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Vietnam is ranked as the 16th most biodiversity rich country in the world. Many biodiversity conservation programs were designed in the early 1990s to address increasing threats, such as illegal logging and wildlife trade, to existing protected areas and national parks (NPs) in Vietnam. Using Bach Ma National Park as a case study, this paper analyzes both economic and non-economic incentives applied in the area to address drivers of deforestation and degradation. A policy review was conducted. Focus group discussions were carried out with Bach Ma National Park representatives and local people in two districts (Phu Loc and Nam Dong) in Thua Thien Hue. Interviews were also conducted with 33 households in Thuong Lo and Huong Loc commune, Nam Dong district. The results show the NP experiences a high pressure of deforestation and degradation, as well as biodiversity loss because local livelihoods are highly dependent on forests for food needs, local economic development (handicraft companies demand for rattan) and trading in wildlife meat while local authorities need infrastructure development. Weak law enforcement has not been effectively addressed by the local authorities. Since 1991, multiple financial incentive mechanisms (FIMs) aiming to motivate people to better protect and develop forests have been implemented in the area. However, this has led to difficulties in measuring the impact of individual FIMs and incorporating lessons learnt into others. The absence of a clear monitoring and evaluation framework creates weak law enforcement and weak compliance of local people with these programs. Moreover, most BSMs were developed without proper consultations with local people leading to conflicts among different stakeholder groups. As a result, the current BSMs have not effectively addressed the drivers of deforestation and degradation. Our study calls for a better understanding of local requirements and equity in benefit sharing to be incorporated into policy design. Better law enforcement, a clear monitoring and evaluation framework, as well as an improved participatory decision-making process, are also required to enhance conservation outcomes, local livelihoods and local commitment in forest protection and development.