NTT SANDALWOOD: ROOTS OF DISASTER

For decades the government of Nusa Tenggara Timur (NTT) province has exploited the sandalwood sector, to the detriment of the growers of the trees. Severe depletion of the stock of sandalwood in the province has been the result. This paper documents NTT policies toward the sector, which it argues have been both inefficient and inequitable, and offers a detailed approach for reform. It also examines the political economy of these policies, and argues that the case of sandalwood provides an example of the dangers of decentralisation of economic authority in the absence of local democracy.