Mangrove forests provide a range of ecological and socio-economic benefits in coastal zones throughout the world's tropical regions. Yet the conversion of mangrove forest, due in particular to aquaculture development, is occurring at a dramatic rate. Drawing on insights and concepts offered by political ecology and complex systems, processes of mangrove forest conversion and aquaculture development in the coastal zone of Banawa District, Central Sulawesi, are analyzed. This is accomplished by exploring: (1) the comparative benefits of aquaculture developments and intact mangrove forest ecosystems; (2) a policy narrative supportive of intensified aquaculture development at the expense of common property resource systems in the region; and (3) the manner in which this narrative interacts with cross-scale administrative, institutional, economic, socio-cultural and property rights dynamics. The analysis suggests that policy and management issues aimed at conserving mangrove forests and alleviating the ecological and socioeconomic impacts of aquaculture development in the region are not simply a matter of government formulating, enforcing and monitoring regulations that guard against mangrove forest conversion. Rather, there is a need to formulate, propose, implement and monitor strategies that contest existing policy narratives and challenge entrenched economic interests and power relationships. (C) 2002 Elsevier Science Ltd. All rights reserved.