The prospects of receiving funding for REDD+ have set many developing countries on a pathway of policy reforms to integrate REDD+ in national legislation. Progress has been slow partly due to the lengthy international negotiations on REDD+ but also because the policy reforms have not been backed by sufficient commitment to make REDD+ implementation feasible. To contribute to a better understanding of why policy and institutional reforms have not been successful in taking REDD+ implementation further, we analyse the institutional landscape of the forestry and environmental sectors in Laos as a case in point. We interviewed stakeholders from national to village levels and found that REDD+ has been effectively on hold in Laos. This is because of recent institutional transformations, rapid staff turnover and limited implementation capacity of government agencies at the national and sub‐national levels all of which have led to a heavy reliance on international support and external consultants. The result is that Laos may not be ready to benefit from the international agreement on REDD+. The situation in Laos provides a compelling example of how difficult REDD+ implementation has proven to be in countries where institution building is still in process.