Economic growth, institutions, trade openness, and the deforestation mitigation in an agriculture-based economy: an empirical analysis from Côte d’Ivoire

Deforestation is becoming an increasingly serious concern for tropical countries. Therefore, it is important for policymakers to know some levers that contribute to reducing deforestation and reversing the trend. This paper investigated the effects of economic growth, political institutions and trade openness on forest cover in Côte d’Ivoire over the period from 1980 to 2018. To do so, the data and variables were analyzed using unit-root, causality and cointegration tests. Then, the Autoregressive Distributed Lag (ARDL) technique was applied to figure out the short- and long-run relationships. Cointegrating regression models, like the Fully Modified Ordinary Least Square (FMOLS), the Canonical Cointegrating Regression (CCR) and the Dynamic Ordinary Least Square (DOLS), have been employed to check the robustness of the estimates. Results of causality tests revealed two long-run bidirectional causal links, one between agricultural land and forest cover showing a very close and complex relationship between forest cover and agricultural land, and another between agricultural land and institutions. Four unidirectional causal relationships were also identified indicating the key role of institutions’ quality in deforestation in Côte d’Ivoire. The empirical estimation results confirmed the harmful effects of agricultural pressure on forest cover: 1% percent increase in agricultural pressure causes a more than proportional decrease (− 1.2%) in forest cover. Findings support the existence of the environmental Kuznets curve for deforestation, which means that long-run economic growth contributes to reducing deforestation in Côte d’Ivoire. Results also show positive or mitigating indirect effects of the institutional variable on deforestation by reducing the negative impacts of agricultural pressure. All these findings show that it is imperative for policymakers to pursue the economic development of the country and implement policies of greater openness and of strengthening institutions’ quality for sustainable forest management and economic development.