Levels of transaction costs in community-based forest management (CBFM) in four communities adjacent to the Ambangulu mountain forests of the north-east of Tanzania were assessed through questionnaire responses from 120 households. Costs and benefits of CBFM to the rich, medium and poor groups of forest users were estimated. Costs of CBFM were participation in forest monitoring and time spent in meetings. Benefits included forest products consumed at household level. Transaction costs relative to benefits for CBFM were found to be higher for poorer households compared with medium income and richer households. Higher income groups obtained the most net benefits followed by medium and poorer households. Community involvement in forest management may lower the transaction costs incurred by government, but a large proportion of these costs are borne by poorer members of the community. Transaction costs are critical factors in the success or failure of CBFM and need to be incorporated into policies and legislation related to community-based natural resource management.
