Conclusions and Recommendations

Although the Bureau of Land Management was created more than forty years after the Forest Service, it is cast from the same Progressive mold. In the Progressive model of government, Congress sets policy and appropriates funds while agency officials manage public lands in the public interest. No one is assumed to have an incentive to do anything other than what is best for the nation.

Reality is far different. In timber, grazing, minerals, and recreation, we find the same pattern: Congress wants pork. Agency officials want bigger budgets. BLM budgets grow when Congress decides that a particular program makes good pork or lets managers keep their own receipts. This means:

Under the Progressive model, the environment and taxpayers both lose when Congress and agencies follow their natural tendencies to produce pork and maximum budgets. A new model is needed, one that only Congress can implemented.


One possible alternative to the Progressive model is the micromanagement solution. This would call, for example, for detailed legislation describing how much profit BLM sales should make and when and if the BLM could be allowed to sell timber at a loss, as well as specific laws defining how much timber the BLM can cut from each district and how it should calculate its allowable sale levels.

This is the solution advocated by many environmental groups. Other than the fact that environmentalists have been unable to convince Congress to pass such detailed laws for any federal resource agency, the micromanagement solution suffers from two critical flaws.

A second strategy might be termed the regulatory-plus-oversight solution. Congress sets a few basic standards and guidelines and expects the agency to write detailed rules to meet those standards. Congress follows up with regular oversight activities to make sure that the rules are being followed.

This is basically Congress' policy today, though some might argue that Congressional standards for such things as below-cost sales are too vague. But this alternative suffers from the same problems as micromanagement: Congress has neither the time nor expertise to provide oversight, so it ends up writing standards in vague language so that all sides think they have one--when in fact the only winners are the lawyers who endlessly test those standards in court.

So new micromanagement, new standards, new accounting systems, and new oversight practices are not likely to significantly change the BLM. Take, for example, below-cost sales. Does the BLM lose money on timber because it fails to get market value for its timber? Or because its costs are higher than they ought to be? The real answer is that it loses money because it doesn't have to face the discipline of the market place that private timber producers face. As a result, its costs may be too high, its prices too low, and it may be selling timber that isn't worth selling in the first place.

The micromanagement solution requires that Congress scrutinize every dollar of the BLM budget to insure that costs are low and waste is minimal, even as Congress specifies the exact procedures for appraising and selling timber. The standards-and-oversight solution is for Congress to outlaw below-cost sales and then hold frequent hearings to make sure that the BLM obeys the law.

The Incentive Solution

A third solution that Congress can try is to focus not on the outcomes but on the incentives that motivate agency managers. Incentives, particularly budgetary incentives, can have a significant and predictable influence on federal resource managers. For example: BLM managers have the best of intentions for the public's land. But when Congress almost automatically gives them a billion dollars each year, considerations other than efficiency become paramount. In many cases, this means that the BLM sells resources simply because it has the funds to do so.

Any institutional design creates incentives for managers. The decision we must make is, which incentives do we want to give to BLM managers? The incentives they have today are to sell resources at a loss. Those incentives will remain so long as the BLM's budget comes from Congress and despite any amount of monitoring by environmental groups. The only lasting solution is to untie the BLM from Congressional appropriators.

What about cases where commodity resources can make money but other resources are more valuable? Such resources will be protected only if BLM managers have incentives to protect them. One way of doing this is to allow managers to charge fees for competing resources such as recreation. Incentives for multiple resources can then produce a true multiple-use management of the nation's public lands.

The incentive solution does not require that Congress be aware of or understand every aspect of on-the-ground forest management. Ideally, in fact, the incentive solution would largely remove Congress, and its predilections for pork and extractive uses, from the picture.

New BLM Incentives

The Thoreau Institute proposes to reform the Bureau of Land Management with a combination of market incentives and institutional checks and balances. These incentives, checks, and balances will promote sustainable land and ecosystem management without the constant vigilance of citizen monitoring, lawsuits, and lobbying--a vigilance that environmentalists have not particularly displayed with regard to most BLM lands.

The Thoreau Institute's BLM reform proposals are:

  1. Set up each BLM district as an independent land trust. Title to the land would be held by the federal government, but the land would be managed by the land trust.
  2. Anyone would be allowed to join a BLM district land trust on payment of a nominal annual fee--perhaps $20 per year. Land trust members would vote on who is on the board of trustees. The board would hire and fire the district manager and approve the district's annual operating plan.
  3. Each land trust would be allowed to charge user fees for all resources within their care, including timber, forage, minerals, recreation, and (where authorized by state laws) water.
  4. Land trusts would be funded out of the net income they earn each year. That net would be simply calculated by a U.S.D.I. auditor at the end of each year who would ask a) how much did the land trust receive and b) how much did it spend. The difference--the net--would be added to the land trust's funds. Congress might provide seed money for the first year equal to the district's prior-year budget.
  5. Revenues that the land trust did not get to keep--an amount equal to its costs--would be divided between counties, the U.S. Treasury, and a biodiversity trust fund according to some formula. The Thoreau Institute suggests that counties get 15 percent of gross receipts, the biodiversity trust fund 20 percent, and the Treasury the rest, a percentage that would vary from year to year.
  6. The biodiversity trust fund would be managed by a biodiversity board of trustees appointed by, say, the Secretary of the Interior. The board would be allowed to use the money in any way it deems fit so long as it is spent protecting and improving biodiversity. This may include buying land, paying federal land trust managers for conservation easements or to use or avoid selected practices, or pay land owners or land managers "bounties" when their land provides breeding habitat for rare or endangered species.
  7. Congress could revoke the charter of any land trust that significantly abused the resources within its care. This would be Congress' only role in federal land policy after the land trust system is set up.
  8. Minerals underlying BLM lands should be managed by the BLM using the same rules as other resources. Minerals underlying other federal lands should be transferred to the agencies managing those lands so that those agencies can make decisions on a true multiple-use basis.

Checks and Balances

This comprehensive proposal may seem radical. But Congress is in the mood for major changes in federal land policy, and the changes proposed here should be attractive to both Republicans--because of the proposal's fiscal conservatism--and Democrats--because of the proposal's environmental safeguards.

The only way to solve the basic problems identified in this report--problems of waste, subsidies, and nonsustainable timber cutting--is to provide BLM managers with new incentives that balance resource uses and discourage subsidies. The Thoreau Institute's proposal is designed to meet this objective.

The checks and balances in this system are far superior to those in place today or any possible under a system of Congressional micromanagement or standards and oversight. The land trust system's checks and balances include:

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