Multilateral development banks and environmental management
| Author | David Turnham |
| DOI | http://doi.org/10.1002/pad.4230110406 |
| Published date | 01 July 1991 |
| Date | 01 July 1991 |
PUBLIC ADMINISTRATION AND DEVELOPMENT,
VOI.
11,363-379
(1991)
Multilateral development banks and environmental
management
DAVID TURNHAM
OECD
SUMMARY
This article aims to review the increased attention and initiative which the multilateral develop-
ment banks (MDBsbmore specifically the World Bank and Asian Development Bank (ADB)
-have taken in recent years with respect to environmental concerns. Although the MDBs
made some responses to environmental concern during the
1970s
and
'~OS,
until the late
1980s
the resources devoted to this area were rather limited, and the banks came under increas-
ing criticism for their lack of more substantial commitment. Since
1988
fundamental staffing
and structural changes have brought environmental considerations, both into the evaluation
of all project proposals and also as an approach to planning in its own right.
There is still much uncertainty regarding the appropriateness
of
various techniques available
to improve environmental management in developing countries. The article reviews the poten-
tial use of economic instruments, 'command and control' regulatory approaches, and the
importance of macroeconomic policy as determinant
of
the success of environmental pro-
grammes. Developing country governments are increasingly prioritizing the environment, and
bank efforts are currently focusing heavily on programmes that address poverty and the
environment simultaneously. But it will be necessary to carry
out
adequate research, monitoring
and evaluation of current programmes if these are to progress satisfactorily.
INTRODUCTION
There
are the beginnings of significant new efforts to strengthen environmental man-
agement in the developing countries, with international agencies such as the United
Nations Environment Programme (UNEP) and the multilateral development banks
(MDBs) in the vanguard. As is documented in this article, and especially in the
reference materials on which the article is based, a rather remarkable change of
pace on environmental management in the work of the MDBs has already taken
place. This change of pace is driven by an emerging consensus about the gravity
of
the environmental threats to sustainable development, both for the world as a
whole and for many individual countries. Evidently, the extent and gravity of the
existing threats points to large weaknesses in past and current management.
Among the MDBs, the World Bank
and
the Asian Development Bank (ADB)
have been prominent and we concentrate mainly on these two organizations in this
David Turnham is a senior researcher at the OECD Development Centre in Paris where he
is
responsible
for
the Environment part
of
the programme.
The views expressed in this paper are those
of
the author writing in his personal capacity and not necessarily
those
of
the
OECD.
Similarly, the author alone is responsible
for
any factual errors.
027
1-2705/91/040363-17$08.50
0
199
1
by John Wiley
&
Sons, Ltd.
364
D.
Turnham
paper.2 The discussion is in three parts. The first part examines the beginnings
of environmental work and contributions to the upgrading of national environmental
management before the late
1980s.
A second section examines current activities and
directions, in what is
a
greatly expanded new phase. The third and final part describes
some of the possible problems, unresolved issues, and the role of research.
EARLY APPROACHES TO ENVIRONMENTAL ISSUES
The
World
Bank
The World Bank has usually been the leader in policy and programme innovation
among the MDBs, and the environment is no exception. Under President McNamara,
the Bank was first in setting up its own institutional capacity when the post of
Environmental Adviser was created as long ago as
1970.
At the
1972
Stockholm
Conference (World Bank,
1972),
McNamara emphasized the commitment to environ-
ment in the following way:
‘The question is not whether there should be continued economic growth.
There must be. Nor is the question whether the impact on the environment
must be respected. It has to be. Nor, least of all,
is
it a question of whether
these two questions are interlocked. They are. The solution of the dilemma
revolves clearly not about whether, but about how.’
A
first review (World Bank,
1975)
of the activities of what had become the Office
of Environmental Affairs reported considerable progress, with projects being screened
for environmental impact, and environmental issues being dealt with at modest cost
with
only minor adjustments in design. With sewerage and water purification projects
counted as environment projects, ‘the additional costs attributable to environmental
and health safeguards in non-environmental projects has ranged from zero to
3
percent of total project costs’ (World Bank,
1975,
p.
11).
What seemed satisfactory-if essentially defensive-progress on the project front
was, however, accompanied by a less than forthcoming vision of the Bank’s role
in environmental management and reform more generally. In conducting a dialogue
with member countries on environmental policies, ‘the most effective vehicle’ was
project appraisal, but ‘where there are no adequate laws, rules or regulations govern-
ing environmental matters, the Bank Group
may
(emphasis added) advise on promul-
gation and implementation of appropriate legislation’ (World Bank,
1975,
p.
32).
This circumspect approach to the broader issues is in some contrast to a generally
much more aggressive posture towards policy reform and institutional strengthening
characteristic
of
the World Bank at that time.
In a later review, while recognizing that ‘a relatively small investment in prevention
at an early stage is generally far less expensive, as well as more effective, than subse-
quent remedial actions’, the project emphasis in the Bank’s own activities was con-
’
Among the other MDBs, the African Development Bank recently created a new division for the environ-
ment and the Inter-American Development Bank (IADB) now has-along with new procedures-a twenty-
person Environment Protection Division. The IADB have also just published (together with the United
Nations Development Programme (UNDP)), a major report on the environmental problems
of
Latin
America (see Inter-American Development Bank,
1990).
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