Common property resource management regimes have in recent times been regarded as being counter to environmental resource protection. It has been supposed that common property equates to open access, but this fails to recognize indigenous, often ancient, land management practices based on the 'community'. This paper analyses recent institutional changes that have taken place in the hills of Nepal, with particular regard to the management of forest resources and property rights. It examines the impacts of changing government policy, and changing rights of ownership, on forest resources, and will show that the changes over time in institutional arrangement (structure of entitlements) brought about by the government has been the root cause of deforestation in Nepal.