Situating community forestry enterprises within New Institutional Economic theory: What are the implications for their organization?

Abstract

Community forestry enterprises (CFEs) have gained considerable traction with rural development and forestry practitioners as models for community development, poverty alleviation, and conservation. This paper uses New Institutional Economic theory to identify the key organizational features and potential inherent weaknesses of CFEs. NIE theory focuses on arguments of economic efficiency, specifically transaction cost reductions that serve as incentives for collective action by groups of owners. Examples are given to show how the organization of CFEs reduced transaction costs stemming from interactions with industrial loggers and service providers. However, the creation of these community ent..