Deforestation is a matter of pressing global concern, contributing to declining ecosystem services, biodiversity loss, and ultimately climate change through growing emissions. We evaluate the effect of assigning property rights to indigenous peoples and local communities (IPLCs) in coastal Ecuador on deforestation and the role polycentric institutions play in policy effectiveness. Informed by a theoretical model, we employ causal methods to 1) evaluate changes in forest coverage for the first 12 years of policy adoption, and 2) evaluate the effect of the presence of non-governmental organizations (NGOs) on policy permanence. We find that assigning property rights to IPLCs significantly decreases mangrove deforestation and that the presence of NGOs funded by foreign aid significantly increases the probability of policy adoption and permanence. We assess the positive development implications of the policy concerning local fisheries provisioning and the role of international aid in achieving environmental outcomes. Our work highlights the importance of IPLCs and civil society as actors for sustainable land stewardship in future climate policy.