Integrating environmental concerns into economy-wide policies in developing countries: the role of multilateral development banks

Abstract

This study addresses the role of multilateral development banks and their effectiveness in bringing environmental considerations, issues and consequences into structural and sectoral adjustment programmes in developing countries. It addresses a series of complex generic issues showing that such programmes cannot be meaningfully studied in isolation from other aid cooperation and government development programmes. The study proposes and discusses alternative explanations on how the multilateral development banks may have influenced thinking in borrowing countries. By looking more closely at the Philippines the study provides an insight into the dynamics and diversity of such programme lending and how its design can affect resource management and the environment in benign or adverse ways. It shows what complementary remedial action can be taken when institutional barriers, policy failures and market failures threaten the environment. It provides an analysis of how awareness of such interlinkages has emerged since 1980 and manifested itself in aid cooperation in general and in economy-wide adjustment lending in particular since 1987, while gradually being absorbed in governmental development plans and programmes with varying degrees of domestic ownership. In particular, we find that there seems to have been shifts in the World Bank and the Asian Development Bank's environmental policies after the publication of the Brundtland Commission Report in 1987.