Efficiency of Polish forest management during the transition to a free market econom

This dissertation presents a study of the efficiency of Polish forest management following the transition to a free market economy. The objective is to determine how well the State Forests, which manage 80% of Poland's forestland and supply 85% of its timber, have adjusted after 40 years of central planning to this change. This is done first through the discussion and evaluation of recent forest legislation and policies that have shaped the change. Then, the development and estimation of stochastic frontier production and cost functions are used to analyze and evaluate the efficiency of state timber production and management policies.;The discussion demonstrates that recent forest legislation and policies are poorly adapted to a free market economy because they allow for the continuation of traditional forest management. This management is generally unresponsive to prices, factor costs, and the discount rate. The continuation of traditional forest management can be explained as historically appropriate forest management which has failed to adjust to modern market conditions. This results from a very restrictive interpretation of forest legislation and has led to continued inefficient utilization of forest resources.;The empirical results provide strong evidence for the presence of substantial technical and cost inefficiencies, along with scale economies in timber production. Furthermore, the results demonstrate that the current State Forests' policies related to the creation of smaller forest districts, the reduction of employment, and the purchases of modern logging equipment are largely ineffective and only serve to increase timber production costs. On the other hand, the results show a strong support for the continued privatization of forest operations.;It is concluded that the State Forests face substantial opportunities to reduce their operation costs and improve their finances. In order to achieve these goals, forest managers must increase the efficiency of timber production, explore scale economies, continue the privatization of forest operations, reduce employment, and stop unsound investment programs.