We investigated performance of a committee-led community natural resources management (CNRM) model in managing common-pool eucalyptus and miombo forest resources in southern Malawi. We argue that CNRM policies that ignore internal power relations attract unintended consequences that undermine achievement of conservation and social goals. Both CNRM concept and implementation created new elites (forest committees) who largely operated as corrupt, unaccountable “village bureaucracies,” alienating communities from CNRM. Widespread forest degradation and institutional breakdown ensued. Community management became committee management, and part of the problem. Rare “success” was associated with idiosyncratic leadership qualities of village heads, suggesting need for enhancing roles and leadership skills of traditional leaders in balancing the exercise of power among CNRM stakeholders, and for broad-based community empowerment so that members can demand accountability from local leaders. Eucalyptus was perceived to have higher exchange value and to be managed better than miombo, suggesting the need for separate incentives structures and institutional arrangements.