Oil, Macroeconomics and Forests

Abstract

This chapter deals with the last twenty-five years of Ecuadorean history, which have been characterized by the most important structural change in the economy since World War II: the rise in oil exports. Not only was there a permanent change in income and trade structure, but the dynamics of deforestation also changed compared to those described in the last chapter, mainly because domestic markets and economic policy had a larger role to play. This also gives an opportunity to test some hypotheses from Chapter 1: first the external macroeconomic framework is outlined, then the domestic policy response and sectoral adjustment are analysed and, finally, the alleged impacts on forests are assessed.