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Mr. Nalin M. Kishor, Mr. Muthukumara Mani, and Mr. Luis F. Constantino
An increasing number of tropical timber producing nations have enacted bans on export of logs. Proponents argue that a log export ban is a second-best policy tool for addressing environmental externalities; it also creates more jobs and improves scale efficiencies domestically. Theoretical arguments suggest that log export bans are largely incapable of achieving their objectives. However, little quantitative evidence exists. The authors maintain that eliminating log export bans in Costa Rica could generate economic gains as high as $14 million annually in addition to the environmental benefits.
Mr. Nalin M. Kishor, Mr. Muthukumara Mani, and Mr. Luis F. Constantino

deforestation will decrease because of the reduction in timber exports. In addition, job creation, capturing more value-added domestically, and improving the scale efficiency of domestic processing are also often given as reasons for such restrictions. Many developing countries thus look to timber trade restrictions as a means of achieving economic, environmental, and social objectives. Several justifications are offered why a timber export tax and, its most extreme form—a log export ban (LEB) should be implemented. Industrial processing of natural resources has long been