Several international treaties point to the advantages of a decentralized government structure for addressing environmental problems. Yet, little is known about the effects of decentralization reform on the conditions for local governance of natural resources. Even less is known about decentralization's effect on the condition of natural resources. This article raises concerns about the decentralization panacea and how it obscures a realistic assessment of municipal governments' role in decentralized natural resource management. The empirical analysis, based on field research in Bolivia's forestry sector, tests and discusses some of the conditions that are believed to be conducive to good decentralized governance of forest resources in developing countries. Specifically, the article examines what factors motivate Bolivian municipal governments to engage in forestry sector problem solving. Three institutional incentives appear to explain why municipalities in the Bolivian Lowlands would decide to invest in forestry, but these incentives are either weak or missing in most municipalities.
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