A very important application of principles of economics has been in the field of environment due to increasing need for environment protection. The branch of economics that links itself to regulated use of natural resources is institutional economics. Institutions enter the economic system as they help regulate human behaviour through rules and norms that help distribute costs and benefits of a transaction. Thus, values and institutions enter the economic system as another form of capital called social capital. Social capital once existed in abundance in the forest dependent communities in India when patches of forests were managed by these communities with the help of sustainable practices, collective effort and local level institutions forming rules of use and protection. With colonization, the law of the land changed the ownership and access rights of the communities, thus making them intruders in the forests that they once owned and protected. Colonial access rights were carry-forwarded in Independent India. Over the years, repercussion of exclusion of local communities was felt in the declining forest cover as well as the degenerated local level social capital. However, sporadic cases of community protection were being reported from India which showed signs of existence of social capital. This also prompted a change in the forest policy in 1988 with Joint Forest Management. Many studies have been carried out on role of social capital in natural resource management but limited studies have been carried out on the changes in social capital in forest dependent communities over a period of time and its effect on community forest management and forest condition. This book answers these questions by presenting the change in social capital seen in five communities of Vidarbha region. These communities were researched twice within a span of five years to see the change in community level forest institutions, collective effort and forest condition.