Ownership and Control in Mexico’s Community Forestry Sector

Ownership and control are rarely synonymous. This paper examines the factors motivating Mexican agrarian communities with forests to participate and invest in timber production activities, an opportunity which has opened in the last twenty years due to changes in Mexican forestry policy. We propose that contractual difficulties with downstream production services and buyers lead community members to forward integrate into the wood production industry to enjoy greater benefits from production. An incomplete contracting model frames our analysis while original community-level data from Oaxaca, Mexico serves as the basis for empirical quantification. Using measures of specificity of investments, uncertainty, multiple uses of the forest, and managerial and labor expertise, it is found that communities with higher levels of human, social and resource capital endowments are more likely to integrate forward into timber processing activities