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What makes some groups of common-pool resources users better able to engage in collective action than others? Although scholars have analyzed the role of land tenure forms on land use, we know relatively less about why communal ownership of natural resources (such as forests) works and under what political conditions. In this paper, I study the role of institutions of traditional governance on the management of forests in Mexico, a country where more than 32,000 rural villages (known as "ejidos" and "comunidades agrarias") own the majority of the land. First, I explore the relationship between the status as an indigenous township at the end of the colonial era and current land use change, which I measure with high-resolution satellite imagery. Second, I leverage a geographic discontinuity in the assignment of traditional governance in Oaxaca state, where a constitutional reform in 1995 granted political autonomy to a subset of indigenous municipalities. My findings suggest that the presence of institutions of traditional governance and their official recognition by state authorities are associated with more sustainable land use. This paper contributes to understand what makes communal tenure of natural resources effective; it also expands the quantitative research on legal pluralism and indigenous politics in Latin America.