Management and a forest of poor incentives

Bozeman is clearly the epicenter of the people who have long studied how institutional arrangements affect the quality of natural resource and environmental management. In these arenas, as in all others where chance does not determine the outcome, decisions depend on two things, information and incentives. There are many types of incentives including cultural, financial, religious, reputational and status. Management that produces good outcomes, however they are measured, is dependent on the quality of information readily available and the incentives to act responsibly upon it. To deny this reality and assume that somehow bureaucrats armed or imbued with an ideology based on good intentions and pious pronouncements is worse than naïve, it's morally, economically and environmentally irresponsible. This is one lesson from the great forest fires of 1910 whose centennial we observed last weekend. The Big Burn hit 10 national forests in Idaho, Montana and Western Washington. It covered three million acres, one and a half times the area of Yellowstone Park, and killed 78 firefighters. After the devastation of the Big Blowup, the U.S. Forest Service decided to battle against every wildfire. And, of course, now firefighting drives its budget. The lesson is clear, incentives matter. There is no better illustration of the ecological problems associated with bureaucratic land management than the century-long saga of the United States Forest Service, an agency that was once revered as the world's premiere conservation agency...more