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Many tropical countries continue to devolve forest management to forest‐dwelling communities. The assumption is that local knowledge of forests and community engagement in forest management will attain multiple social and environmental co‐benefits, such as poverty alleviation and reduced deforestation and fires. Evidence for this, however, is scant, commonly hampered by data availability and a lack of technical capacity for implementing statistically robust impact evaluations. Based on a practice‐based review of policy implementation, impact evaluation of case studies and examples of counterfactual analyses from Indonesia, we demonstrate that it is increasingly feasible to determine the conditions under which community forest management will most likely achieve its social and environmental objectives. Adapting community forest management implementation based on feedback from accurate impact evaluation could lead to positive outcomes for people and environment in Indonesia, and across the tropical realm.

Community forestry is a participatory approach aiming to achieve sustainable forest management while also reducing poverty among rural communities. Yet, evidence of the impacts of community forestry programmes on both forest conservation and poverty alleviation is scarce, and there is limited understanding of impacts across different social and biophysical contexts. We applied a matching method to assess the extent to which deforestation has decreased and village well-being has improved as a result of Indonesia's community forestry scheme, Hutan Desa (Village Forest). We assessed five dimensions of well-being: basic (living conditions), physical (access to health and education), financial (income support), social (security and equity) and environmental (natural hazard prevention). We found that Hutan Desa was associated with reduced deforestation and poverty. ‘Win-win’ outcomes were found in 51% of cases, comprising (a) positive outcomes for both forests and poverty, (b) a positive outcome for one aspect and a negligible outcome for the other, or (c) a positive outcome for poverty in areas where natural forest had already been lacking prior to Hutan Desa tenure. Benefits to forests and people systematically differed depending on land-use zones, reflecting subtle interactions between anthropogenic pressures and community livelihood characteristics. In Watershed Protection Zones, which are dominated by subsistence-based forest livelihoods, community forestry provided mild conservation benefits, but resulted in the greatest improvements in well-being through improved land tenure. In Limited Production Zones, community forestry provided modest benefits for both conservation and well-being because restrictions on timber harvest due to Hutan Desa designation reduced the financial well-being of logging communities. The greatest conservation benefits were experienced in Permanent or Convertible Production Zones, but well-being improvements were minimal. Here, living cond