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Decision‐makers are keen to learn which policy instruments are most effective at producing forest conservation outcomes. Using data from a patchwork of programs designed to preserve the overwintering habitat of the Monarch butterfly in central Mexico, we compare the effectiveness of three conservation instruments in limiting deforestation and forest degradation: protected areas, payment for ecosystem services (PES), and forest management. Using a matched sample of one hectare parcels and a spatial lag model of deforestation, we find that for preserving forest, PES is the most effective. Protected area status is ineffective for forest protection while forest management permits also help preserve forest. Forest degradation is not limited by PES or protected area status alone, but the combination of the two instruments significantly reduces forest degradation. Forest management, however, has the largest effect on limiting forest degradation.


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