The development of institution is built from the determination of rules of organization thatincludes the rights and obligations of each member, the redistribution of land, assurancemanagement rights, conflict resolution and optimization of the village's role in the development of community forestry. First, the pattern of institutional development is built ina participatory manner to produce a pattern of collaborative forest management in order toachieve social welfare and sustainable forest management. Second, patterns of local institutional development success is largely determined by three factors, namely physical condition and characteristics of local natural resources, political economy factors at the international, national and local factors and local political and social dynamics. These three factors are interrelated to one another and may change from time to time and in certain contexts.

Keywords: Institution development, Social dynamics and Community forestry