Incentive-based programs to reduce deforestation are expected to play an increasingly important role in global efforts to protect ecosystems and sequester carbon but their environmental effectiveness is not clear. We investigate program effectiveness and slippage in the context of Mexico's...

We investigate a Mexican federal program that compensates landowners for forest protection. We use matched controls from the program applicant pool to establish counterfactual deforestation rates. Deforestation was reduced by 50% in enrolled parcels, but expected average clearing rates without...