State Spending and Governance: A Cross-National Analysis of Forest Loss in Developing Nations

Conservationists and academics have long investigated the factors that impact forest loss in low- and middle-income nations. Characteristics of the state, namely state spending, may impact forest loss in low- and middle-income nations, although this relationship has been understudied and the limited research that exists has yielded contradictory results. I begin by reevaluating the relationship between state spending and forest loss using robust regression models for a sample of 97 low- and middle-income nations. Initially, in line with extant literature, I find no support for the idea that state spending is related to forest loss. However, I respecify the models to consider if state spending interacts with governance factors including political stability, control of corruption, rule of law, government effectiveness, and regulatory quality. Governance is defined as the state's ability to formulate, implement, and manage the nation's funds, policies, and procedures effectively. I find that state spending reduces forest loss more in nations with higher levels of governance than at lower levels of governance.