The effectiveness of a log export ban policy in achieving the twin goals of conservation and economic development has been vigorously debated by many researchers and policymakers for the last two decades or so. Despite the abundance of work focusing on this issue that demonstrates the perversity of such policies, many countries around the world still implement them. This paper will first review the economic and political arguments in regard to the pros and cons of this policy. Second, it will review the Indonesian experience in implementing a log export ban policy in the 1980s and 2000s. Third, using a computable general equilibrium model, this paper will predict the anticipated impact of implementing a log export ban policy on the national economy and on household incomes for various socioeconomic groups.
The authors would like to thank Prema-chandra Athukorala of The Australian National University and participants in the Asian Economic Panel meeting in Sydney, 13–14 October 2005, for their comments and suggestions. All mistakes, however, remain the authors' responsibility.