The political economy of timber taxation: The case of Ghana

We analyze the political economy of timber taxation in Ghana. Our results show that politicians maintain control over allocation of timber rights, that taxation constitutes an insignificant share of the value of the timber resource, and that the distribution of timber revenues hardly contributes towards the official forest policy justifications. Our analysis suggests that politicians wield control over rent-seeking opportunities that are exchanged for political support through patron–client networks. This speaks to a larger literature on why governments waste resources and constitutes an argument for increased attention to the political economy underlying natural resource policies.

► We examine the political economy of timber taxation in Ghana.
► We study allocation of rights, fee levels and distribution of revenues.
► Results show discretionary control over allocation and low fee levels.
► Analysis suggests political control over rent-seeking opportunities.
► Increased attention to the political economy underlying natural resource policies.