Incentives faced by local bureaucrats partially explain deforestation in Indonesia. As districts split over time, the power of bureaucrats to obtain rents decreases and, as a consequence, they allow more illegal logging. When alternative sources of revenue increase, such as oil or gas, then deforestation decreases, because bureaucrats have more to lose from being found engaging in illegal activity in the forest sector.
Burgess et al. (2012) Quarterly Journal of Economics