The nature of public good of the forest, and also the failures and short-sightedness of the market, these are the main motivation that justify forestry institutions. Using Musgrave distinction to frame the forests as a merit good and, potential, demerit good, Author provides a different interpretation of the reasons for the presence of forest institutions and outlines the two general aims that should characterize their action: pursuing policies to enhance the merit function and also policies for safeguarding the forest from degradation processes. Reflecting on the experience of national forestry institutions, them have always been operated towards what we now call sustainable forest development. In this role institutions have played an indirect way on the timber market, reducing the degrees of freedom of the forest owners and the logging company. This was done by defining requirements, procedures and technology standards and results, which effect is the transaction costs in the forestry accounting. For the latter, the study provides a social interpretation, however, given inefficiency that frequently characterized forest institutions, the author indicates strategies to reduce them monetary impacts.
Keywords: Institutions, forest firms, logging companies, transaction costs, timber Market
Jel Code: Q23, Q57