Forest Figures: Ecosystem Services Valuation and Policy Evaluation in Developing Countries

We review the evidence on the economic values of forest ecosystem services in developing nations and the effectiveness of policies aimed at protecting these services. We conclude that, despite a plethora of publications, the literature is thin, with few well-designed studies that can provide a coherent picture of ecosystem values or policy effectiveness. Although ecologists coined the term ecosystem services and have led much of the recent research, ecosystem services is fundamentally an economic concept. This offers economists a unique and important opportunity to contribute to the emerging literature on ecosystem valuation and policy effectiveness. Most importantly, we conclude that the most fruitful path for future inquiry is to more tightly integrate policy and research by conducting studies that combine nonmarket valuation and impact evaluation (i.e., valuation estimates based on observed impacts in the context of real-world programs). We believe that investing scarce research funds in such an integrated approach will increase the likelihood that future research on ecosystem services will yield high-quality evidence of practical use to policymakers.