South-Western College Publishing - Economics  
National forests to be managed more locally, rather than nationally
Subject Bush Administration is decentralizing national forestry decisions in favor of regional forest management
Topic Economics and the Environment, Market Failure, Regulation and Public Choice
Key Words

national forests; regulation; environment

News Story

The Bush Administration issued new rules designed to more efficiently manage the nation's 155 national forests, allowing regional forest managers to determine appropriate usage, such as logging, drilling, or cell-phone tower construction. Regional National Forestry Service (NFS) managers view the new rules as a step in the right direction, allowing them greater flexibility to revise the current process for environmental usage, which requires a burdensome review process. Environmental groups, on the other hand, decried the policy for eliminating any oversight of forest managers, who may have no incentive to.

A compromise measure allows regional NFS officials greater autonomy in making environmental management decisions, but also provides for audits by independent groups. Note, though, that forestry officials will now have greater choice in determining the extent and makeup of the audit teams. Some additional regulations are significantly altered. For example, a current regulation requires forest managers to keep all fish and wildlife species from going extinct. This regulation has changed so that managers will simply be required to consider the "best available science" in determining the most appropriate usage of all natural resources.

Questions
1.

From an economic perspective, would such de-centralization - that is, allowing decisions to be made away from a more centralized bureaucracy - create greater efficiency? Why or why not?

2. The last paragraph of the survey discusses a change to a regulation regarding maintenance of fish and wildlife species. If a wildlife species, for example, were on the verge of extinction, what new issues would have to be considered before taking steps to either preserve the species or allow it to die off?
3. Government regulation of the forest is in place to compensate for the failure of the market to properly consider natural resource availability in private market decisions. Does this new regulatory process help or hinder that role of government. Why? Construct a brief essay defending or criticizing the regulations.
Source Felicity Barringer. "Administration Overhauls Rules for US Forests." The New York Times. 23 December 2004.

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