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VI. Conclusion

Passive reservoirs of earmarked revenues are unlikely to be the tools of choice for financial reform in the forest sector, and are unlikely in themselves to attract the positive attention of international partners. But national forest funds can be much more than passive reservoirs. Carefully designed funds, tailored to the problems at hand and strategically targeted on appropriate points of intervention, may have the potential to:

Ensure greater stability for forest financing, commensurate with forestry’s need for a long-term investment perspective.

Promote wider and more effective participation in forest management and decision-making. Funds can help shift power, in the form of money, information, and authority, to previously underrepresented groups, such as local forest communities.

Tap leverage points. By internalising externalities, funds can attract more private capital to sustainable forest management. Properly designed, a fund may attract more money to forestry than the fund itself directly controls.

Strengthen government forest institutions, by making them more accountable and by increasing incentives to carry out their mandates effectively and efficiently.

Harmonise the work of multiple donors. A fund whose objectives reflect the consensus goal of sustainable forest development can be an attractive vehicle in which diverse donors can pool their assistance efforts.

Yet it would be misleading to characterise the above list of potential benefits as concrete conclusions that emerge from the survey presented in this study. More appropriately they should be considered as hypotheses, in urgent need of further empirical research and testing. As has been stressed at several points already, the overall state of knowledge of national forest funds is poor. A synthetic analysis of the legislative foundations of funds provides valuable insights, but it has its obvious limitations — we know enough about forestry institutions in general, and forest funds in particular, to know that they routinely fail in practice to reflect the promise they show on paper.

What is needed now is a fuller and more detailed picture of how funds actually operate (or fail to operate), and a clearer understanding of the constraints different types of funds encounter under different conditions. Increased knowledge may well lead to a scaling-back of expectations in many settings, based on recognition that the potential contribution of a forest fund will vary greatly depending on the context. In countries where corruption is endemic in the forestry sector, for instance, there may be little reason to believe that creation of a forest fund alone will contribute much towards greater accountability, or that operation of that fund will be free of the same ailment, however well drafted the procedural safeguards. Similarly, professional fund management and sophisticated strategies designed to leverage private investment may be achievable in some countries, but in many others these may simply be out of reach for the near future.

A number of overarching questions also remain, several of which are implicit in the brief review of arguments and counter-arguments presented in Part IV. In what circumstances, for example, might the potential benefits of establishing a fund be considered to outweigh concerns about undermining a unified approach to national budgeting? And on what bases can we conclude that creating a fund is the best strategy — or even among the best strategies — for achieving certain ends? To argue that a properly designed fund can promote accountability, participation, private sector investment, etc., in a sense begs a larger question: how can we determine the relative effectiveness of this tool in promoting these objectives vs. other available institutional mechanisms? What are the costs and benefits involved?

It is unlikely that full consensus can be reached on these and similar questions, given the different theoretical vantage points from which different disciplines view the question of national forest funds. However, it is certain that more systematic research on funds can help immensely in clarifying the debate, and in developing a better methodological framework for countries to use in designing and testing funds that are tailored to their specific needs.



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