Evaluating the USFS State and Private Forestry Redesign: A first look at policy implications

Recently a shift has occurred in the way in which the United States Forest Service (USFS) distributes funds to states through its State and Private Forestry (S&PF) program. Traditionally S&PF has distributed money to states and territories formulaically. Now, under the 2008 Redesign Initiative, 15% of these funds are allocated through a competitive process. In this paper we analyze this initiative through the lens of institutional economics.Using budget, interview and survey data, we evaluate the new allocation process on the criteria of allocative efficiency, transaction costs, and distributional effects. Additionally, we examine a trade-off the Redesign Initiative faces between short-term innovations and funding programs that meet long-term USFS goals. We conclude that, while there is some positive evidence that the program is achieving some of its stated goals, it is doing so at the expense of higher transaction costs and less certain long-term projects. Moreover, we find that the lack of procedures to evaluate competitively funded projects is an important flaw that may prevent the new initiative from helping to create a high performing and adaptive governance system.