Since 1998, the western Amazonian state of Acre has been the site of ambitious policies to support sustainable forest-based development initiatives. The result is a long-term successful experiment in transformation of the state from an outsider-driven development based on conversion of forest to pasture and agriculture to an endogenous, participatory process of development focused on sustainable use and valorisation of environmental, economic, social, and cultural assets of the local populations. Both successes and challenges of this unique experience provide valuable lessons in the search for forest-based development approaches. The sections in this chapter trace the innovations in laws, institutions, public administration, and policy to promote forest-based development, alongside the opening of policy-making to citizen input. Data presented from government reports outlining policies, supplemented by available empirical research, show impressive gains in stabilising deforestation, expanding forest production, and favourable but uneven socio-economic impacts of the states forest development programs. The chapter documents the successes in transformative institutional and policy development at the state level, remaining challenges, and lessons learned in Acre for potential application of sustainable development policies over the long term.
