The effectiveness of state forest development corporations in India: an institutional analysis

This article reviews the performance of various State Forest Development Corporations of India which have existed for around 25–30 years. It looks at various factors, both macro and micro, which explains why the Corporations performed dismally in the past. Micro variables are important at the local level whereas the macro variables shape the performance at the national level. At the micro level, several factors have affected the functioning of these organizations, including structural, cultural , and organization-specific variables. At the macro level, technological, legal , political , and market-related phenomena have added pressure on them and impeded their performance. For example, legal control of trade in nontimber forest products has had very negative effect on the industry and in turn on the Corporations in general. As far as social welfare role is concerned, Corporations have done reasonably well and benefits of markets have been passed on to tribal collectors in terms of increased income and employment. The study uses a number of criteria for evaluation of Corporations which are grounded into the theory of instrumental rationality, including organizational performance, financial performance, resource extraction sustainability, social welfare, and dynamic capability. Using these criteria, most Corporations have performed sub-optimally and many are in a financial turmoil. Finally the article reviews various models of nontimber forest products management and concludes that in the Indian context there is a need for more decentralized type of management. It proposes promotion of community-managed systems of nontimber forest products with government support as facilitator.