Extractive reserves have been touted as a novel approach to assigning property rights such that biodiversity conservation and economic development objectives can be reconciled. It is based on the idea that the combination of public property with collective use in particular forest areas can generate competitive and, at the same time, sustainable exploitation of its natural resources. This paper analyses whether the extractive reserves is an appropriate instrument for achieving the joint objective of conservation and development by further understanding its limits and possibilities as property right regime. It argues that an extractive reserve is economically viable as a competitor in markets for existing extractive products only under restrictive assumptions.