Land and natural resources (primarily forests and water) play critical roles in economic and rural transformation. As populations and economies grow, the first natural response is to expand cultivation into former forests and rangelands and use the most readily available water sources in agriculture and the urban sectors. At that stage of development, customary and local institutions are usually adequate to allocate resources and manage conflicts between uses and users.  Over time, areas with the densest populations and best access to expanding urban markets are the first to encounter constraints on available land and experience declining yields, degrading water and forests, and rising resource conflicts among competing uses. Innovative farmers in those settings use new technologies and external inputs to intensify production and reverse degradation, if they have secure rights to their land. Markets for land rental or sale and new institutions for water, rangeland and forest management may develop spontaneously or through explicit government action. These processes have the potential to lead to sustainable, resilient and inclusive transformation – or to continued degradation, growing inequality of distribution and procedure, dispossession of the poor and vulnerable, and armed conflict