of the forest benefits are intangible and not easily captured by a standard household income survey. This leads to an _underestimation_ of the local gains of CFM.

As a third case, the community is used by the state to implement a certain solution, e.g., to manage a given community forest area under the condition that it should remain forest. For simplicity we assume that this area is set optimally taking both the agricultural and the full forest rents into account, i.e., in the global solution ( _d_<sup>_G_</sup> ). The community may capture a share of the global forest benefits, e.g., through a system for Payment of Environmental Services (PES) for carbon storage in standing forests. In the extreme (and unlikely) case when they capture 100% of the global benefits, the community’s net benefits from CFM is given by the triangle ABF.

Consider then the other extreme (or maybe not?) alternative where the local community capture nothing of the global (and national) benefits generated from CFM. The net loss, compared with the situation in our second case ( _d_<sup>_C_</sup> ) is given by ACD. Compared with the initial situation without CFM ( _d_<sup>_O_</sup> ), the net gain or loss is the difference between the gain DEF and the loss ACD. In other words, the community gain from some forest conservation by addressing the problem of internalizing local externalities. But, conservation goes beyond that point and addresses national and global environmental concerns as well without any compensation to the community. Thus they risk losing from CFM.

# **_2.5.3 Does CFM deliver?_**

The last couple of decades have witnessed a worldwide move towards decentralization/devolution of forest management, including CFM. Has this change delivered in terms of better forest management and conservation, and in providing more forest benefits to local communities, in particular the poor? What are the success factors?

The large literature on common property resource management has tried to identify under which conditions groups will successfully manage a resource held in common. Agrawal (2001) summarize this literature and list more than 30 such factors, related to the resource system and the group characteristics, the institutional arrangement and the external environments. Yet, as he notes, the literature suffers from two types of problems. First, the studies focus overly on the institutions governing the resources themselves, and neglect, for example, the external institutional and economic environment. Even in Agrawal’s article the role of relative prices and markets are treated in a rather cursory way under the label “articulation with external markets”. Second, the links and causal chains between the large number of variables are largely unspecified, making Agrawal to conclude that “existing work has yet to develop fully a theory of what makes for sustainable common-pool resource management” (page 1651).

Another shortcoming with many of the CFM writings is their strong normative flavour, attempting to demonstrate that this solution is superior to both individual (private property) and centralized control (Agrawal and Ostrom, 2001). In a meta-study of 69 cases of CFM by Pagdee et al. (2006), 58% (40) were considered successful based on an ecological sustainability criteria (the most typical measure was “improved forest condition”). The income, livelihoods and distributional criteria were more diverse and therefore more difficult to compare.<sup>34</sup> The general picture emerging from the assessments is, nevertheless, twofold: the overall success is mixed and less than what one hoped, and the success is _relatively_ better on the forest conservation side than on the income improvement side. There are also noticeable regional differences. Jumbe (2006), in another review of a number of CFM case studies, finds that the African cases tend to score low on both the conservation and income criteria (lose-lose), the Latin American cases are a mix of win/lose combinations, while the Asia (mainly South Asia) cases generally have scored well on the conservation objective but more mixed on the income objective.

> 34 See also the special issue on CFM of _Forest Policy and Economics_ , 8 (4), June 2006.

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