This paper sets up a dynamic model to study the distributive effects of privatizing an open access resource. We show that with or without discounting, privatization is not always Pareto improving. We further derive conditions under which the poor are made worse off when private use rights are equally distributed compared to a situation with open access resource. These conditions imply that privatization is Pareto improving if the natural resource is sufficiently productive, inequality in alternative private project opportunities is low, and if there is no discounting. In addition, we show that once reduction in income from resource harvesting during the transition to a new steady state is accounted for, privatization is desirable for the poor only for very productive natural resources and low discount rates.

Community-based natural resource management (CBNRM) projects and policies often aim to improve the livelihoods of rural people who depend on natural resources, and to promote democratic decision making and equitable benefit distribution at the local level. However, a growing number of critics argue that CBNRM is susceptible to elite capture. This paper contributes to the debate on elite capture under CBNRM by studying joint forest management (JFM) in Andhra Pradesh (India) and, in particular, the case of Mohammed Nagar village. The paper addresses the following four questions: (1) How has the Indian Government formally addressed the risk of elite capture? (2) What actually happened over time when formal structures of JFM interacted with the pre-existing social structure in Mohammed Nagar? (3) When JFM results in elite capture, is this owing to the formal structures and/or the pre-existing social structure? (4) How can CBNRM be designed to avoid or minimize elite capture? Based on a reading of official government documents, the Indian Government has addressed the risk of elite capture, by ensuring representation of different social groups in the decision making bodies, regular elections, collective action in rule making and implementation, and transparency in record keeping. Nevertheless, during Mohammed Nagar's 10 years of JFM history elite capture did occur. This confirms that elite capture is a possible outcome of CBNRM. Yet, the subsequent fall of elite capture in the village also indicates that this is not necessarily a permanent outcome, and that CBNRM may in fact promote democratic and equitable resource management in the long-term. In Mohammed Nagar elite capture was largely owing to pre-existing social structures and to weaknesses in the official rules that were meant to safeguard the interests of marginalized groups. Accordingly, in CBNRM project design and implementation, pre-existing social structures' potential promotion of elite capture need to be taken into account and formal measures that might alleviate the adverse effects and/or reduce this risk must be identified.