Negotiated agreements between local communities and state agencies concerning the management of natural resources have gained increasing importance in recent years. Taking the case of community agreements on conservation in the area of the Lore Lindu National Park, Indonesia, as an example, the paper analyzes such agreements from two perspectives. (1) From the perspective of environmental economics, negotiated agreements are considered as a policy instrument that represents the bargaining solution proposed by Coase to solve externality problems. (2) From the perspective of policy analysis, the paper analyzes to which extent the agreements can be considered as an example of empowered deliberative democracy, a model suggested by Fung and Wright. The empirical analysis showed that the agreements differed considerably, depending on the value orientation and objectives of the NGOs promoting the agreements. Three NGOs were taken into consideration: an international NGO focussing on rural development, an international NGO specialized in nature conservation with a local sister organization focussing on community development, and a local NGO with a strong emphasis on advocacy for indigenous rights. The paper shows that both the Coase model and the deliberative democracy model are useful to better understand the logic behind the different agreements promoted by these organizations. The paper concludes that the community agreements on conservation represent a promising approach to improve the management of protected areas, even though the internal differentiation within the communities represents a challenge for this approach.