Institutions and organizations are regarded as being important in determining the efficiency of economic agents and public units. This study first reviews the economic reforms in silvicultural activities in China's state-owned forestry bureaux, then empirically examines the impact of economic reforms. Panel data from 40 forestry bureaux in Heilongjiang Province, and two different economic regimes: from the pre-reform and economic transition periods, are analyzed by Data Envelopment Analysis (DEA). The technical efficiency has been decomposed into pure technical efficiency and scale efficiency and then examined. Our results show that the economic reforms have increased efficiency on average by about 25 per cent. Moreover, the study qualitatively analyses the sources of improvement and argues that the efficiency gain is a result of reductions in labour shirking and administration costs.