovernance framework of this ESW.

OPERATIONAL DEFINITIONS OFGOVERNANCE: CRITERIA ANDINDICATORS Conceptual definitions can set the boundaries ofdiscussion, but when it comes to measurement orevaluation of governance, something more con-crete is needed. Practitioners have sought to disag-gregate governance into operational componentsor criteria, represented by measurable indicators.Kishor and Belle (2004) explain that breaking gov-ernance into operational components and indica-tors serves several useful purposes:

1. The division conveys a clearer understandingof what the term “governance” encompasses.

2. The division allows more precise policy dis-cussions of what aspects need to be improvedand how they can be improved.

3. By identifying indicators and measuring gov-ernance, one can assess its quality and trackchanges.

4. Indicators allow analysis of how governanceaffects important developmental outcomes.

5. Indicators allow for cross-country compar-isons (although this is not a major focus of thisESW).

Describing and Measuring Governance

10


Input, Output, Outcome, and Actionable(Governance) Indicators

Indicators come in many forms and perform dif-ferent functions. Useful information for monitoringand evaluation of reforms is obtained if indicatorsare tied to inputs, outputs, or outcomes of inter-ventions.

1. Inputs include the resources employed andactivities undertaken to produce given out-puts. They can be measured either in mone-tary terms or in terms of the magnitudes ofparticular types of inputs—for example,number of people in charge of monitoring agiven forest, and offices for receiving com-plaints about illegal activities.

2. Outputs are the products of those inputs andactivities. Individual outputs are required toachieve other, higher-level outcomes or re-sults. Examples of outputs include revisedforest laws, number of legal timber harvestauctions, and expansion of area underplantations.

3. Outcomes are the ultimate objectives of publicpolicies and represent how transformationalchanges are achieved. An example would belarger or more forest cover and extent.

(Additional desirable aspects of indicators aredescribed briefly in Annex 1.)

Reid (2009) cautions that this three-level hierar-chy of indicators can be problematic when appliedto governance issues because governance facili-tates resource and economic outputs and outcomesrather than directly delivering them. Consider theprocess of trying to improve some particular ele-ment of a given dimension of governance.5 In anysuch reform process, there will be a need to moni-tor both implementation and results of the reformefforts.6 Projects typically focus their monitoringefforts on inputs, activities, and outputs, whereas acountry assessment report (a World Bank CountryAssistance Strategy [CAS], for example) is morelikely to focus its monitoring on a mixture of out-puts (e.g., laws passed) and outcomes (people

lifted above poverty). But it is rare for reformers ordonors to design indicators that systematicallymonitor the quality of particular elements of givengovernance dimensions and the factors that affectthose qualities. Thus, Reid develops the concept ofAGIs, which provide evidence on the characteris-tics and functioning of particular governancesystems.

To clarify further, input and output indicatorsfor such governance reform efforts track inputsemployed, actions taken, and products producedto improve the functioning of some specific gover-nance element. Using input and output indicatorsalone is not sufficient for determining whethersuch a reform effort is actually making progresson the underlying governance improvements.Governance outcome indicators, on the other hand,focus on the final impacts of a country’s gover-nance institutions or on political, social, or eco-nomic phenomena that citizens care about (level ofcorruption, for example). They, however, providevery little guidance on why a given country is per-forming well or poorly on any given governancedimension. AGIs are designed precisely to drilldown to the elements and sub-elements of eachgovernance dimension, so as to shed light on bothwhich elements or sub-elements and what featuresof any given element or sub-element are workingwell or poorly.

In sum, AGIs complement the input, output,and outcome indicators. “When coupled with ev-idence on context, as well as inputs and outputs,AGIs can facilitate research on how particular as-pects of context, inputs and outputs of gover-nance reform efforts interact and contribute to theperformance of a particular element or sub-element of a given governance dimension.” (Reid2009).

AGIs are clearly crucial in diagnosing andtracking “changes” at the level of specific activities,aimed at improving particular aspects of gover-nance. But other than in the human resourcesmanagement area (Reid 2009), little effort hasbeen invested in developing such indicators.7 As itexplores the governance literature, this ESW will


11

5 As indicated in a later section, “governance dimension” issynonymous with “governance building blocks” as developedin this report.

6 This is becoming increasingly important in the context of theimplementation of the Governance and Anti-CorruptionStrategy of the World Bank (World Bank 2008e).

7 To give an example of an AGI: One of the objectives of ahuman resource management system is to attract qualifiedhuman capital skills. An indicator of how well this objective isbeing achieved is the average number of qualified applicantsper advertised position. Higher averages would reflect betterperformance on this objective than would lower averages(Reid 2009).


also identify any available AGIs and initiate theirsystematic development for use in forest sectordiagnostics.8

EXAMPLES OF INITIATIVES ONOVERALL GOVERNANCEINDICATORSMany governance indicators are in use all over theworld. Researchers have estimated that there areapproximately 140 aggregate indicators composedof thousands of individual indicators (Arndt andOman 2006; World Bank Institute 2006). This sec-tion highlights a few important initiatives.

Transparency International’s CorruptionPerception Index9

Since 1995, Transparency International (TI) hascome up with a Corruption Perceptions Index(CPI). The CPI measures the perceived levels ofpublic-sector corruption in a given country and isa composite index, giving an aggregated outcomeassessment. It draws on a large set of expert andbusiness surveys for its estimation. The index rankscountries of the world according to the degree towhich corruption is perceived to exist among pub-lic officials and politicians. The 2008 CPI scores 180countries on a scale from 0 (highly corrupt) to 10(highly clean).

Denmark, New Zealand, and Sweden share thehighest score at 9.3, followed by Singapore at 9.2.Bringing up the bottom is Somalia at 1.0, with Iraqand Myanmar at 1.3 and Haiti at 1.4. The poor per-formance of many of the world’s poorest countrieshighlights the fatal link between poverty, failedinstitutions, and graft. Although the CPI itself is notgeared to pinpointing interventions, TI recom-mends developing strong oversight through parlia-ments, law enforcement, independent media, and avibrant civil society as ways to fight corruption.

The Global Integrity Index10

Global Integrity, an international nonprofit organi-zation that tracks governance and corruptiontrends around the world, compiles the GlobalIntegrity Index. Early efforts started in 2006 andcurrently the index is aggregated from more than300 discrete integrity indicators; it provides infor-mation largely on governance outcomes. TheGlobal Integrity Index groups countries into fiveperformance tiers according to a country’s overallaggregated score: very strong (90�), strong (80�),moderate (70�), weak (60�), and very weak(�60). The data for the indicators come from peer-reviewed assessments by local experts. These arethen vetted by peer reviewers to validate andincrease the reliability of the data.

Instead of trying to measure actual levels of cor-ruption (an extremely difficult task and one that isof dubious value and likely to yield only poor-quality estimates), Global Integrity quantitativelyassesses the opposite of corruption—that is, theaccess that citizens and businesses have to acountry’s government, their ability to monitor itsbehavior, and their ability to seek redress andadvocate for improved governance. The integrityindicators break down that access into a number ofcategories and questions, ranging from inquiriesinto electoral practices and media freedom to bud-get transparency and conflicts of interests regula-tions.11 Thus, integrity indicators identify strengthsand weaknesses in the national anticorruptionarchitecture and serve as a road map for possiblereforms.

The World Bank’s Country Policy andInstitutional Assessment12

The World Bank’s Country Policy and InstitutionalAssessment (CPIA) measures the quality of poli-cies and institutions that are related to economicgrowth and poverty reduction and considered tobe the main determinants of aid effectiveness


12

8 In our context, sustainable forest management would be, interalia, concerned with issues of commercial timber trade and for-est business enterprises. In particular, there would be interestin ensuring that concession allocation processes are transpar-ent and competitive. Bid invitation through public announce-ments with a reasonable time to closing would promotetransparency. Tracking the number of announcements anddays available before bid submission would be good examplesof AGIs for forest governance.

9 http://www.transparency.org/policy_research/surveys_indices/cpi.

10 http://report.globalintegrity.org/globalIndex.cfm.11 For 2008, the integrity indicators were organized into 6 main

categories and 23 subcategories. The main categories wereCivil Society, Public Information and Media and Elections,Government Accountability, Administration and Civil Service,Oversight and Regulation, and Anti-Corruption and Rule of Law.

12 http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/IDA/0,,contentMDK:20941073~pagePK:51236175~piPK:437394~theSitePK:73154,00.html.


prospects. “Quality” refers to how conducive theensuing framework is to fostering povertyreduction, sustainable growth, and the effectiveuse of development assistance. The assessment hasevolved into a set of 16 criteria, which are groupedin four clusters: economic management; structuralpolicies; policies for social inclusion and equity;and public sector management and institutions.Criteria 12 (Property Rights and Rule-basedGovernance), 15 (Quality of Public Administra-tion), and 16 (Transparency, Accountability, andCorruption in the Public Sector) are particularlyrelevant to assessing some elements of the qualityof governance, including accountability, trans-parency, corruption, and protection of propertyrights. Each criterion is rated on a 6-point scale,with 1 indicating the lowest quality. Ratings foreach of the criteria reflect a variety of indicators,observations, and expert judgments.

The World Bank Institute’s AggregatedGovernance Indicators13

In the late 1990s, the World Bank Institute and theResearch Department of the World Bank started aresearch program on governance indicators. Atthat time there were no internationally comparablemeasures of governance (Kauffmann et al. 1999)have developed six governance indicators calledworldwide governance indicators. They used anextension of the unobserved components model toaggregate a database of hundreds of cross-countrygovernance indicators into six dimensions:

1. Voice and accountability looks at indicators ofgovernance that deal with the politicalprocess, civil liberties, political rights, and thefreedom of the press. This indicator attemptsto measure the extent to which the citizens ofa country participate in the selection and run-ning of governments. This also includes theindependence of the media.

2. Rule of law looks at issues such as the protec-tion of property rights and the effectivenessand independence of the judiciary. It also as-sesses the incidence of violent or nonviolentcrime, the effectiveness of the police, andwhether or not contracts are enforced.

3. Control of corruption (or graft) attempts to mea-sure the exercise of public power for private

gain, including elite capture. Corruption is acommon symptom of poor governance.

4. Government effectiveness looks at the quality ofpublic services, the quality of civil service, andthe degree of its independence from politicalpressures. It also assesses the quality of policyformulation and implementation and the gov-ernment’s commitment to such policies.

5. Regulatory burden/quality measures the abilityof the government to formulate and imple-ment sound policies and regulations that per-mit and promote private-sector development.Some of the concepts measured are regula-tions applicable to exports, unfair competitivepractices, and foreign investments.

6. Political stability and absence of violence assessesthe perceptions of the likelihood that the gov-ernment will be destabilized or overthrown byunconstitutional or violent means. With thisindicator, issues such as military coup risk,armed conflict, country terrorist threat, andfrequency of political killings are assessed.

The value of these indicators can lie between�2.5 (red-flag alert) and �2.5 (ideal). Indicatorshave been estimated from available data fromperception-based surveys administered to stake-holders, business climate investment surveys, com-petitiveness assessments, etc.

These indicators make available a broad pictureof the quality of governance in a country and itschange across time. They also allow for interna-tional comparisons across countries. However,they are much less useful in offering insights intothe causes for a particular state of governance andhow it might be improved.

LESSONS FROM THE LITERATUREREVIEW ON OVERALLGOVERNANCE INDICATORSOur key ideas from the analysis of overall gover-nance initiatives are as follows.

Highly Aggregated Indicators ProvideUseful Information

Although these are aggregate governance indica-tors, most do not attempt to measure all aspectsof governance. Transparency International hasdesigned the CPI for a targeted purpose, as an in-dicator of perceived corruption rather than as a


13

13 http://www.govindicators.org/.


broader governance indicator. The Global IntegrityIndex focuses on accountability, transparency, andcontrol of corruption. The World Bank’s CPIA isconcerned with economic growth and poverty re-duction. The World Bank Institute’s AggregateGovernance Indicators are as close as any of thesecome to a general measurement of governance.

This ESW aims to build a tool that looks at forestgovernance as a whole. Forest governance issuesare embedded within overall governance issues.To cover this aspect fully, the tool must track thescope of issues covered by the broader indicators.Where necessary, the forest governance indicatormust look beyond the forest sector to measureparts of general governance that affect forests.

An Indicator’s Form Must Followits Intended Use

Transparency International has designed the CPIto allow country comparisons, but because of itsdesign, it is not a particularly good tool for under-standing the causes of corruption or the stepsneeded to improve governance (Galtung 2006). It isbased on an aggregate of public opinion surveysnot uniformly applied in every rated country. Incontrast, some of the other aggregate indicators areeasily broken down into component parts. Thecloser the components come to measuring rootcauses or specific areas open to change, the moreguidance the tool provides for reform. Because thisreport’s intended objective is to support reform, itwill build a tool whose components can point toareas needing reform.

Useful Measures of Governance Are OftenSubjective

Achieving objectivity in the close measurement ofgovernance is hard. Some indicators draw on ob-jective measurements, such as the EuropeanCentral Bank’s reliance on statistics on lifespan, in-flations, and income distribution (Afonso et al. 2003,2006). These sorts of statistics are open to criticismthat they are indirect measures that share only arough connection with governance; they are reallymeasuring something else. Some indicators drawon subjective impressions, collected and analyzedwith rigor. These are open to criticism that they arenot precise and that the measurement cannot beconsistently repeated. However, the limited avail-ability of objective statistics measuring governance

outcomes leads practically to the use of subjectivemeasures. Subjective measures can capture reality.They can be validated through repeated measure-ment or peer review, and the resulting measurescan have a high probability of being accurate, veri-fiable, and monitorable (Campos and Pradhan2007, Introduction; Kaufmann et al. 2002).

Indicators Will Often Require New Data

If an aggregate indicator is to be easy to produce,the individual indicators that make up an aggre-gate indicator must be easy to find “on the shelf” oreasy to measure. Some aggregates draw on existingmeasures, which they combine and process into anovel format. Transparency International uses amix of third-party surveys, a practice that hasdrawn criticism (Galtung 2006). The EuropeanCentral Bank’s indicators combine readily avail-able demographic and economic data (such asinfant mortality, longevity, school enrollment, in-flation, and gross domestic product growth) withindicators of factors harder to quantify (such as redtape, corruption, and quality of the judiciary). TheWorld Bank Institute uses a large number of “offthe shelf” ratings: in 2007, it used 340 individualvariables taken from 35 sources produced by 32 or-ganizations. These sources included other aggre-gates, such as the Global Integrity Index and theWorld Bank’s CPIA (Kaufmann et al. 2008).

Rather than look for data from others, some ag-gregators start with their own single indicators.The World Bank’s CPIA uses subjective Bank staffratings of different criteria on a common one-to-sixscale. Global Integrity also generates its own data,but it does so through outside expert evaluators,verified by peers. These approaches that generatenew data are adaptable to any country, regardlessof what statistics the country keeps or what dataothers have gathered there. Thus, this ESW favorsusing indicators that are not entirely dependent onpre-existing data.

EXAMPLES OF INITIATIVESON FOREST GOVERNANCEINDICATORSSection I of this ESW offered a conceptual defini-tion of forest governance: the means by which offi-cials and institutions (both formal and informal)acquire and exercise authority in the management


14


of the resources of the sector. Several initiativeshave sought to improve forest governance by pro-viding operational measures of it. The following isa brief discussion of some of the most prominentefforts to date.

The International Tropical TimberOrganization

The International Tropical Timber Organization(ITTO), in 1992, was the first to introduce the crite-ria and indicators concept and terminology(Prabhu et al. 1998). Its indicators were for tropicalforests. It revised its indicators in 1998 to reflectdevelopments that followed the United NationsConference on Environment and Development in1992, including the release of related policy guide-lines by ITTO and the development of parallel cri-teria and indicators for temperate and borealforests. In 2001 ITTO developed a standardized re-porting format to get feedback from users of theindicators. In 2005, it revised its criteria and indi-cators based on user feedback, expert input, andexperience with national indicators that used theITTO set as a model (ITTO 2005).

The ITTO 2005 set has seven criteria for sustain-able forest management: (1) enabling conditionsfor sustainable forest management; (2) extent andcondition of forests; (3) forest ecosystem health;(4) forest production; (5) biological diversity;(6) soil and water protection; and (7) economic,social, and cultural aspects. Obviously, the indica-tors look well beyond the field of governance. Mostof the governance-related indicators are includedunder criterion one.

ITTO’s declared purpose for its indicators is tomonitor and evaluate efforts to achieve sustain-ability and to track the effect of reforms. Some ofthe indicators are actionable (e.g., a requirement tolist known gaps in forest policies, laws, and regu-lations) but many are largely descriptive (e.g., pres-ence or absence of a framework for the control offorest management as regards policies, laws, orregulations). Some of the governance indicators aremeasurable only at the national level, while some(e.g., capacity for planning) independently apply atthe level of the forest management unit.

Feedback has improved the indicators, both intheir theoretical grounding and their practicality ofuse. The ITTO indictors were first, and no other setcan claim the benefit of such extensive practicaltesting and revision.

However, they are not perfect for all purposes.Being general and practical, the indicators some-times opt for the simple and do not cover all areasin depth. One observer, looking at the version ofthe indicators from 1998, criticized them for notfully covering macro- and extra-sectoral links orthe broad governance issues such as freedom,transparency, and accountability (Mayers et al.2002). Even with that criticism, the new versionstouch on transparency and accountability onlybriefly, in an indicator measuring community andindigenous people’s participation.

In sum, the ITTO indicators are not all action-able, and although they are broad and practical,they do not cover governance with particulardepth.

International Institute for Environment andDevelopment

International Institute for Environment andDevelopment (IIED) introduces the pyramid of keyelements of good forest governance, which is a diag-nostic and planning tool to be used by stakehold-ers to assess and plan the key enabling conditionsfor good forest governance (Mayers et al. 2002).IIED introduced the pyramid concept at theNovember 1999 Forest Certification and Veri-fication Workshop of the World Bank/WorldWildlife Fund Alliance to illustrate how certifica-tion should be viewed in the wider context ofvarious efforts toward sustainable forest manage-ment, and to stress how it can be affected byvarious critical policy and institutional elementsrequired for sustainable forest management. Thepyramid looks at some of the elements of goodforest governance that are common to a widerange of nations. The elements are generally desir-able elements of good practice derived from a va-riety of sources and experiences. The elementsmake up the following set and provide a checklistto stimulate thinking, not to confine or limitresponses:

1. Verification of sustainable forest managementincludes audit, certification, or participatoryreview.

2. Extension involves the promotion of sustain-able forest management to consumers andstakeholders.

3. Instruments include a coherent set of “carrotsand sticks” for implementation.


15


4. Policies include forest policies, standards forsustainable forest management, and legisla-tion in place.

5. Roles include the various stakeholder rolesand institutions in forestry and land use.

6. Foundations include property/tenure rightsand constitutional guarantees, market and in-vestment conditions, mechanisms for engage-ment with extra-sectoral influences, andrecognition of lead forest institutions (in gov-ernment, civil society, and private sector).

According to the authors, the first five tiers of thepyramid describe those good governance elementsthat are under the control of forest stakeholders.However, the pyramid’s foundations are less di-rectly controlled by forest stakeholders, but arecrucial to an understanding of the constraints andopportunities originating from beyond the forestsector. Each tier represents a group of elements,and their vertical arrangement suggests a genericsequence, with elements in the tiers toward thebottom of the pyramid envisaged to be morefundamental to progress in many contexts.

While each tier describes an element of forest gov-ernance, by itself it does not explain the processesneeded to generate that element. Putting in place theelements of good governance is achieved throughbasic systems that point to implementation of goodforest governance attributes. The authors identifyfive such systems, which should include certaingood governance attributes (in parentheses):

1. Information (access, coverage, quality, trans-parency)

2. Participatory mechanisms (representation, equalopportunity, access)

3. Finances (internalizing externalities, costefficiency)

4. Skills (equity and efficiency in building socialand human capital)

5. Planning and process management (setting pri-orities, making decisions, coordination, andaccountability)

The better developed each of these systems is, thebetter the overall forest governance is likely to be.

The pyramid and its elements offer a compre-hensive agenda for thinking through the main ele-ments of forest governance—policy, law, roles,capacities, and instruments. The indicators andelements provide the basis for a country-specificprocess toward better forest governance, and the

assessment can be carried out with differentdegrees of information and participation.

However, the approach has several limitationstoo. The indicators cannot assess the condition offorests or their management in a country, nor dothey provide objective results. The Brazil casestudy shows that the use of the tool is highly sub-jective, and its legitimacy depends on who does it,and how. While it is easy to classify the elementsunder scrutiny into the proposed three categories(red, amber, and green) of their quality, it is far toocoarse to allow for prioritization of reform activi-ties. Clearly, the approach cannot deliver criteriaand indicators sufficiently specific for judging thestate of forest governance in any one country, andthus it cannot directly contribute to actionable in-dicators (without much more country-based fieldtesting). Finally, the approach can say little aboutthe pattern of sequencing of reforms, as it isentirely possible that some “gravity-defying”progress can in reality be made on upper tiers evenwhen lower tiers are not complete.

Criteria and Indicators for the Conservationand Sustainable Management of Temperateand Boreal Forests: The Montréal Process

The Montréal Process Working Group on Criteriaand Indicators for the Conservation andSustainable Management of Temperate and BorealForests (MP) was launched in 1994 as a response tothe Rio Forest Principles. In February 1995, mem-ber countries adopted the Santiago Declaration af-firming their commitment to the conservation andsustainable management of their respective forestsand endorsing 7 criteria and 67 associated indica-tors as guidelines for policymakers to use in as-sessing national forest trends and progress towardsustainable forest management.14

The seven MP criteria listed below characterizethe essential components of sustainable forestmanagement (e.g., biodiversity conservation). Eachcriterion is characterized by a set of indicators,


16

14 Today, the Working Group has 12 member countries:Argentina, Australia, Canada, Chile, China, Japan, Republicof Korea, Mexico, New Zealand, Russian Federation, UnitedStates of America, and Uruguay. These countries account for90% of the world’s temperate and boreal forests, 60% of allforests, 45% of international trade in timber and timber prod-ucts, and 35% of the world’s population. A parallel process,the Helsinki process, covers the European temperate andboreal countries. (Russia is a member of both processes.)


which provide a way to measure and describe thecriterion in detail.15

• Conservation of biological diversity • Maintenance of productive capacity of forest

ecosystems• Maintenance of forest ecosystem health and

vitality • Conservation and maintenance of soil and

water resources• Maintenance of forest contribution to global

carbon cycles• Maintenance and enhancement of long-term

multiple socioeconomic benefits to meet theneeds of societies

• Legal, institutional, and economic frameworkfor forest conservation and sustainable man-agement

The MP criteria and indicators provide a commonframework for member countries to describe, mon-itor, assess, and report on national forest trendsand progress toward sustainable forest manage-ment. As such, the MP criteria and indicators helpprovide an international reference for policymak-ers in the formulation of national policies and abasis for international cooperation aimed at sup-porting sustainable forest management.

While many MP indicators are quantitative innature, others are qualitative or descriptive. Someindicators can be readily measured (e.g., percent offorest cover). Others may require the collection ofnew or additional data, the establishment of sys-tematic sampling, or even basic research. When in-dicators are measured periodically over time, theyindicate changes and trends in conditions relevantto sustainable forest management, including nat-ural, social, economic, and policy conditions.

These MP criteria and indicators were the prod-uct of extensive consultations with forest managersand users, researchers, the private sector, and otherstakeholders in member countries, as well as withtechnical and policy experts from other temperateand boreal countries and the international techni-cal and scientific community. The criterion on thelegal, institutional, and policy frameworks in-cludes a few indicators on property rights, en-forcement of laws and regulations, publicparticipation, supportive economic policies, etc.These provide useful information for the frame-work proposed in this report.

Center for International Forestry Research

Since 1994, the Center for International ForestryResearch (CIFOR) has been working on criteria andindicators for sustainable forest management andfield testing them at the forest management unitlevel. Assessment at this level is more precise andthe impacts of forest management practices on theforest and local people are more evident. It is alsoeasier to combine the more powerful and easilyuseable criteria and indicators and eliminate thosethat are difficult to use (Prabhu et al. 1998).

CIFOR proposes a toolbox of criteria and indica-tors for sustainable forest management. The toolboxis made up of principles, criteria, and indicators thatare intended to harness local expertise about stan-dards for forest management in particular ecologi-cal regions or for particular forestry regimes.16

This toolbox covers forest management generally,including elements of governance; CIFOR doesnot break out governance as a separate category.CIFOR’s generic template for criteria and indicators(CIFOR 1999) includes policy, social, and produc-tion categories:

• Policy

° There is sustained and adequate fundingfor the management of forests.

° Precautionary economic policies exist (suchas budget reserves, performance bonds,and anticorruption measures).

° Non-forestry policies do not distort forestmanagement.

° Legal framework protects access to forestand forest resources.

• Social

° Forest actors have a reasonable share inthe economic benefits derived from forestuse.

° People link their and their children’s futurewith management of forest resources.

• Production

° Forest management plan is comprehensive.

° Implementation of the management plan iseffective.

° An effective monitoring and control sys-tem audits management’s conformity withplanning.

° There is equitable distribution and pres-ence of economic rent.


17

15 For details see website: www.rinya.maff.go.jp/mpci16 For details about the criteria and indicators refer to

http://www.cifor.cgiar.org/acm/pub/toolbox.html.


The toolbox developed by CIFOR is easy to use.The stakeholder tests carried out by CIFOR at theforest management unit level confirmed the poten-tial of these criteria and indicators to assess forestmanagement operations. In a short time even un-trained groups managed to work out a differenti-ated assessment of the forest managementactivities, although social sets of indicators weremuch more difficult to apply than ecological/policy and forest management sets.

The criteria and indicators developed by CIFORare powerful in that they are actionable and linkedclosely to interventions and reforms. However,they apply mostly at the level of the forest man-agement unit, and the indicators are less relevant toa broader program of improvement of forest sus-tainability. In particular, the social indicatorsexhibit much lower rates of commonality across lo-cation, regions, and nationalities (see Prabhu et al.1998, 4). Finally, the fact that this initiative does notsingle out governance for specific focus limits itsutility for tackling forest governance issues.

Chatham House Initiative

Since 2006, Chatham House has published assess-ments of the global response to the problem of ille-gal logging and associated trade. In its assessment,20 indicators are used to measure both the ultimateend goals and the early response, including issuessuch as building awareness and political will, pro-viding financing, and developing policies.17 The in-dicators have been used in three different types ofcountries: producer countries, ultimate consumercountries, and countries involved in processingtimber for export (Lawson 2007).

The 20 indicators proposed in the project coverthe following areas:

• Awareness of illegal logging problem: This in-cludes the extent of awareness. For example, itcould be assessed by evaluating the growth inmedia coverage and the change in the contentof awareness campaigns. Indicators withinthis category include increased awareness ofthe illegal logging problem at all levels.

• Policy and initiative development and adoption:This includes measures such as policies, pro-grams, and actions aimed at tackling the

problem of illegal logging undertaken byboth the public and private sectors and in pro-ducing, processing, and consuming countries.Indicators within this category include timberprocurement policies and other related initia-tives, the level of development assistance forforest governance programs on the part ofkey consumer countries, forest policies andregulations in key producer countries, anddevelopment or revision of timber and woodproduct procurement policies and supplychain initiatives.

• Policy and initiative implementation: Examplesof indicators within this category include im-plementation of timber procurement policiesand legislation to prevent trade in illegal tim-ber, implementation of forest policies, andimplementation of wood product purchasingpolicies and initiatives.

• Intermediate outputs and effectiveness: Initialoutputs should result from the effective im-plementation of policies. Examples of indica-tors within this category include decliningtrends in logging in protected areas, convic-tions achieved for forest crime and severityof penalties imposed, and improved trans-parency of a range of forest information,including regarding that for concessionownership.

• End goal or output: If the policies and initia-tives are effectively implemented and moni-tored at all levels (producer, processor, andconsumer and in public and private sectors)then the end goal of a reduction in the pro-duction of and trade in illegally producedwood products will be achieved. The indica-tor used in this category is decrease in illegallogging (production and trade), measured inpercentage, volume, and value terms.

In 2008, Chatham House (2009) initiated a pilot as-sessment in five countries (Indonesia, Cameroon,Vietnam, the United States, and the UnitedKingdom—two producers, one processor, and twofinal consumers, respectively). The indicators/verifiers used in the assessment were organizedinto four groups—awareness, government policydevelopment and implementation, private policydevelopment and implementation, and actual lev-els of illegal logging and associated trade. Becausethe 2007 study found that sources of informationwith which to assess the indicators was quite thin,


18

17 For details on Chatham House Indicators see Saunders andNussbaum (2008) and Lawson (2007).


this pilot undertook a survey of perceptions of ex-perts to fill the information gap. A detailed surveyquestionnaire was designed for this purpose.About 30 to 40 experts were targeted from eachcountry, including from government, private sec-tor, NGOs, academia, and the donor community, toensure a balanced response to the questionnaire. Interms of results, for the period 2005–2008, whileawareness indicators showed a decline in mostcountries, the other three suggested considerableimprovement.

The Chatham House initiative draws conclu-sions from a combined set of objective and subjec-tive data with a heavy emphasis on the latter,gathered through questionnaires administered tocountry experts. A large number of the questionsare scored via a yes/no response, and the corre-sponding indicators are aggregated up from these.It appears that most of the indicators belong to theinput or output categories. The initiative focuses ontracking global responses to illegal logging andassociated trade. It therefore does not contributedirectly toward strategy formulation and identifi-cation of priority actions to improve forest gover-nance, which is the major focus of this report.

The World Resources Institute Indicators

The Governance of Forests Initiative (GFI), a col-laboration between the World Resources Institute(WRI), the Instituto do Homem e Meio Ambienteda Amazonia (IMAZON), and the Instituto Centrode Viva (ICV), has been working on several gover-nance indicators with an aim of identifyingprocesses and practices that protect forests and im-prove the livelihoods of forest-dependent people.The major premise is that good processes andcapable institutions are critical to addressing thechallenges of sustainable management of forestresources and reducing deforestation.18

The GFI indictor framework is intended to be anobjective but qualitative assessment of the integrityof processes and arrangements that determine howdecisions about forest management are made. Inthis endeavor it has developed a GFI indicatorframework that provides a common definition of“good forest governance” based on five principles:transparency, inclusiveness, accountability, coor-dination, and capacity.

The indicators of governance of forests in theframework are based on several diagnostic ques-tions that assess the quality and adequacy of aparticular aspect of governance. The responses tothese questions result in one of five values orscores, on a scale from good to bad. The focus of theindicators is on how decisions are made. However,the relevance of the questions being asked (to de-velop the values of the indicators) is linked to theextent to which they result in concrete changes inoutcomes or outputs in the forest sector.

The main issues addressed are land and re-source tenure, land use planning, forestland man-agement, and revenue distribution and economicincentives. The framework considers these issuesin the context of three main components of forestgovernance: actors, rules, and practice. The infor-mation needed to estimate indicator values will bedrawn from a number of assessments (“formats”),principally case studies but also general assess-ments and expert assessments. A first round ofevaluations will focus on Brazil and Indonesia.

This initiative uses a useful approach of orga-nizing information along two axes (the five princi-ples of good governance and the three governancecomponents) and will likely make a valuable con-tribution to our understanding of forest gover-nance once the results from the pilots are available.However, from the available description, it ap-pears that the initiative will focus only on fourmain issues: land tenure, land-use planning, forest-land management, and revenue distribution andeconomic incentives. It is not entirely clear how pri-ority reforms will be identified and how actionablethey will be.

LESSONS FROM THE REVIEW OFTHE LITERATURE ON FORESTGOVERNANCEThe key findings from a review of the six majorinitiatives described in the previous subsection areas follows.

A Holistic Approach to Forest Governanceis Missing

The initiatives described above focused on specificaspects of governance but much less on developinga comprehensive approach to forest governance.The ITTO and the MP approaches cover sector


19

18 For concept paper refer to: http://www.wri.org/climate/governance-of-forests-initiative.


indicators extensively but do not cover governancein any particular depth. Similarly, the CIFOR ap-proach develops a set of actionable indicators, butat the level of a forest management unit, and with-out particular emphasis on governance. The WRIinitiative circumscribes the definition of good gov-ernance to mean “good processes” and “capable in-stitutions” but is not explicit as regards theoperational definitions of the two terms. The IIEDapproach is arguably the most detailed, but eventhat includes only key elements of good forest gov-ernance. However, these are all helpful efforts, andthis ESW has drawn upon them to consolidatevarious elements and sub-elements of forestgovernance toward developing the much-neededholistic forest governance framework applicable toall forest types.

Governance Aspects Need to be Aligned toForest Sector Development Objectives

Governance concerns have to be aligned to specificforest sector objectives such as promoting povertyreduction, commercial extraction, development ofwoodlots, payments for environmental services,management of protected areas, etc. For example,if the promotion of sustainable commercial loggingis a priority objective for a country, governance is-sues related to the management of logging conces-sions, including the processing of allocation tocommercial interests, would assume additional im-portance. Similarly, if a country envisages that itsforest should contribute to poverty reduction, gov-ernance issues related to benefits sharing, decen-tralization of forest management, etc., should takeprecedence. However, these concerns should notsubstitute for but should complement the broadersector governance analysis; the broad approach togovernance proposed in this ESW allows for thispossibility.

Economic Aspects of Forest GovernanceNeed Greater Focus

In the initiatives considered above, little effort hasbeen made to analyze in depth the economic as-pects of forest governance. Governance outcomesin forestry depend on how well the economic pol-icy framework and incentives are aligned with theprivate and social objectives of forest utiliza-tion and conservation. Significant improvementsin forest governance can be achieved by using

appropriate economic incentives and by removingdistortionary incentives.19 The WRI and MP initia-tives, by considering the state of economic incen-tives, include a slice of the whole package ofeconomic factors, but this is not enough. Thus, thisESW attempts to fill the gap related to the economicaspects of forest governance.

Actionable Governance Indicators Shouldbe Highlighted

The existing literature makes little attempt at clas-sifying indicators into input, output, and outcome,and none whatsoever as regards “actionable.” ThisESW makes clear that different indicator types—input, output, outcome, and actionable—performdistinct functions and need to be identified as such.In particular, actionable indicators play a crucialrole in identifying priority governance reforms andin monitoring whether suggested interventions arein fact having the desired impacts on the particulargovernance system and its determinants. Ourreading is that actionable indicators are scatteredaround in the extant initiatives without being iden-tified as such. The forest governance frameworkproposed in this ESW facilitates a classification ofindicators into indicator types and will be espe-cially helpful in identifying actionable forestgovernance indicators.

Overall Governance IndicatorsComplement Sector-Specific Indicators

In Section I, the ESW focused on the fact that forestgovernance problems are often an offshoot of thelarger governance problems faced by a country.Thus, it is difficult to sustain sector-specific gover-nance reforms without simultaneous improve-ments in the overall quality of governance. In otherwords, a “squeaky-clean” forest sector cannot existwhen surrounded by poor governance. However,the literature does not focus enough on the inter-linkages between the two levels of governance.Overall governance indicators, when combinedwith sector-specific indicators, provide a powerfulapproach to understanding the nature of these in-terlinkages, including the conflicts and comple-mentarities, and will be incorporated into theframework being proposed in the ESW.


20

19 See the relevant part of Section III for examples on how eco-nomic factors crucially influence the state of forest governance.


21

This section suggests a framework for actionable forest governanceindicators. In effect, it offers an operational definition of forestgovernance.

As seen from a review of the literature, governance generally, andforest governance in particular, has been defined, interpreted, andapplied by researchers and practitioners in many different ways.Proponents have typically approached the issue from the perspec-tive of their own motivation and professional skills, be it economic,legal, environmental, institutional, social, etc. The essentially em-bedded nature of forestry as a sector in the larger economy has notbeen given adequate attention. Reflecting this, our information baseand intelligence on the issue have been uneven and scattered, andcritical pieces are missing. In other words, forest governance hasmeant different things to different people, and this is not conduciveeither to developing a common understanding or to discoveringsolutions. Organizing the available knowledge on governance intoa holistic framework is a crucial first step to providing our reform-minded Forest Minister with a useful tool to improve sectoroutcomes.

BUILDING BLOCKS OF FOREST GOVERNANCEIn seeking to cover the full range of governance issues, theESW looked to the literature and existing indicators, discussed inSection II. These the ESW analyzed from the perspective of the forestsector. Because economics has such a strong influence on how soci-eties use forest resources, the ESW added a separate category of eco-nomic factors affecting forest governance. The report consolidatedthe available information into five basic categories or building blocks.These building blocks collectively aim to capture all dimensions offorest governance, including the sector-specific and cross-sectoralaspects (i.e., the governance challenges arising from the fact of gen-eral governance being intertwined with sector governance).

The five building blocks are:

1. Transparency, accountability, and public participation2. Stability of forest institutions and conflict management3. Quality of forest administration4. Coherence of forest legislation and rule of law5. Economic efficiency, equity, and incentives

Constructing aComprehensive and

Operational Framework for Forest Governance

3


Principal Components and Subcomponents

Each building block includes specific principalcomponents and subcomponents. The initial work-ing set of principal components and subcompo-nents emerged from insights in the literature, fromexpert inputs, and from the authors’ practicalworking experience. Table 1 presents a compactversion of the framework; Annex 2 lays out theseprincipal components and subcomponents ingreater detail.

The principal components and subcomponentsaim to span the full range of governance, to bepractical for a policymaker to apply, and to pointto areas needing reform. The principal compo-nents (ranging from two to seven per buildingblock) serve to flesh out the scope and content ofeach building block. They also illustrate theinterconnections across blocks and beyond thesector.

The principal components are broken down intosubcomponents that are observable and potentiallymeasurable activities, closely related to a particulardimension of the forest governance system. Thesubcomponents will serve as the basis for thedevelopment of individual indicators. Because oftheir close association to specific governancedimensions, they can potentially yield actionableindicators.20

In offering the reform-minded Minister ofForestry a practical and useful tool, the set of

subcomponents presented here compromises someprecision and objectivity. The ESW has developeda tool that can be applied without great expense,from the knowledge at hand: a way of orderingavailable information rather than a prescription fornew data collection. That led to allowing somebroad and subjective measures. The aim was a toolthat can identify reform opportunities and track in-country developments in forest governance overtime.

BUILDING BLOCKS OF FORESTGOVERNANCE: DETAILSThe discussion below explains each building blockand its principal components in more detail.

Transparency, Accountability, and PublicParticipation

This building block includes components that dealwith government transparency and accountability,

22

Constructing a Comprehensive and Operational Framework for Forest Governance

Table 1: The Building Blocks of Forest Governance and Their Principal Components

Transparency, Accountability, and Public ParticipationTransparency in the forest sectorDecentralization, devolution, and public participation in

forest managementAccountability of forest officials to stakeholdersAccountability within the forest agencies

Stability of Forest Institutions and Conflict ManagementGeneral stability of forest institutionsManagement of conflict over forest resources

Quality of Forest AdministrationWillingness to address forest sector issuesCapacity and effectiveness of forest agenciesCorruption control within the forest sectorForest monitoring and evaluation (M&E)

Coherence of Forest Legislation and Rule of LawQuality of domestic forest legislationQuality of forest law enforcement Quality of forest adjudicationProperty rights recognized/honored/enforced

Economic Efficiency, Equity, and IncentivesMaintenance of ecosystem integrity: sustainable forest

useIncentives for sustainable use and penalties for violationsForest products pricingCommercial timber trade and forest businessesEquitable allocation of forest benefitsMarket institutions Forest revenues and expenditures

20 The subsequent step consists of field testing the conceptualframework in a handful of countries. For each subcompo-nent, evaluative questions will be formulated to assist in thedevelopment of actionable indicators. Starting with a largeand generic list of subcomponents, a core set of practical in-dicators will be identified, tailored to a specific country con-text. These can be assessed for their initial values and providebaselines for monitoring progress.


public participation, quality of monitoring andevaluation of forest activities, freedom of thepress, and internal bureaucratic accountability.Participation, voice, and accountability have be-come dominant themes in the programs of majordonors in their attempts to promote better gover-nance (World Bank 2006b; Xu and Ribot 2004). Theexpectation is that an active and informed citizenryincreases the likelihood of sustainable forest re-source use. This building block measures the extentto which stakeholders can take part in forest plan-ning and other forest-related activities. It also mea-sures the independence and professionalism ofmedia, which should monitor and hold account-able those in authority (Box 4).

The first principal component of the buildingblock is transparency of processes and operationsin the sector. Transparency is essential if govern-ment policy processes are to be made more ac-countable to stakeholders. Transparency providesinformation that supports public participation andimproves planning. When there is no informationabout laws and institutions governing forest man-agement, predatory agents or unscrupulous offi-cials can easily manipulate the law to theiradvantage (Tan et al. 2008).

The second principal component is decentral-ization, devolution, public participation of variousstakeholders in forest management, and the con-sideration of the property rights of indigenouscommunities and forest-dependent people. This isof particular concern due to the essential role in-digenous communities and other forest-dependentcommunities play in sustainable forest manage-ment. The people—legitimate stakeholders—should have a voice in public decisions about theforest. Decentralized decision making can be moreresponsive to concerns of stakeholders. However,this requires that the decentralized structures areprofessionally competent and show high integrityat all levels. Otherwise, there is a great risk of localelite capture. Recent discussions on REDD, for ex-ample, have brought to the forefront the crucial im-portance of this aspect for the success of REDDschemes. How to ensure full and effective, contin-uous participation of indigenous peoples andlocal (forest-dependent) communities in forestmanagement and national REDD processes hasemerged as a key challenge for donors and recipi-ents. In addition to providing a forum for partici-pation, REDD processes will have to strengthen thecapacity of these groups (through information

sharing and outreach) to participate effectively andto lead to equitable outcomes. Macqueen (2006) ex-plains that abuses can be very common in isolatedforest contexts if the lawmaking process is top-down and education systems are lacking.

The third principal component is the account-ability of forest officials to stakeholders. Account-ability of public officers to forest stakeholderscould be improved by the presence of active andable civil society groups (including indigenouspeople’s organizations), independent and inter-ested media, and social values that support forestconservation. Independent social watchdogs whoare responsible for monitoring forest managementand use improve not only accountability but alsotransparency. Social watchdogs who are indepen-dent and are officially recognized can demand andpromote policies that are in the interest of the pub-lic. They can play an important role of asserting therights of the citizens to know what the governmentofficials are doing as far as forest management isconcerned, hence promoting transparency (Young2007).

The fourth principal component is bureaucraticaccountability within the forest agencies, which isthe foundation of any governing process. Internalbureaucratic accountability relates to personalethics, professionalism, commitment, and the pro-motion of a representative bureaucracy. It also canensure the legitimacy of rule of law and the conceptof the public administrator as the servant of the peo-ple. Governments should adopt clear forest policies,disseminate them, and hold officials accountable forimplementing them. The precepts of quality assur-ance and environmental management, as found inthe ISO 9000 and 14000, provide a basis for devel-oping specific standards of accountability.

Stability of Forest Institutions and ConflictManagement

This building block has two principal components.The first is the stability of forest institutions.Frequent changes of/within forest-relevant insti-tutions are likely to have an adverse impact onobjectives, morale, and effectiveness of implemen-tation. Political instability and wars discourageinvestment, which may harm the long-term man-agement of the forests (FAO 1995). Armed conflictcan hamper conservation efforts, especially in pro-tected areas (Matthew et al. 2002). For example,during the Ethiopian–Eritrean war, parks and


23


24


Box 4: Accountability: The Short and the Long of It

Accountability in the forestry sector is complicated, asFigure 1 illustrates. Governments are expected to de-fine the rules and regulations for managing and usingthe forest resources and monitor and enforce them.Feedback about the state of the forest to the govern-ment (1) enables it to set the right service and tariffspecifications, change rules and regulations asneeded, and monitor and enforce rules appropriately.The government may own the Forest Department ormay assume the role of a monitoring and regulatoryauthority (with a relatively autonomous ForestDepartment). To ensure forest health and vitality, theForest Department needs strong incentives, a highdegree of autonomy, good financial management andbusiness processes, and internal bureaucratic account-ability. Feedback about the state of the forest to theForest Department (2) enables the department to adjustthe harvesting and production to sustainable levels.

The route of accountability may be short (direct),in which case the forest department is directly

accountable to the forest stakeholders and interactsdirectly with them as regards the management of theforests (3). Accountability in this case may be in-creased by making available to forest stakeholders themost up-to-date information about the state of theforests and the performance of the Forest Department.This direct line of accountability is most desirable andwill likely ensure a high degree of efficiency of out-comes. The short route of accountability is rare, how-ever; a long (indirect) route of accountability (4) ismore the norm. A typical example of this is whereforest stakeholders hold the government or an au-tonomous body in charge of monitoring, accountablefor the forest sector performance. Forest health and vi-tality may act as feedback to the forest stakeholders (5)and may determine how much pressure stakeholdersput on the government or monitoring unit to maintainforest health and vitality.

Forest stakeholders can hold government andproviders accountable only if they have good

Figure 1: A Simplified Illustration of Accountability in the Forestry Sector(Arrows signify the direction of flow of information along the routes of accountability)

Government/AutonomousOrganization Officials

Monitoring Unit

The Forest Department Needs• Strong incentives• Good financial management and business processes• High degree of autonomy• Internal accountability

Government Role• Laying out rules and regulation• Monitoring and enforcement• Taxes and standards of forest utilization

Forest Department(providers and producers)

Forest Health and Vitality

Accountability to forest stakeholders

Forest Stakeholders• Local people• Merchants• Media• Civil society• NGOs

1

2

3

4

5


reserves lacked funds for staff, infrastructure,research, and management training (Jacobs andSchloeder 2001; Box 5).

Deacon (1994) concluded that political instabilityand insecurity of tenure increase deforestationrates. Conserving a forest area to yield a stream ofoutputs in future years is an investment, and unlesslandowners have some guarantee that they will re-ceive the future returns, they will not take the risk.Countries that are faced by major constitutionalchanges, frequent regime changes, and guerillawarfare tend to suffer heavier forest losses, while

countries with democratically elected legislaturesand stable, civilian governments have both lowerharvesting rates and higher reforestation rates. Inanother study carried out on historical data, hefound that insecure ownership increased the clear-ing of forests and that investments in forest conser-vation occurred under stable societies where therule of law was well established (Deacon 1994).

The second principal component is the natureand level of conflict over forest rights. While do-mestic reasons principally underlie such conflicts,globalization and high mobility of foreign capital


25

Box 5: Political Stability, Conflicts, and Forest Resources

The Ethiopia–Eritrea conflict was one of the longest-running civil wars in African history. The conflictlasted 30 years and had significant impacts on forestresources and biodiversity in these countries. Duringthe conflict there was lack of basic development and adiversion of finances toward conflict. The result was adecline in the availability of food products and othercommodities, a scarcity of petroleum products, highinflation, and rising unemployment. This increased thereliance on the land and its many natural resources,including forests. The most significant consequence ofthis increase in reliance was higher rates of deforesta-tion in Ethiopia’s landscapes for agriculture, livestockproduction, shelter wood, and fuel wood.Deforestation resulted in the loss of critical habitat,species isolations, and local species extinctions.

The diversion of finances and development energiestoward conflict also meant that Ethiopia’s conservation

organization and all protected areas received insuffi-cient funding and lacked sufficient infrastructure andequipment. The loss of conservation-related incomeand understaffing prevented adequate research, moni-toring, and enforcement; resulted in ineffective man-agement, training, and maintenance; and was acontributing factor to the decline in morale of environ-mental management personnel. Political instabilityalso resulted in increased resistance to and ineffectiveenforcement of conservation bylaws and the govern-ment’s exclusionary protected-area policy. Althoughthe government tried to use the military to removeencroachers, this only alienated the local people, whofelt that their survival was a stake. Need and survivalpushed more and more people to move into the parks,even though there was a chance that they could beinjured or killed.

Source: Jacobs, M., and C. Schloeder. 2001. Impacts of conflicts on biodiversity and protected areas in Ethiopia. Washington DC: BiodiversitySupport Program.

Box 4: Accountability: The Short and the Long of It (continued )

information on the forest resources and on the actualperformance of the Forest Department and on whatperformance they should expect. One way to improvethis would be to encourage public participation. If thegovernment is truly committed to improving account-ability and performance of the sector where an

indirect route of accountability obtains, it would es-tablish an independent body or organization to moni-tor the Forest Department’s performance and to applypenalties and sanctions. The monitoring unit will needadequate skills, resources, and focus and autonomyof action.


also have been new factors in fuelling these conflicts.There is a race to acquire land (especially forest landwith unclear or unenforceable ownership rights) forcattle ranching, industrial plantation, soybeans,palm oil, and the like—for its most profitable use.These mega-land acquisitions are often in direct con-flict with traditional and customary land rights(World Bank 2008b). They also create a situationwhere corrupt administrations have an incentive tocollude with foreign investors to legitimize contrac-tual arrangements. Conflict over rights, especiallyviolent conflict, breeds uncertainty, discourages in-vestment, and frustrates long-term planning. Thesubcomponents of this building block include fac-tors such as the perceived fairness of the distributionof rights to the forest and the incidence of violencein disputes over land and rights.

Quality of Forest Administration

The next building block is the quality of forest ad-ministration. This block has four principal compo-nents: willingness to address forest sector issues,capacity and effectiveness of forest agencies, cor-ruption control, and monitoring and evaluation.

Without the will to address sector problems, in-different officials will ignore forest issues and thereis little hope for good governance. Indirect but im-portant measures of will include the acceptance ofinternational commitments, the adoption of poli-cies consistent with sustainable management, andthe size and stability of government forest admin-istration budgets (Box 6).

The capacity and effectiveness of forest adminis-tration is a complex component. Evaluating it

26


Box 6: Capacity, Corruption, and Liberian Forests

Diversion of forest income to fuel armed conflict ledthe United Nations Security Council to impose sanc-tions on trade in Liberian timber in 2003 (UN SecurityCouncil Resolutions 1478 and 1521). After the end ofLiberia’s civil wars, with an eye toward getting sanc-tions lifted, the transitional government appointed aForest Concessions Review Committee to investigatethe allocation and use of forests.

Liberia suffered a breakdown of governance onmany fronts. The violence and instability during thecivil war contributed hugely to forest problems. Ruleof law evaporated. Officials and warlords granted op-portunities to harvest, which businesses eagerly ex-ploited, with everyone ignoring legal standards andprocedures. The Forest Concession Review Committeefound that all 72 forest concessions in the countrywere invalid, either because the government issuedthem improperly or because the concession holdersfailed to honor basic concession requirements.

Lack of oversight capacity magnified the problems.The committee found that the government authorizedmore logging than it could possibly monitor and eval-uate. “Improperly monitored and managed permitsperpetuate[d] incentives to over-harvest and reduce[d]the long-term sustainable yield.” (Liberia ForestConcession Review Committee 2005, p. 34).

With law and oversight absent, the doors wereopen for corruption. President Taylor’s inner circle re-allocated concession territories in 1998 and 1999, fa-voring political cronies, militia leaders, and armsdealers. “Less than 14% of all taxes assessed were ac-tually paid into government accounts and used to fundconstructive governmental functions and social devel-opment.” Some concession holders “funneled theirprofits from resource exploitation into personal wealthand private militia.” (Liberia Forest ConcessionReview Committee 2005, p. 34).

Liberia embarked on forest governance reforms toaddress these problems. A new forest law (adopted in2006) and supporting regulations provide for a chain-of-custody system to track wood harvested from pub-lic forests and ensure that all fees and taxes on thewood are paid to the treasury before the wood isexported. The government now awards concessionsthrough sealed bidding, and companies and personsinvolved in past abuse of the system cannot qualifyto submit bids. Concession contracts and paymentrecords are transparent.

The United Nations Security Council, notingLiberia’s commitment to governance reform, allowedthe timber trade sanctions to expire in 2006.

Source: Liberia Forest Concession Review Committee. 2005. Forest concession review: Phase III. Report of the Forest Concession ReviewCommittee, May 31, 2005.


requires understanding the capacity of the forestagencies relative to the demands placed upon them;the quality of their work in inventory, planning, andimplementation; the effectiveness and fairness offorest law enforcement; and several other factors. Adominant theme that has emerged recently is thatthe policy, regulation, enforcement, and manage-ment functions of the forestry administration shouldbe separated. Under existing institutional arrange-ments, typically the same organization would plan,supervise, and manage its own operations. This re-sulted in a situation of poor accountability and a lackof a drive for results. Recent experiences with sepa-ration of their control and monitoring functions,from Albania and other countries in transition, sug-gest that this can be a powerful approach to im-proving the effectiveness of the forest managementapparatus (ECSSD/PROFOR 2005).

There is widespread agreement that corruptionis a symptom of public sector malfunction (WorldBank 2000). Corruption in the forest sector and vi-olation of forestry laws undermine the rule of lawand act as a disincentive to legitimate investmentin the forest sector (World Bank 2006b). Lower cor-ruption is associated with greater economic growthand lower deforestation rates (Meyer et al. 2003).Combating corruption is one of the most relevantvariables in the design of effective forest policy(Amacher 2006). The proposed indicators in thiscomponent look for evidence of anticorruptionmeasures. These include budget and revenue col-lection transparency, auditing, and anticorruptioninstitutions. Mindful that all these can be in placebut be themselves undermined by corrupt activi-ties, one subcomponent asks for a subjective eval-uation of the effectiveness of the mechanisms.

The fourth principal component focuses onmonitoring and evaluation (M&E). M&E of the re-source and of the ways in which the resource isbeing managed is a powerful instrument to pro-mote transparency and accountability and improvethe effectiveness of resource management. M&E isintrinsically challenging and requires a level oftechnical capacity often unavailable in developingcountries. This capacity needs to be built upthrough programs of technical assistance, sup-ported by a generic set of M&E indicators that canbe customized to a specific country situation(World Bank 2008d). The credibility of M&Eprocesses can be considerably strengthened by in-volving multi-stakeholder groups. In particular,participation of local communities in M&E has

been shown to have a favorable impact on controlof illegal logging and associated forest crimes(Acosta 1999; Springate-Baginski and Blaikie 2007).

Coherence of Forest Legislation and Rule of Law

The rule of law is the opposite of the rule by whimof powerful individuals (Kishor and Belle 2004).This building block focuses on the laws governingforest resources and their even-handed implemen-tation. Government policies and laws can have agreat impact on the rate of deforestation in a coun-try, but these policies tend to be difficult to captureat the macro level. Principal components consid-ered within this building block include the qualityof domestic forest legislation, the quality of civillaw implementation, the quality of the implemen-tation of criminal forest law, the quality of forestadjudication, and the protection of property rights.

The principal component measuring the qualityof forest legislation looks at how costly it is to en-force the law and whether or not the law improvestransparency and accountability (Lindsay et al.2002). It also has a subcomponent judging the con-sistency of formal rules with customary rights andother informal rules. Access to forests for ruralcommunities often depends on these informalrules and their interaction with formal rights andlaws (see, e.g., Larson et al. 2008; Pacheco et al.2008; Box 7).

The principal components on civil and criminalforest law enforcement look both at the penalaspect of laws and their enforcement in practice.Forest law should be applied mindful of laborsafety and human rights, as they apply to the sec-tor. Penal sanctions should be graduated and ap-propriate to the offense. The cost of enforcementshould be within the capacity of the government,and the resulting levels of crime should be low.

The principal component on adjudication looksat courts and other available institutions for re-solving civil disputes and criminal allegations.Ideally, these institutions should be accessible, fair,independent, and affordable, and their judgmentsshould be enforceable. When forest laws are en-forced in a manner that is discriminatory and abu-sive, they have unacceptable, negative impacts onpoor people, ethnic minorities, and women. Also,dispute resolution should be reasonably prompt.In some countries, the court dockets are crowdedand cases can drag on for years.


27


The principal component on property rightscalls for security of land and contract rights. A reli-able system of surveys and records should back upformal property claims. This component also callsfor harmonious treatment of informal or custom-ary rights of rural people. Exercise of informalrights is not always sustainable, but where therights exist they must be factored into governance.Unresolved conflicts between formal and informalrights are seldom productive (Pacheco et al. 2008).This component gives low marks to open access. Inmany countries, government ownership is domi-nant, although the government has limited man-agement capacity. Although most forest areas indeveloping countries are state-owned on paper,rural people may enjoy open access to them in fact.When property rights over natural resources areabsent or unenforced (i.e., when there is open ac-cess) no individual bears the full cost of resourcedegradation. Resources left as open access and nearpopulations with high demand tend to have a high

occurrence of conflicts, are overused, and suffer a“tragedy-of-the-commons” fate (Adhikari 2001;Bromley 1991).

Economic Efficiency, Equity, and Incentives

Governance outcomes in forestry depend on howwell the economic policy framework and incen-tives are aligned with the private and social objec-tives of forest utilization and conservation. Whenreforming economic governance in forests, one ob-jective is to ensure that the society is able to achievethe highest and most equitable outcome possible,under a sustainable pattern of resource use.

The economics framework has to address twokey issues on forest resource allocation: first, doesthe system incorporate externalities and provide theright incentives to move toward an optimal outcome(efficiency), and second, are the benefits distributedamong forest users in a fair and just manner(equity). Equity has to consider distributional

28


Box 7: Forest Overregulation in Bangladesh

Sometimes regulatory structures grow and take ona life of their own, working against their originalintended purpose.

Many countries require transit permits for wood.These permit systems make it more difficult forthieves to move illegally logged timber. In theory, thatshould increase confidence that trees will not bestolen and increase landowner interest in growingtrees. However, sometimes the rules grow until theymake it difficult to move any timber at all, unless youare an expert at navigating the bureaucracy. Then,instead of protecting forests, the rules discouragepeople from investing in trees.

For example, the procedure to get a transit permitto move wood off private land in Bangladesh was asfollows. The applicant had to fill out a permit applica-tion, Form A, and submit it to the Divisional ForestOfficer (DFO). The DFO would have to verify that theland involved was not under management of theForest Department. Then the DFO would send theapplication to the Deputy Commissioner (DC) of theDistrict. The DC had to verify who owned the land.This typically required the application to pass through

the hands of the Additional DC/Revenue and anAssistant Commissioner for Land before the applica-tion could reach a local official who actually couldverify ownership. If the land were near a governmentforest, the local official would have to arrange forsomeone from the Forest Department to check the siteand verify the boundaries. Then the application wouldpass back up the chain to the DC, who would return itto the DFO. If the land passed all tests, the DFOwould send out a forest ranger to mark the trees. Iffewer than 200 trees were involved, the DFO couldapprove the permit after making a personal inspectionof the site. If 201 to 500 trees were involved, theDFO’s supervisor would also have to approve thepermit. If over 500 trees were involved, the nation’shighest forest officer, the Chief Conservator ofForests, would have to sign off.

With all these steps and possible delays, and corre-sponding opportunities for officials to solicit greasepayments, few private landowners braved the systemalone. Instead, they sold their trees, at depressedprices, to middlemen who knew how to secure thenecessary approvals.

Source: Authors’ personal communication.


aspects across various stakeholder groups at a pointin time (intra-generational equity), as well as distri-butional aspects across time (inter-generationalequity). However, optimizing the outcomes of for-est management is difficult due to the complexity ofthe forest products and services and of the often-competing demands of forest users. Some forestproducts have market prices, but even some privategoods are not necessarily marketed, while both localand global public goods often have no monetaryvalue attached to them. Thus, worldwide, forests aredegraded and cleared as a result of economic incen-tives and relative prices that make forest conversionappear more profitable than sustainable forest man-agement. One way to change this and encouragesustainable forest resource use would be to imputeeconomic values to nonmarketed benefits (Pearce2001).

There are additional reasons why the decision-making process gets complicated and outcomesdepart from the desirable. For one, policy decisionsmay be driven by political rather than economicand social considerations. Promoting an inefficientlocal processing industry ostensibly to create localemployment and increase foreign exchange earn-ings, but in reality to build up a vote bank, would

be a good example. This can lead to avoidable dis-tortions in the domestic economy and introduceopportunities for corruption and rent seeking toflourish (Box 8).

Consider another example. Poorly planned in-dustrialization drives (or a misplaced enthusiasmfor promoting domestic industrialization), com-bined with an inadequate knowledge of the re-source base, easily lead to a situation whereprocessing capacity may increase to unsustainablelevels; in other words, sustainable yield and legallyavailable round-wood imports cannot feed the in-dustry. Huge scarcity rents can be earned, and thisleads to endemic illegal logging, where industriestry to secure their raw material supply withoutquestioning the source of the feedstock (see Box 9for the situation in Indonesia). Developing codes ofconduct for corporate governance for forest enter-prises aimed at transparency of their operations,including ensuring legality of their sources of rawmaterial supply, has proven to be a good way tocounterbalance this problem (CEPI 2005; WorldBank 2009a).

Equitable access to forest resources is very im-portant for SFM. When local forest resource usersdo not have what they think are equitable and fair


29

Box 8: Should Trade Policies Be Used to Encourage Domestic Industrialization and Forest Protection?

Maximizing domestic processing of natural resourceshas long been considered a possible developmentstrategy for primary product-exporting countries. Inthe forestry sector, timber export taxes (and its mostextreme form a log export ban [LEB]) and other re-strictive trade policies have been pursued to encour-age forest-based industrialization. It is believed thatby adding export-oriented downstream processingindustries, countries that are currently exportingprimary products could increase value added andemployment and increase their export earnings. Acase has been made for a LEB as a policy for address-ing environmental externalities: it is claimed that de-forestation will decrease because of the reduction intimber exports.

The theoretical literature, however, does not sup-port the above arguments. Imposing export restrictionsis considered a poor policy, harmful to not only

exports but overall growth and welfare as well. Theempirical experience has not been encouraging interms of the impact of LEBs on forest conservation.Tropical timber export taxes and bans have provedonly moderately successful in achieving the desiredresults, as enumerated in a number of country-specificcase studies.

By depressing domestic timber prices below theirpre-ban level, LEBs have often discouraged adoptionof sustainable practices in timber harvesting and havereduced incentives to adopt modern technologygeared toward increasing wood recovery ratios in tim-ber processing. Evidence from a case study of CostaRica illustrates that removing an LEB results in signifi-cant productive efficiency gains. Under a plausiblescenario efficiency gains can be as high as US$14 mil-lion per annum. Under most scenarios, the economywould suffer (small) environmental losses.

Source: Kishor, N. M., L. Constantino, and M. Mani. 2004. Economic and environmental benefits of eliminating log export bans—The case ofCosta Rica. World Economy 24(4), 609–24.


property rights to the resource and are notinvolved in making local rules, they are unwillingto engage in monitoring and sanctioning of usesthey consider to be illegal (Agrawal and Ostrom2001). For example, although the Philippines haspromulgated a number of policies favoringcommunity-based management of the forest andhas subsequently become known for its active pur-suit of people-centered sustainable forest develop-ment (Utting 2000), there are still inherentdifficulties in the implementation of these policiesthat limit equity of forestland allocation and accessof local communities to forest resources. Whereforests are owned and managed by the State (oftenthe case with natural forests in developing coun-tries) and public budgets are tight, these publiclyowned forests become the source of illegal logs andlead to widespread degradation, including that ofprotected areas and national parks. This also putspressure on the State to provide more surveillanceand law enforcement services.

Uneven distribution of wealth and accessibilityto forest resources, rampant corruption, weak gov-ernance, and opposition by small but powerful in-terest groups make it difficult to change and

implement sound forest policies (Utting 2000). Arecent study of the charcoal sector in Tanzaniaillustrates this well (World Bank 2009b). An esti-mated 90% of Tanzania’s energy needs are fulfilledthrough the use of wood fuels. The contribution ofthe sector to the overall economy is estimated to beabout US$650 million per year, and it provides in-come and employment to several hundred thou-sand people in both rural and urban areas. Yet thesector is characterized by weak governance, poorlaw enforcement, corruption, widespread evasionof licensing fees and transport levies, and unsus-tainable harvesting from miombo woodlands. Acombination of technical (expanding the areasunder woodlots), law enforcement (confrontingthe vested and powerful interests controlling thesector, and tougher sanctions), and economicactions (providing incentives to offset increasedinvestment costs associated with sustainablyproduced charcoal) is necessary to ensure thatthe charcoal sector is put back on the rails andthe pressure to deforest the miombo is reduced(World Bank 2009b).

The importance of getting the economic policiesright cannot be overemphasized. Inappropriate

30


Box 9: Balancing Timber Demand with Sustainable Supply in Indonesia

The Ministry of Forestry estimates that the total legalannual harvest of Indonesian native forest timber isapproximately 17 million cubic meters and the in-stalled capacity of the forest industry (catering toboth domestic and international demand) is approxi-mately 74 million cubic meters. While some of thiswood (especially for the pulp and paper mills) comesfrom existing industrial plantations, it is estimatedthat the great majority (approximately 75%) of thetimber is sourced illegally. This dramatic excess de-mand creates high rents to illegal timber supply andsupports an entire value chain of illegal and corruptactivities. In addition, the readily available andcheap illegal supply undermines all incentives to im-port timber.

Piecemeal attempts at governance reforms aredoomed to failure unless the supply–demand

imbalance is corrected. Elements of a successful strat-egy would include:

• Revitalizing the efficiency of forest industries toreduce demand by lowering production losses

• Developing a comprehensive wood industry re-structuring plan to bring Indonesian mill demandinto balance with the nation’s legal sustainabletimber supply

• Augmenting sustainable supply through invest-ments in (rapid growth) industrial and commu-nity forest plantations and through imports

• Streamlining/reducing the demand for illegallyharvested timber through supporting adoption of“green” public and private timber procurementpolicies, and via the promotion of “green”consumerism

Source: Kishor, N. M., and Richard Damania. 2007. Crime and justice in the Garden of Eden: Improving governance and reducing corruptionin the forestry sector. Chapter 3 in Campos, J. Edgardo, and Sanjay Pradhan, eds. The many faces of corruption: Tracking vulnerabilities at thesector level. Washington DC: The World Bank.

World Bank 2006b, Box 5.4.


subsidies or ignoring nonmonetized benefits mayencourage inefficient logging and agricultural en-croachment. For example, a study by Sizer et al.(1999) showed that applied subsidies and weakgovernance in British Colombia resulted in over-cutting old-growth forests in remote areas. In an-other study, Carrere and Lohmann (1996) foundthat subsidies for paper and pulp industries inBrazil, Chile, Guyana, Indonesia, and Thailand re-sulted in conflicts with indigenous groups. Poorlyplanned and implemented pulp and paper indus-try subsidies resulted in a boom in plantationforestry in Chile. Conflicts with the indigenouspeople arose because the indigenous people feltthat plantation forestry resulted in the destructionof their environment and did not benefit themat all.

Significant improvements in forest governancecan therefore be achieved by using appropriateeconomic incentives and by removing distor-tionary incentives. Saunders and Nussbaum(2008), however, caution that while clear economicincentives have the potential to deliver behavioralchange in the forest sector in the short term, thechanges cannot be sustained over a longer term ifthey are not backed by an effective law enforce-ment apparatus.

The preceding examples and discussion high-light the importance of economic aspects: ignoreeconomic factors and you can neither understandnor influence the quality of governance! A goodeconomic framework is necessary to promote goodoverall governance. Thus, this fifth building blockincludes seven principal components that focus onthe following:

• The economic structures of a country shouldpromote ecosystem integrity. Demand andsupply of forest resources should be in bal-ance. If, for example, the processing capacity

for wood is far greater than the capacity of thedomestic forests and a “reasonable” quantityof imports, the forest will be under tremen-dous pressure for harvest, including illegalextraction.

• Incentives should favor sustainable uses; lawsshould impose high costs on unsustainableuses. Forest law enforcement should target il-legitimate operations (and therefore promotelegality).

• Forest resources should be priced to reflecttheir economic value, externalities and non-market private goods should be included indecision making, and policy distortions andadverse incentives should be eliminated.

• Timber sales and concession allocationprocesses should be competitive and trans-parent. Forest taxes, fees, and charges shouldbe simple to understand and implementand should be set at levels to ensure normalprofits.

• Equitable distribution of benefits should bepromoted. Equity in the allocation of forestbenefits encourages public support of gover-nance and public participation in governanceprocesses.

• Healthy commercial institutions and compet-itive markets should be promoted. Infor-mation on forest resources should be publiclyavailable for investors and other stakehold-ers. This will increase the likelihood that own-ers of forest rights will make good decisionsabout the forest.

• Good management of public revenues andexpenditures ensures that these benefits go tothe public owners of the forest and these costsare well accounted for. This indicates thatcrime and carelessness are not distorting thepublic economic signals of forest revenuesand costs.


31


33

This ESW has shown that poor governance results in poor outcomesin the forest sector. Improving governance is seen as a top priority,and there is a healthy trend among countries that produce and con-sume timber and forest products to seek cooperative solutions. At thesame time, country-level efforts have also been stepped up. Despitethese positive trends, much more needs to be done, as dislodgingpoor forest governance is a tough and time-consuming task.

There are still significant gaps in our knowledge that constrain ourreadiness to identify and plan reforms. The ESW argues that three ofthese are key. First, governance is a broad term, embracing a variedset of actors and factors with complex interrelations. Unless thesecomplexities are properly understood, reform programs will not besuccessful, and unfortunately our current understanding is inade-quate. Second, there have been few attempts to merge the academicefforts with the field experience to accelerate learning and develop-ment of practical approaches. This has created what this report callsa problem of the “missing middle.” This is demonstrated by the lackof any notion of a big-picture approach covering crucial aspects offorest governance. Third, governance reforms create losers and gain-ers. The former block reform efforts, whereas the latter would be sup-portive. For obvious reasons politicians are unwilling to take “hard”decisions, and the political will required to initiate and sustainreforms is conspicuously lacking. Thus, there is a need to betterunderstand the political economy of reform processes, underpinnedby stakeholder analysis.

At the same time, improving governance for the forestry sector hasbecome more important than ever before. In the specific context ofREDD, for example, it is widely agreed that without good governanceand promotion of legality in the forest sector, REDD schemes havelittle opportunity to be successful.

In a broader, stylized yet realistic setting, the reform-mindedMinister of Forestry (see the Introduction to this study) recognizesthat poor governance of the sector stands in the way of reaching itsfull potential regarding economic, environmental, and social devel-opment. But the Minister is unsure how to define the problems, howthey can be prioritized and sequenced for implementation, and whatthe entry points for reforms are.

As a starting point, the Minister needs a practical approach tobenchmark forest governance and identify actionable weaknesses. Inother words, the Minister needs tools to clearly define and unbundle

Findings,Recommendations,

and Next Steps

4


the problem before she can identify precise mea-sures to deal with it. The findings of this report sug-gest that the above challenges have the highestpossibility of being addressed by carrying out anin-depth diagnostic of forest governance with thehelp of a comprehensive forest governance frame-work. A detailed review of the available literatureestablished that no such framework is currentlyavailable, and the main contribution of this reporthas been to provide such a framework.

The framework was constructed based upon anextensive literature review complemented with ex-pert opinions. Starting with the broadest possibledefinition of forest governance (see Section I), theliterature review concentrated on identifying alarge collection of elements making up forest gov-ernance. The review also pointed to the importanceof the following: (i) focusing on governance indi-cators as a way to transform governance elementsinto a practical framework; (ii) giving greater con-sideration to economic elements as they impingeheavily on the “traditional” elements of forest gov-ernance; and (iii) developing actionable forest gov-ernance indicators. Finally, the literature reviewdemonstrated that governance can be analyzedfrom various perspectives (e.g., impact on poverty,economic development, and carbon sequestrationand REDD), which should be accommodated intothe overall framework.

The framework proposed in this report is un-derpinned by five building blocks that are envis-aged to cover all dimensions of forest governance:

• Transparency, accountability, and public par-ticipation

• Stability of forest institutions and conflictmanagement

• Quality of forest administration• Coherence of forest legislation and rule of law• Economic efficiency, equity, and incentives

In seeking practicality, the report splits the fivebuilding blocks into principal components andtheir subcomponents. The forest governanceelements available in the literature were used todevelop the appropriate set of subcomponents (fora detailed version of the framework see Annex 2).The specific benefits to constructing such a frame-work are as follows:

• Develop a common and comprehensive un-derstanding of the scope and complexity offorest governance and the roles of various

stakeholders in its improvement; and mea-sure and compile a baseline situation of forestgovernance

• Help to address the “missing middle” prob-lem to improve understanding of the realdrivers of illegality and poor governance(including those originating from outsidethe forest sector), at the field level, and tomainstream governance issues into SFMapproaches

• Contribute to the formulation of targeted andactionable interventions to improve forestgovernance and to make informed choicesregarding priorities, especially when improv-ing law enforcement and strengtheninginstitutions

• Contribute to a better understanding of thepolitical economy challenge, including iden-tifying governance components and actionsthat generate and strengthen the demand forgood governance

• Foster stakeholder participation and build upa strong consensus for reforms

• Help to design reforms that have a highchance of success, and identify indicators tomeasure the progress of reforms; and con-tribute to a systematic development of action-able indicators for the sector

• Enable identification of sector-specific andbroader governance issues and promotemainstreaming of forest governance concernsinto the broader governance and anticorrup-tion agendas of the World Bank and otherdevelopment agencies

To reiterate, this framework provides the reform-minded Minister of Forestry (and/or the champi-ons for change) an essential tool with which todiagnose governance issues in the sector. To besure, this is not a “quick-fix” approach, and theMinister is well aware of it. However, she is com-mitted to spearheading a sustainable, long-termreform program and is convinced that a tool suchas this offers a logical and practical approach, likelyto yield concrete outcomes in the future.

In conclusion, it is important to reemphasizethat the scope of this report is restricted to con-structing a comprehensive conceptual model offorest governance, of broad applicability to severalforest types in a large set of countries. Field testingin a handful of countries, developing forest gover-nance diagnostics and actionable indicators, and

34

Findings, Recommendations, and Next Steps


preparing a governance toolkit are importantfollow-up tasks.

WHAT NEXT?This report provides the framework for a compre-hensive look at forest governance in terms of thefive building blocks and their principal compo-nents and subcomponents. As such, it provides abetter insight into what constitutes “ideal” forestgovernance. Extensive dissemination of this report(within and outside the Bank) will be undertakento create awareness and to build up a consensus forthe framework and approach proposed in thisreport (details on a proposed dissemination planare provided in Annex 3).

The next important step consists of field testingthis conceptual framework and developing thediagnostics in a number of countries. The frame-work is generic in that it can be readily applied toall forest types (tropical, boreal, drylands, miombo,etc.) in a large number of countries. It would be

aligned to support specific sector objectives such aspoverty reduction, commercial logging, REDD, etc.

The subcomponents of the five building blockswill be developed into individual indicators, whichexperts familiar with forest governance issues canadapt to country-specific circumstances and assigna rating. This would enable benchmarking the stateof governance in a country and identifying priorityareas requiring reforms. In turn, this would allowfor a comprehensive assessment (“diagnostics”) ofthe state of forest governance in that country andidentification of the strengths and weaknesses ofthe system and the scope of reforms necessary toimprove governance in the country. A periodicmeasurement of the identified indicators wouldenable tracking of the changes and trends in thecondition of specific governance components.

The final step will consist of producing a forestdiagnostics toolkit. This step will be based on theoutcomes of the field testing, additional expert in-puts, and stakeholder consultations from differentcountries.


35


37

Within the three important categories (input, output,and outcome), indicators may be single or aggregate.Single indicators reflect the state of a single attributeor measure. Mimicopoulos (2007) gives the exampleof an indicator that reports expenditures for labor orcapital investment. The World Bank’s “DoingBusiness Survey” provides single indicators on tenspecific areas of business regulation, such as payingtaxes and trading across borders (Kaufmann et al.1999). Although single indicators cover only a singleaspect of governance, they offer an understanding ofgovernance impacts on the ground. Aggregate indica-tors are composites, usually based upon individualindicators from numerous sources. They compilemultiple measures into a single index using anunderlying model. Aggregate indicators provide amore rounded measure of governance than singleindicators. However, using a single aggregate indi-cator sacrifices the detail that individual indicatorsoffer. Aggregate indicators will be weak if the un-derlying model is weak. Aggregate indicators alsolump disparate aspects of governance and hencemay not be helpful in the design and implementa-tion of reforms (Mimicopoulos 2007).

Indicators may be descriptive or predictive. Almostevery indicator has a descriptive aspect, but a feware tied, through theory, to prediction. For example,

certain economic indicators are “leading,” withtheir movement tending to predict upcoming move-ments of the general economy. The U.S. MillenniumChallenge Corporation, in its search for natural re-source indicators with a link to “economic growthor poverty reduction” (Millennium ChallengeCorporation 2005), shows a preference for predic-tive indicators.

Indicators may be direct or indirect measurementsof the desired criterion. Some criteria, such asratification of international accords, existence of anombudsman’s office, or levels of staffing, lendthemselves easily to direct measurement: yes, thecountry has ratified the treaty; no, it does not havean office with an ombudsman function; and it em-ploys x number of forest officers in enforcement.Some criteria, such as the presence of corruption,are by their nature hidden. For these, the bestalternative may be indirect measures, such as thecountry’s reputation for corrupt activities.

Indicators may be objective or subjective. In theprevious set of examples, the level of enforcementstaffing can be objectively determined; a person’sopinion on the corruptibility of those staff is sub-jective. Objective indicators tend to be easier toreplicate and verify. However, not every criterionyields easily to objective measurement.

Annex 1: AdditionalProperties of Governance

Indicators

fore_37-48_bm.qxd 8/14/09 6:34 PM Page 37

39

Annex 2: The Five BuildingBlocks of Forest Governanceand Their Components: An

Indicative List

Principal Components Indicative Subcomponents

Building Block 1: Transparency, Accountability, and Public Participation

Transparency in the forest sector • Public availability of forest data, plans, laws, budgets, and other informationrelevant to forest use and management

• Public notice of any pending forest agency actions • Transparent allocation of timber and NTFPs concessions

Decentralization, devolution, and • Forest communities have institutional roles in creating public forest management public participation in rules and plansforest management • Accessibility to forest resources by local communities

• Supporting framework for participatory forest managementForest agencies are responsive to public inputParticipatory processes structured to promote consensus

Accountability of forest officials • Feedback to stakeholders about forest resources and their managementto stakeholders • Presence of autonomous organization for monitoring activities

• Influence and interest of civil society organizations on forest issues

Accountability within • Management in the forest agencies/departments is oriented toward accountabilitythe forest agencies Clear statement of forest management strategy or goals

Goals and objectives of forest management disseminated to rank-and-file officialsForest officials evaluated and held accountable for failures to meet stated goals

Building Block 2: Stability of Forest Institutions and Conflict Management

General stability of • Risk posed to forest management from changing forest agency budgets, leadership, forest institutions or organization

• Risk posed to forest management from changing or inconsistent laws and policiesand their implementation

• Risk posed to forest management due to unreliability of tenure rights

Management of conflict over • Perceived fairness of distribution of rights forest resources • Level of conflicting claims over public forests

• Prevalence of violence or use of arms by forest users

Building Block 3: Quality of Forest Administration

Willingness to address • Commitment to legality, certification, and sustainable management of forestsforest-sector issues Support for adoption of forest practices code

Support for private certificationSupport for codes of professional conduct among foresters and civil servants

• Institutional separation of key functions—legislative, administrative, and control

(Table continued on following page.)

(NOTE: The following list is not final but is a work in progress. Starting with this large and generic list of subcomponents, thesubsequent step consists of field testing the conceptual framework in a handful of countries. For each subcomponent, evaluativequestions will be formulated to assist in the development of actionable indicators. From the generic list, the aim is to identify a coreset of practical actionable indicators tailored for a specific country context. These can be assessed for their initial values and willprovide baselines for monitoring progress in improving forest governance.)



• Signatory to and quality of implementation of international commitments related toforestry

• Maintenance of workable forest policiesCollaboration with regional partners to harmonize forest policies and legalframeworks Cross-sectoral policy coordinationAbility to revise and respond to change

Capacity and effectiveness of • Public confidence in forest agenciesforest agencies • Capacity of forest agencies

Human resources, skills, and knowledgeEquipment and toolsStability of budgets and quality of budget process

• Quality of forest resource management Quality of information about the forestsQuality of planning and impact assessment (including cross-sectoral coordination)Activities in the forest are in accord with plansCommitment to sustainability

• Effectiveness of enforcement institutionsFairness and responsiveness of forest officers (and police, if involved in forestenforcement)Effectiveness of prosecutors and courts in forest matters

• Forest extension and environmental education efforts• Independence of civil service from political pressures• Taxes on forest products and services uniformly applied and collected• Availability of incentives to practitioners of responsible forest use and management

Corruption control within • Revenues from forests accounted forthe forest sector • Budget transparency

• Audits of forestry projects• Existence of government anticorruption institutions and measures, including

channels for reporting corruption and whistleblower protection• Effectiveness of anticorruption institutions and measures • Clear code of business conduct for forest industries• Presence of strong nongovernmental watchdogs

Forest monitoring and • Continuous forest inventory of plots established and measured regularlyevaluation (M&E) • Documentation and record of forest management and forest activities to facilitate

monitoring• Results of M&E are incorporated into new forest management plans• Result of monitoring are readily available to the public• Local people are involved in monitoring of forest resources

Building Block 4: Coherence of Forest Legislation and Rule of Law

Quality of domestic forest legislation • Forest legislation effectively and efficiently implemented by forest agenciesAvoids legislative overreachingAvoids unnecessary and cumbersome requirementsEnhances transparency and accountabilityInformal rules, where present, are consistent with formal rules

• Forest legislation is consistent with participatory governance Gives local actors a stake in good managementDeveloped with public involvementClearly states how local people can play a meaningful part in planning,management, and allocation of forest resources

Quality of civil law implementation • Forest laws are actually applied • Labor, safety, environmental, human rights, and other laws are applied in forest

settings

Quality of criminal forest • Suppression: Credible and graduated sanctions, consistently appliedlaw implementation • Detection: Capacity to detect illegal activity

The Five Building Blocks of Forest Governance and Their Components: An Indicative List

40

(Table continued on following page.)



• Prevention: Number of forest-related crimesOrganized crimeGeneral crime

Quality of forest adjudication • Access to courts or arbitratorsFair, honest, and independentAffordable, rapidEnforceable outcomes

Property rights recognized, honored, • Formal and informal rights to forest resources in harmonyand enforced • Security of property rights to forest resources, including carbon

• Quality of forest surveys, records, and cadastre• Contracts and agreements honored/enforced• Legality of land-lease contracts with international investors• Support for community/small/medium enterprises

Building Block 5: Economic Efficiency, Equity, and Incentives

Maintenance of ecosystem integrity/ • Knowledge of supply and demand for forest products and their alignment sustainable forest use • Minimum safeguards for sustainability included in forest management plans

• Forest stakeholders have reasonable share in the economic benefits from forest use

Incentives for sustainable use and • Payments for protecting environmental services from forestspenalties for violations • Forest law enforcement should target illegitimate operations

• Expected returns from illegal use lower than the expected penalties imposed forillegal use

Forest products pricing • International market prices used as reference prices for traded products• Internalization of effects of social and environmental externalities arising from

forest resources use• Removal of distortionary subsidies within the forest sector• Forest resource allocation based on market prices

Commercial timber trade and • Timber and NTFPs concession allocation processes are transparentforest businesses • Forest products auctions are competitive

• Streamlined export taxes and import duties on forest products • Verification, certification, and labeling of forest products

Equitable allocation of forest benefits • Equitable pattern of land and forest resource tenure• Adequate access and use rights where ownership is with the state (or contested)• Equitable share of timber and NTFPs

Market institutions • Competitive forest sector• Use of appropriate incentives in forest management

Forest revenues and expenditures • Efficient system of revenue collection for timber and NTFPsTaxes, levies, and charges based on ensuring normal profits

• Efficient system of public expenditures for forestryPublic expenditure tracking system (PETS) operational in the sector


41


43

DISSEMINATIONConsensus building on the forest governance build-ing blocks will be a major objective of the dissemi-nation of this ESW. Extensive dissemination of thisreport (within and outside the Bank) will be under-taken to create awareness and to build up a consen-sus for the framework and approach proposed inthis report.

In FY10, the proposed dissemination activitiesare:

• Posting the ESW report on the Global DonorPlatform for Rural Development and on theBank’s FLEG website

• Sending the report to a number of forestgovernance professionals and practitioners(via e-mail), with individual follow-up to gettheir inputs

• Organizing training workshop for Bank staffwith participants from HQ and field offices.One or two such workshops will be organizedin FY10, including one at the Rural Week.

• Organizing a dissemination workshop atChatham House, directed at forestry stafffrom development partners such as keybilateral donors, EC, WRI, Chatham House,International Union for Conservation ofNature (IUCN), WWF, etc.

• Possible side event at the World ForestryCongress (October 2009 in Argentina)

• Training and dissemination workshops forthe major stakeholder groups in selectedclient countries. Two regional workshops, onein Africa and another one for Eastern andCentral Asia (ECA), will be organized in FY10.This would be followed up by individualworkshops in those countries identified forfield testing.

BUDGETThe dissemination expenses for FY10 are estimatedto be US$125,000 (Bank Budget [BB] $25,000 � TrustFund [TF] $100,000).

Annex 3: DisseminationPlan and Budget


45

Acosta, R. T. 1999. Forest management and protection: ThePhilippine experience. Paper prepared for the RegionalSymposium on Strengthening Cooperation for Forest LawEnforcement in Mekong Basin Countries, Phnom Penh,Cambodia, June 14–15.

Adhikari, Bhim. 2001. Literature review on the economics of com-mon property resources. Review of common pool resource manage-ment in Tanzania. Report prepared for NRSP Project R7858.Unpublished.

Afonso, A., L. Schuknecht, and V. Tanzi. 2003. Public sectorefficiency: An international comparison. European CentralBank, Working Paper Number 242. Available at:http://www.ecb.int/pub/pdf/scpwps/ecgwp242.pdf.

Afonso, A., L. Schuknecht, and V. Tanzi. 2006. Public sector effi-ciency: Evidence for new EU member states and emerging markets.Working Paper No. 2006/01. Lisbon, Portugal: Departmentof Economics, School of Economics and Management,Technical University of Lisbon.

Agrawal, A., and E. Ostrom. 2001. Collective action, propertyrights, and cecentralization in resource use in India andNepal. Politics & Society 29(4): 485–514.

Amacher, G. S. 2006. Corruption: A challenge for economistsinterested in forest policy design. Journal of Forest Economics12: 85–89.

American Heritage Dictionary of the English Language. 2000(4th ed.).

Arndt, C., and C. Oman. 2006. Uses and abuses of governanceindicators. Paris: Development Center of the Organisation forEconomic Cooperation and Development.

Bhattarai, M., and M. Hammig. 2004. Governance, economicpolicy, and the environmental Kuznets curve for naturaltropical forests. Environment and Development Economics 9:367–382.

Bondanella, Peter, and Mark Musa, trans. 1984. NiccolóMachiavelli, The Prince. Oxford University Press revised edi-tion, 1984, p. 21.

Bromley, D. W. 1991. Environment and economy: Property rightsand public policy. Oxford: Oxford University Press.

Brown, David, et al. Undated. Legal timber: Verification and gov-ernance in the forest sector. London: Overseas DevelopmentInstitute.

Campos, J. Edgardo, and Sanjay Pradhan, eds. 2007. The manyfaces of corruption: Tracking vulnerabilities at the sector level.Washington DC: The World Bank.

Carrere, R., and Lohmann L. 1996. Pulping the South. London:Zed Books, 1996.

Castrén, T. 2005. Foreign direct investment: Road to riches orburden to national development? In: Ruohomäki, O. 2005.Development in an insecure world: new threats to human securityand their implications for development policy.

CEPI (Confederation of European Paper Industries). 2005. Illegallogging: codes of conduct for the paper industry. Brussels.

Chatham House. 2009. Illegal logging and related trade: Pilot as-sessment of the global response, 2008. Energy, Environment andDevelopment Programme, Chatham House, March 2009.Available at: www.chathamhouse.org.uk/eedp.

Christy, Lawrence C., Charles E. Di Leva, Jonathan M. Lindsay,and Patrice Talla Takoukam. 2007. Forest law and sustainabledevelopment: Addressing contemporary challenges through legalreform. Law, Justice and Development Series. WashingtonDC: World Bank.

CIFOR. 1999. The CIFOR Criteria and Indicators Generic Template(C&I Toolbox Series, Tool #2). Available at: http://www.cifor.cgiar.org/acm/methods/toolbox2.html.

CIFOR. 2005. Tropical forests and adaptation to climatechange: In search of synergies. Edited by Carmenza Robledo,Markku Kanninen, and Lucio Pedroni. Bogor Indonesia:CIFOR.

Deacon, R. T. 1994. Deforestation and the rule of law in a cross-section of countries. Land Economics 70(4): 414–30.

Dixit, Avinash K. 2004. Lawlessness and economics: Alternativemodes of governance. Princeton, NJ: Princeton UniversityPress.

ECSSD/PROFOR (Europe and Central Asia SociallySustainable Development department/Program on Forests).2005. Forest institutions in transition: Experiences and lessonsfrom Eastern Europe. Washington DC: World Bank.

FAO (Food and Agriculture Organization). 1995. FAO Yearbookof Forest Products 1993. Rome: FAO.

FAO/ITTO. 2004. Capacity building for law compliance in theforest sector: Case study—Cambodia. Available at: http://www.fao.org/forestry/media/12936/3/0/.

Federal Register. 2008. Vol. 73, no. 196, Wednesday, October 8,2008, Notices (docket no. APHIS-2008-0119).

FGLG Update June 2008. Available for download at: http://www.iied.org/forestry/research/projects/forest.html.

Galtung, F. 2006. Measuring the immeasurable: Boundariesand functions of (macro) corruption indices. In C. Sampford,A. Shacklock, C. Connors, and F. Galtung, eds. Measuringcorruption (pp. 101–30). UK: Ashgate.

Global Witness. 2009. Country for sale. Available at http://www.globalwitness.org/media_library_detail.php/713/en/country_for_sale.

Graham, J., B. Amos, B., & T. Plumptre. 2003. Principles for goodgovernance in the 21st century (Policy Brief No. 15). Institute onGovernance, Ottawa, ON. Available at: http://www.iog.ca/publications/policybrief15.pdf.

Jacobs, M., and C. Schloeder. 2001. Impacts of conflicts on biodi-versity and protected areas in Ethiopia. Washington DC:Biodiversity Support Program.

Kaufmann, Daniel, Aart Kraay, and Massimo Mastruzzi. 2008.Governance matters VII: Aggregate and individual governanceindicators, 1996–2007. World Bank Policy Research WorkingPaper No. 4654, June 24, 2008.

Bibliography


Kaufmann, Daniel, Aart Kraay, and P. Zoido-Lobaton. 1999.Governance matters. World Bank Policy Research WorkingPaper No. 2196. Washington D.C: World Bank.

Kaufmann, Daniel, F. Recanatini, and S. Biletsky. 2002. Assessinggovernance: Diagnostic tools and applied methods for capacitybuilding and action learning. Discussion draft, June 2002.World Bank. Available at: www.worldbank.org/wbi/governance.

Kishor, N. M, and A. Belle. 2004. Does improved governancecontribute to sustainable forest management? Journal ofSustainable Forestry 17(1/2/3, 2004): 55–79.

Kishor, N. M., L. Constantino, and M. Mani. 2004. Economic andenvironmental benefits of eliminating log export bans—Thecase of Costa Rica. World Economy 24(4), 609–24.

Kishor, N. M., and Richard Damania. 2007. Crime and justice inthe Garden of Eden: Improving governance and reducingcorruption in the forestry sector. Chapter 3 in J. EdgardoCampos and Sanjay Pradhan, eds. The many faces of corruption:Tracking vulnerabilities at the sector level. Washington DC: TheWorld Bank.

Kishor, N. M., and K. L. Rosenbaum. 2003. Indicators to monitorprogress of forest law enforcement. International ForestryReview, Commonwealth Forestry Association.

Larson, A. M., P. Cronkleton, D. Barry, and P. Pacheco. 2008.Rights are not enough: Community access to forest resources inLatin America. Prepublication draft from PROFOR.

Lawson, Sam. 2007. Illegal logging and related trade: Measuringthe global response. London: Chatham House, Energy,Environment and Development Programme. Availableat: www.chathamhouse.org.uk/eedp and www.illegal-logging.info.

Liberia Forest Concession Review Committee. 2005. Forest con-cession review, Phase III. May 31, 2005.

Lindsay, J., A. Mekouar, and L. Christy. 2002. Why law matters:Design principles for strengthening the role of forestry legislationin reducing illegal activities and corrupt practices. FAO LegalPaper Online #27.

Macqueen, D. 2006. Governance towards responsible forest business:Guidance on different types of forest businesses and the ethics towhich they gravitate. Edinburgh: International Institute forEnvironment and Development.

Magrath, William B., Richard L. Grandalski, Gerald L. Stuckey,Garry B. Vikanes, and Graham R. Wilkinson. 2007. Timbertheft prevention: Introduction to security for forest managers.East Asia and Pacific Region Sustainable DevelopmentDiscussion Paper. Washington DC: World Bank.

Matthew, R., M. Halle, and J. Switzer, eds. 2002. Conserving thepeace: Resources, livelihoods and security. Manitoba, Canada:International Institute for Sustainable Development.

Mayers, James, Stephen Bass, and Duncan Macqueen. 2002.The pyramid: A diagnostic and planning tool for good forestgovernance. International Institute for Environment andDevelopment.

Meyer, A. G., C. van Kooten, and S. Wang. 2003. Institutional,social and economic roots of deforestation: A cross-countrycomparison. International Forestry Review 5(1): 29–37.

Millennium Challenge Corporation. 2005. Natural ResourcesWorking Group Fact Sheet. Available at: http://www.mcc.gov/press/factsheets/2005/factsheet-060005-natlreswkggroup.pdf.

Mimicopoulos, M. G. 2007. Public governance indicators: A litera-ture review. New York: Department of Economic and SocialAffairs, United Nations.

Pacheco, P., D. Barry, P. Cronkleton, and A. M. Larson. 2008. Therole of informal institutions in the use of forest resources in LatinAmerica. Prepublication draft, PROFOR & CIFOR.

Pearce, D. 2001. The economic value of forest ecosystems.Ecosystems Health 7(4): 284–96.

Prabhu, R., C. Colfer, and G. Shepherd. 1998. Criteria and indica-tors for sustainable forest management: New findings fromCIFOR’s forest management unit level research. RuralDevelopment Forestry Network Paper 23a.

Reid, Gary. 2009. Actionable governance indicators—Concepts andmeasurement. PREM informal note, World Bank.

Robledo, Carmenza, Jürgen Blaser, Sarah Byrne, and KasparSchmidt. 2008. Climate change and governance in the forestsector: An overview of the issues on forests and climate changewith specific consideration of sector governance, tenure and accessfor local stakeholders. Washington DC: Rights and ResourcesInitiative.

Ross, Michael L. 2001. Timber booms and institutional breakdownin Southeast Asia. Cambridge University Press.

Saunders, J., and R. Nussbaum. 2008. Forest governance andreduced emissions from deforestation and degradation(REDD). London: Energy, Environment and DevelopmentProgramme, Chatman House.

Seneca Creek Associates LLC and Wood Resources Inter-national LLC. 2004. “Illegal” logging and global wood markets:The competitive impacts on the U.S. wood products industry.Prepared for the American Forest & Paper Association,Washington DC.

Sizer, N., D. Downes, and D. Kaimowitz. 1999. Liberalization ofinternational commerce in forest products: Risks and opportunities.Washington DC: World Resources Institute.

Springate-Baginski, Oliver, and Piers Blaikie. 2007. Forests,people and power: The political ecology of reform in South Asia.Earthscan Forestry Library.

Stern, Nicholas. 2009. The global deal: Climate change and thecreation of a new era of progress and prosperity. New York: PublicAffairs.

Tacconi, Luca, ed. 2007. Illegal logging: Law enforcement, liveli-hoods and the timber trade. Earthscan Forestry Library.

Tan, N. Q., N. V. Chinh, and V. T. Hanh. 2008. Statutory and cus-tomary forest rights and their governance implications: The case ofViet Nam. Hanoi: International Union for Conservation ofNature.

TFD (The Forests Dialogue). 2008. Beyond REDD: The roleof forests in climate change. Available at: http://research.yale.edu/gisf/tfd/

Thomas, V., M. Dailami, A. Dhareshwar, D. Kaufmann,N. Kishor, R. Lopez, and Y. Wang. 2000. The quality ofgrowth. New York: Oxford University Press.

UNDP. 1997. Reconceptualizing governance. New York: UnitedNations Development Programme.

UNDP. 2006. Measuring democratic governance: A framework forselecting pro-poor and gender-sensitive indicators. New York:UNDP.

UNDP/FAO. 2002. Forest crime monitoring and reporting project.Report of the Evaluation Mission, CMB/99/A05/6M/12.Royal Government of Cambodia, United NationsDevelopment Programme, and Food and AgricultureOrganization, Rome.

Utting, P. 2000. Forest policy and politics in the Philippines: Thedynamics of participatory conservation. Ateneno de ManilaUniversity Press.

World Bank. 2000. Reforming public institutions and strengtheninggovernance: A World Bank strategy. Public Sector Group, PREMnetwork. Washington DC: World Bank.

World Bank. 2004. Sustaining forests: A development strategy.Washington DC: World Bank.

World Bank. 2006a. World Bank Global Monitoring Report2006: Millennium development goals: Strengthening mutual

Bibliography

46


accountability, aid, trade and governance. Available at: http://publications.worldbank.org/ecommerce/catalog/product?item_id=5367015.

World Bank. 2006b. Strengthening forest law enforcement and gov-ernance: Addressing a systemic constraint to sustainable develop-ment. Environment and Agriculture and Rural DevelopmentDepartments. Sustainable Development Network. ReportNo. 36638-GLB, Washington DC.

World Bank. 2007. Strengthening World Bank group engagement ongovernance and anticorruption. March.

World Bank. 2008a. Doing business 2009—Comparing regulationin 181 economies. A publication of the World Bank and theInternational Finance Corporation, Washington DC.

World Bank. 2008b. Forests sourcebook: Practical guidance forsustaining forests in development cooperation. Washington DC:World Bank.

World Bank. 2008c. Land governance assessment framework.Internal Note, World Bank Land Thematic Group.

World Bank. 2008d. Tracking results in agriculture and rural devel-opment in less-than-ideal conditions: A sourcebook of indicators for

monitoring and evaluation. Published by Global DonorPlatform for Rural Development, FAO and the World Bank.

World Bank. 2008e. Strengthening World Bank group engagementon governance and anticorruption: One year progress report.SecM2008-0414, October 2008. The World Bank.

World Bank. 2009a. Bosnia and Herzegovina forest development andconservation project. Aide Memoire, May 4–14, 2009, Annex 3.The World Bank.

World Bank. 2009b. Environmental crisis or sustainable develop-ment opportunity? Transforming the charcoal sector in Tanzania.A Policy Note, Sustainable Development Africa Region, TheWorld Bank [Draft].

World Bank Institute. 2006. Governance data: Web-interactive in-ventory of datasets and empirical tools. Washington DC: WorldBank.

Xu, J., and J. C. Ribot. 2004. Decentralisation and accountabilityin forest management: A case from Yunnan, SouthwestChina. European Journal of Development Research 16(1): 153–73.

Young, D. W. 2007. Independent forest monitoring: Seven yearson. International Forestry Review 9(1): 563–74.


47


Transparency, Accountability

and PublicParticipation

Qualityof Forest

Administration

Coherenceof Forest

Legislationand Rule

of Law

Stabilityof Forest

Institutionsand Con�ict

Management

Economic E�ciency,Equity and Incentives

Extentof forest

resources

Biological diversity

Forest health and

vitality

Productive functionsof forest

resources Protective functionsof forest

resources

Legal,policy and

institutional framework

Socio-

economic functions

Roots for Good Forest Outcomes:An Analytical Framework for Governance Reforms

REPORT NO. 49572-GLB

Agricultural & Rural Development DepartmentWorld Bank1818 H Street, N.W.Washington, D.C. 20433http://www.worldbank.org/rural

Roots for Good Forest Outcomes: An Analytical...

Documents

Transcript of Roots for Good Forest Outcomes: An Analytical...