The Corner

Forests – Cato Responds

My friends Jerry Taylor and Peter Van Doren respond to my critique of their NRO article on the President’s new forest policy:

The central point we tried to make was that it is impossible to efficiently allocate scarce resources among competing claimants without recourse to market information. Your argument (if we understand it correctly) that, once resources HAVE been allocated among competing claimants, state governments are more efficient managers of those allocation programs than are federal agents may well be correct. It is nonetheless irrelevant to our main argument.

We disagree with you, however, about whether state management of national forests ensures that those “who bear the costs and reap the benefits” of policy decisions are the ones primarily making the decisions. We have two objections.

First, people outside of a state’s political boundary often have as big stake in decisions about how natural resources are managed as do people who reside within that state. Non-state residents, for instance, might visit those forests to hunt, camp, fish, hike, or, alternatively, might be willing to pay a great deal to ensure that those resources are left relatively unspoiled by man (witness, for instance, all the environmentalists who never have and likely never will visit the Arctic National Wildlife Refuge who nonetheless contribute large sums of money to environmental organizations to protect that area from development). Accordingly, leaving decisions about how to manage resources with great cross border appeal entirely to locals would not necessarily ensure that those “who bear the costs and reap the benefits” are fairly represented at all.

Second, political decision-making at the local level strikes us as no more likely to produce sound ecological or economic management of the forests than political decision-making at the federal level. That’s because well-organized special interest groups dictate political decisions in all jurisdictions and giving them what they want does not necessarily imply giving the unorganized general public what they want regardless of what level of government we’re talking about.

I take it that we all agree that privatization in some form would be the best resolution of the dispute regarding how to manage the national forests. We disagree, apparently, on whether the Bush proposal is a useful “second-best” policy. Our sense is that it might well be IF you think that well-organized special interests at the local level have agendas that better reflect what market preferences for forest resources might be if freely given reign than well-organized special interests at the national level. Because we cannot say with any confidence what market preferences might be with regards to forest resources in general or in particular, and because organized special interest groups will vary in strength from state to state (more Green in California, less so in Alaska), we don’t think there’s any reason to prefer Bush’s reform over the status quo.

My Rejoinder:My claim is that the empirical evidence is that states have proven more effective both at addressing and reconciling the competing claims of various claimants and at managing lands more efficiently. State lands tend to produce timber more efficiently and in a more environmentally sensitive manner than equivalent federal lands. In other words, they have done more to satisfy the preferences of both environmentalists and economic interests.

Non-state residents may have an interest in how state lands are managed, and states are very sensitive to the impacts of policy decisions on tourism, immigration, and the like. Outsiders are also free to support those in-state interests who share their preferences. At the state level, however, the costs and benefits of catering to outside interests are more clearly manifest than at the federal level. Closing off state trust lands to timber means less revenue for schools, but may mean offsetting revenue from tourism. This feedback is far less attenuated when similar decisions are made at the national level for the country as a whole.

The Bush policy may not be a “second-best” policy, but it I do believe it is a step in the right direction. In my view, decentralizing forest management will foster innovation and experimentation just as it has in other environmental areas, creating more opportunities for property-based management. The “Charter Forest” proposal floated by the Administration in 2001 may have been a better idea, but IMHO this is a good start.

Jonathan H. Adler — Mr. Adler is an NRO contributing editor and the inaugural Johan Verheij Memorial Professor of Law at Case Western Reserve University School of Law. His latest book is Marijuana Federalism: Uncle Sam and Mary Jane.

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