This paper presents a critical review of various analysis about the underlying cause(s) of deforestation and under what mechanisms deforestation takes place.
All these analyses are categorized into four groups, i.e. Neo-Malthusian, government-failure, microeconomic and macroeconomic approaches. Certain forms of deforestation, as long as they bring net development benefits and satisfy both social cost-benefit analysis and economic efficiency criteria, are generally economically desirable. Nonetheless economic criteria alone cannot provide decision-makers basis for deciding whether a deforestation project is desirable. Biophysical and political criteria need to be taken into account simultaneously.
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