Forest nationalization policies in Asia have often resulted in decreased local property rights over forests and users' short-term exploitative behaviour, leading to degradation of forests. Bhutan's centralized forest management structure was initiated with the Forest Act of 1969. This paper evaluates how nationalization of forests in Bhutan changed forest property rights and associated incentives and disincentives and management outcomes for leaf-litter forests (sokshing) and non-sokshing forests. Using the International Forestry Resources and Institutions (IRFI) research protocols, 12 sites across Bhutan's broadleaf zones were surveyed. Changes in forest property rights were analysed using Ostrom and Schlager's ‘bundles of rights’ framework. The forest nationalization policy changed the array of de jure rights that local people had over both traditionally community-used forests (the majority of forests) and small blocks of sokshings that were usually owned by a household and managed to produce valuable leaf litter for their agriculture livelihoods. There was more compliance with regulations in sokshing than in non-sokshing forests. Non-compliance of local people with forest conservation occurred in areas where the chance of being caught for rule breaking was perceived to be low or the costs of compliance were high. This was almost exclusively the case in non-sokshing forest in the form of widespread but low-intensity illegal tree cutting. The continuing significance of sokshing for agricultural livelihoods serves as a strong incentive for conservation of sokshings by rural people, even though the sokshings are under ultimate state control. The successful management of forests requires minimal difference between de jure policies and de facto practices for which rules that allocate property rights and the way those rules are enforced are important elements. Conservation and management rights of non-sokshing for communities would not only promote local stewardship, but also put the limited capacity of the Department of Forest to best use. Increased deforestation around villages may result, because modern development alternatives may make leaf litter insignificant for agriculture.

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Summary: A s t u d y conducted i n t h e conservation a r e a of Phobjikha (Wangdiphodrang, Bhutan) reveals t h a t t h e local perceptions of t h e benefits emanating from conservation of Black-Neckcd Cranes is greater than their perceptions of associated costs. This is solely attributed to the moral and aestheticvalue of cranes for their inherent magnificence and significance in local culture and traditions. No significant economic benefit was reported, while negative trends in viewing BNC conservation as a n obstacle to development became evident. Community identified issues show the needs of the local people in terms of economic development. This led Bhutan's only national conservation NGO, the Royal Society for the Protection of Nature (RSPN), to initiate the Black-Necked Crane conservation programme in the area, based on the concept of the Integrated Conservation and Development Programme (ICDP). Plans and programmes to enhance conservation as a basis for local economic development were developed and are currently being implemented. Challenges and constraints to developing the area into a model conservation and development area have been identified. The challenges and constraints in implementing the so called ICDP are multi faceted, involving multiple actors such as government sector agencies, NGOs, local people consisting of farmers, business entrepreneurs, and religious bodies together with their own development, economic, conservation and religious objectives.Heterogeneous community expectations for instant benefits a t individual level, national policies, lack of local initiatives, low human resource capacity and ad-hoc programmes of different agencies are constraints that potentially slow programme implementation. The overarching causes are lack of awareness and the low econpmic .standard of the local population that do not allow individuals to think beyond their own benefits. The challenge is for the human population in the area to gain a kairly good level of awareness about coordinated efforts that can enhance their participation in ongoing and future conservation and development programmes.