SUMMARY
A very important aspect of natural resources management is determining optimal budget allocation to satisfy the needs and aspirations of multiple stakeholders. This is especially the case in developing countries like Mexico where budgetary funds are in short supply. There has been an increasing debate in Durango, Mexico, for example, about determining the most efficient way of allocating a budget for multi-purpose forest management. The debate has been triggered by a growing number of interests and stakeholders, which in addition to optimal timber production, have the desire to improve environmental conditions, water resource development, range and other non-timber resources production, and to provide better amenity values and expanded recreational opportunities. CONAFOR (COmisión NAcionale FORestal), the Mexican agency in charge of allocating funds to promote sustainable forest resources development, has been implementing four national programs: developments of forest resources, tree plantations, non-timber products, and water resources. In addition to these programs, the forest resources management decision-making process involves four interest groups and six management objectives independently connected in a hierarchical framework. Accordingly, the most suitable multi-objective/multi-criterion decision-making (MODM/MCDM) technique for optimal allocation of scarce budgetary funds among the four natural resources development programs is the Analytic Hierarchy Process (AHP). The two programs that receive the most funds are forest resources development and water resources/ environmental services development. In this way, the AHP can be used to optimally distribute scarce financial resources among competing programs to improve regional economic development and better satisfy the needs of various interest groups.