A tale of transaction costs and forest law compliance: Trade permits for Non Timber Forests Products in Cameroon

There are growing concerns about illegal activities in the forestry sector and some work is in progress to understand the causes and consequences of noncompliance to forestry laws. However, most research on illegal forest activities deals with illegal timber harvesting with little efforts on other activities like Non Timber Forest Products (NTFP). In Cameroon, commercial exploitation of most NTFP is regulated by a permit system. However a majority of traders who sell these products do not have the necessary permits. The objective of this paper is to assess and use transactions costs economics (TCs) to explain why traders in Cameroon do not comply with regulations on permits. Results show that the process to obtain permits may require more than 26,000 USD and may require regular monitoring during a time span of more than 4 years. Analyses of traders’ perceptions illustrate that the major sources of high TCs in the forest sector are the perceived complex administrative procedures and information asymmetry on procedures and the requirements to obtain permits. The study concludes that it is the impracticality to abide to high TCs rather than the inclination to disobey the law that pushes traders to operate without permits.

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