Land tenure insecurity and deforestation in the Brazilian Amazonia

This paper examines the effects of land tenure insecurity originating from land reforms on deforestation in the Brazilian Amazonia. A non cooperative game model is developed where natural forests are considered as an open access resource and the strategic interactions between landowners and squatters lead to an over deforestation. The main theoretical restriction is a positive impact of squatters on deforestation. It is successfully tested on a panel data set covering the municipalities of the Legal Amazonia controlling for the endogeneity of squatters in a deforestation equation. The result questions the modalities of the state-led land reform.