Association for Public Policy Analysis & Management

Policy makers all over the world tout decentralization as an effective tool in the governance of natural resources.  Despite the popularity of these reforms, there is limited scientific evidence on the environmental effects of decentralization, especially in tropical biomes. This paper presents new evidence on the institutional conditions under which decentralization is likely to be successful in sustaining forests. We draw on common pool resource theory to argue that the environmental impact of decentralization hinges on the reforms’ ability to engage local forest users in the governance of forests. Using matching techniques, we analyze longitudinal field observations on both social and biophysical characteristics in a large number of local government territories in Bolivia (a country with a decentralized forestry policy) and Peru (which has a more centralized forestry policy). We find that territories with a decentralized forest governance structure have more stable forest cover, but only in places where local forest user groups are actively engaged with the local-government officials. We provide evidence in support of a possible causal process behind these results: when user groups are actively engaged with the decentralized units, these groups help produce a more enabling environment for the effective governance of forests, including more local government-led forest governance activities, forums for the resolution of forest-related conflicts, inter-municipal cooperation in the forestry sector, as well as improved technical capacities of the local government staff.