By Diana Schoder,
When the Brazilian government banned mahogany logging in 2001, they seemed to have achieved an environmental victory. The new regulation took effect, and exports of mahogany dropped dramatically.
Then something strange started to happen. Exports classified as “other tropical timber species” were on the rise — just as mahogany exports began to decline. Mahogany exports were continuing to leave the country in the guise of other species, creating an illicit market that accompanied prohibition. Soon thereafter, Greenpeace and other environmental groups denounced this illegal mahogany trade.
Prohibition was failing to shut down the mahogany market, but that was not its only problem. In a new paper in the October issue of the American Economic Journal: Applied Economics, authors Ariaster Chimeli and Rodrigo Soares show how prohibition spurred an increase in violence.
Before this, researchers had not been able to isolate a causal effect of illegality on violence. Much of the evidence came from the drugs market, where establishing the link between violence and illegality was difficult because of complicating factors, such as the psychological effects of drug use.
The mahogany market, however, did not share these reasons for concern. If municipalities saw different levels of violence before and after prohibition, in areas with and without mahogany trees, and in places with high and low levels of mahogany production, then the authors could attribute those differences to prohibition.
The authors found that municipalities most affected by the mahogany industry — those with a natural occurrence of mahogany and high levels of production — experienced an increase in homicides after prohibition. This increase was on top of the rising violence that municipalities faced when Brazil implemented strict regulations on the mahogany industry in the years leading up to prohibition. In 2008, the Brazilian government ramped up its monitoring and enforcement initiatives, resulting in a drop in homicides.
These patterns were especially clear in Pará, a state that generated seventy percent of Brazil’s legal mahogany before prohibition. For the median municipality in Pará, prohibition caused five additional homicides each year between 2002 (the beginning of prohibition) and 2008 (the stronger enforcement initiatives). In total, for all municipalities in Pará, the illegal mahogany activity caused an additional 5,171 deaths between 1999 and 2013.
Read more in AEA