and not statistically significant positive effects. There were no differential impacts by deforestation risk ( **Appendix Table A9** ).

Finally, because the distribution of payments is often not directly to _ejido_ or _comunidad_ members but rather through community investments, we tested whether households that directly received payments experienced differential increases in wealth (see **Appendix Table A10** ). Generally, we did not find positive and significant impacts for those households. This is most likely because the decision of whether or not to distribute payments in this way is highly likely to be endogenous to community wealth levels – in other words, poorer communities may be more likely to distribute cash payments directly, which results in biased estimates of the effect of such payments on wealth.

# **5.4 SOCIAL CAPITAL**

**Table 9** presents impacts on social outcomes at the community-level (Panel A) and household-level (panel B).<sup>18</sup> The first row shows that PES payments increased the community-level social capital index for those cohorts with longer exposure to PES (a 15.3% increase compared to the mean value for the controls); as well as for the 2013-14 cohorts (6.7%). The effect on the social capital index is 8.6% when combining both cohorts. Results are consistent across the different specifications. Although in percentage terms these changes are relatively small, they are large relative to the variation in the data. The effect sizes are 0.65, 0.35 and 0.40 standard deviation for the earlier, later cohorts and both combined, respectively.

Panel A shows program impacts on the sub-indices that make up the community-level index. We find suggestive evidence that the intervention increased both the trust and the infrastructure sub-indices (each by 22%) for the 2011-12 cohorts; and the infrastructure sub-index for the 2013-14 cohorts (24.1%). For both cohorts combined, the intervention increased communal infrastructure by 19.8%.

Panel B of **Table 9** indicates that there were no significant changes in household-level measures of social capital. We find no significant effects for the sub-indices of Trust and Participation, nor for the aggregate index across all samples. In addition, we find no evidence that the increased participation in land-cover work crowded out unpaid contributions to other pro-social community work, such as building roads or maintaining communal infrastructure (see Panel B of **Table 7** ). For the social capital indexes and its sub-indices, we ran similar robustness checks to those we ran for the forest management index; results do not substantially change (see Tables S4 and S13 in the Supplementary information for Alix-Garcia et al., 2018).

One possible concern with the social capital analysis is that the process of applying for and being rejected by the program might impact the controls (e.g., the application process could bring the community together or lead to disharmony lowering social capital among the control communities), which could violate the excludability assumption While we cannot fully test this possible threat to validity as we do not have true pre-treatment measures of social capital, we did examine social capital measures among the control group for those who were rejected once versus multiple times. We found no statistically significant differences or substantial normalized differences among social capital measures for those rejected multiple times (see Table S14 in the Supplementary Information for AlixGarcia et al., 2018). This suggests that the process of applying is not related to underlying social capital.

> 18 These results are also published in Alix-Garcia et al. 2018.

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