Effect of capacity building in alleviating poverty and improving forest conservation in the communal forests of Mexico

•A quasi-experimental approach is used to test the effect of building capacities on communities.•Capacity building has a statistically positive effect on reducing poverty.•Building human/social capacities is more effective than providing economic capacities.•Capacity building has no effect on forest conservation in communities managing their forests. Community Forestry has been identified as a secure, profitable, and equitable strategy to reach the dual goal of forest conservation and poverty alleviation. This research contributes to the literature exploring the effects of local capacity building in forest communities by analyzing the Community Forestry Program (CFP) in Mexico. This program provides grants to enhance four types of local capacities: human, social, economic, and environmental. We used a quasi-experimental approach to quantitatively compare matched treatment and control communities regarding the effect of these interventions on two response variables: poverty alleviation and forest cover conservation. The treatment and control communities were assessed at two points in time: pre-intervention and after a 5-year treatment period. This approach was possible because we had access to a rich database of CFP grants containing more than 20,000 records from which we identify 5074 that meet the criteria for our study. Impact on poverty is assessed using a Marginality Index produced by a federal agency. Effect on forest cover conservation is evaluated by using two proxies, the rate of change on: forest cover and on forest cover fragmentation. Our results show that enhancement of only human/social capacities or all capacities as a package significantly reduce poverty. However, the first ones have a greater impact that the latter ones. Neither human/social capacities enhancement, nor all-capacities enhancement had a statistically significant effect on forest cover conservation. These findings can assist in better designing and targeting future CFP grants in Mexico. Also, they have implications for public policy since capacity building is cheaper than any other poverty alleviation mechanism such as direct cash transfers or subsidies. Furthermore, they have long-lasting impacts that do not require regular periodical contributions and they don’t discriminate by gender, or by the requirement on individual community members of having land ownership rights within the community’s land holdings.