Protected areas (PAs) remain the dominant policy to protect biodiversity and ecosystem services but have been shown to have limited impact when development interests force them to locations with lower deforestation pressure. Far less known is that such interests also cause widespread tempering, reduction, or removal of protection [i.e., PA downgrading, downsizing, and degazettement (PADDD)]. We inform responses to PADDD by proposing and testing a bargaining explanation for PADDD risks and deforestation impacts. We examine recent degazettements for hydropower development and rural settlements in the state of Rondônia in the Brazilian Amazon. Results support two hypotheses: (i) ineffective PAs (i.e., those where internal deforestation was similar to nearby rates) were more likely to be degazetted and (ii) degazettement of ineffective PAs caused limited, if any, additional deforestation. We also report on cases in which ineffective portions were upgraded. Overall our results suggest that enhancing PAs’ ecological impacts enhances their legal durability.