Devolution is a promising tool to enhance forest management. The literature has discussed many factors that affect the outcomes of forest devolution policies; however, insufficient attention has been paid to the role of exogenous socio-economic changes. Using the longitudinal case study method, we focus on how socio-economic changes affect the effectiveness of forest devolution policies using a case from Southeast China. We find that in this case, although forest devolution succeeded in granting farmers sufficient forest rights, it failed to incentivize farmers to contribute to managing forests because of the dramatic changes in socio-economic contexts. Economic development and outmigration reduced farmers' dependence on forest income, elevated the costs of silvicultural operations, and posed market risks, thereby reducing farmers' enthusiasm about managing forests; outmigration also weakened community leadership and impeded the collective action of making forest investments. Eventually, socio-economic changes compromised the positive stimulus caused by forest devolution and contributed to the collective action dilemma of managing forests after the reform. We argue that operationalizing forest devolution in developing countries needs to consider the exogenous socio-economic changes that may enhance or counteract the effects of devolution policies, and that more autonomy should be granted to communities to make policies adaptative to their local socio-economic dynamics.Land 2020, 9, 58 2 of 18 Although forest devolution has drawn great attention from scholars, limited literature has delved into how exogenous socio-economic changes influence the effectiveness of forest devolution policies. This question is of vital importance. The effects of forest devolution take a long time to manifest [6], and during this period, many exogenous socio-economic changes may occur. These socio-economic changes, which are particularly remarkable in developing countries, may exert contrasting effects on the behaviors of resource users and the outcomes of resource management [14][15][16]. On one hand, socio-economic changes pose challenges to natural resource management. For example, economic development may reduce farmers' dependence on resources and diminish farmers' conservation incentives [17,18]; economic development may also increase farmers' endogenous rate of discount and prompt them to adopt short-sighted resource use strategies [16]. Outmigration may decrease the labor supply and make farmers use more pesticides and fertilizers to maintain agricultural outputs [19]; outmigration may also elevate the costs of returning homes and impede the collective actions of managing resources [15,20]. On the other hand, socio-economic changes may contribute to resource restoration and ecological sustainability by relieving farmers' livelihood pressures and strengthening their conservation awareness [14,21,22].Since socio-economic changes substantially mold the behavior of natural resource users, they are likely to play important roles in t...