This paper reviews the expectations for forestry's contribution to rural de
velopment - and for its special contributions to the most disadvantaged, to
women and the landless users of the forest commons. A growing literature c
hallenges some of these expectations; in particular, certain expectations a
bout cultural differences and physical stocks as explanatory factors for pa
tterns of household behavior. This literature could also be used to support
a call for sharper definitions of deforestation, improved indicators of th
e effects of forest resources on the rural poor, and improved design of for
est policy interventions. Our paper reviews the literature, suggests some u
nifying themes, and identifies the critical issues that remain unanswered.
The primary contention arising from this literature is that households foll
ow systematic patterns of economic behavior in their consumption and produc
tion of forest resources, and that policy interventions in social forestry
should be analyzed with regard to markets, policies, and institutions. Mark
ets for forest resources generally exist in some form - although they may b
e thin. Successful forestry projects and policies require careful identific
ation of the target populations and careful estimation of market and market
-related effects on the household behavior of these populations. Institutio
nal structures that assure secure rights for scarce forest resources are un
iquely important in a forest environment often characterized by open access
resources and weak government administration. Social and community forestr
y, improved stoves, improved strains of multi-purpose trees, and even priva
te commercial forest operations can all improve local welfare, but only whe
re scarcity is correctly identified and the appropriate institutions are in
place. An increasing number of observations of afforestation from developi
ng countries around the world is evidence that forestry activities do satis
fy these conditions in selective important cases. The critical point for po
licy is to identify the characteristics of these successful cases that are
predictive of other cases where new forestry activities can be welfare enha
ncing.