Sustainable Development Aid: Improving Environmental Practices At The World Bank – The Organization for World Peace

Out of all the issues affecting the global political economy, global environmental change as a result of environmental degradation is arguably the most urgent. Environmental degradation refers to when humans (ab)use nature in ways that both threaten the sustainability of the natural resource base and lead to certain issues such as pollution. In 1972, lobbying by Scandinavian countries concerned by pollution led to the United Nations Conference in the Human Environment (UNCHE). This conference recognized the environmental consequences of modern economic growth setting the stage for the process culminated in the United Nations Conference on Environment and Development (UNCED) 20 years later. In 1992, the Earth Summit had two significant outcomes: the legitimization of the environment as a concern for international economic diplomacy and the concept of sustainable development. The term sustainable development to describe the relationship between development and the environment is defined by the Brundtland Commission as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Since the UNCED took place in 1992, concerns with global environmental change moved from the margins to a more central position with sustainable development being at the centre of domestic and international politics, as O’Brien and Williams in Global Political Economy: Evolution and Dynamics put it “[i]t is unlikely that any sane person or organization would willingly endorse unsustainable development or sustainable impoverishment, if that is not an oxymoron.”

Differing views on how to promote development have given rise to debates on how economic growth can be reconciled with environmental sustainability and on alternatives to growth. On the one hand, radical perspectives argue that current economic degradation is a direct result of the historical process of capital accumulation and the promotion of economic growth. According to radical approaches to sustainability, a commitment to preserving environmental quality and combating environmental degradation means a rejection of the global capitalist system and continued economic growth, as Naomi Klein claims in This Changes Everything, “There is still time to avoid catastrophic warming, but not within the rules of capitalism as they are currently constructed.” Therefore, a new way of organizing intellectual, economic, political and social life will be needed or the consequences will be catastrophic for the world’s human population since capitalism and environmentalism are viewed as antithetical. From this perspective, stimulating economic growth can be counterproductive since such growth frequently promotes policies that lead to resource depletion and environmental degradation.

On the other hand, the dominant approach, followed by the World Bank and other international organizations, accept the intellectual, economic, political and social organization of world’s human population and seek to promote sustainable development within the current global capitalist system. In sharp contrast to radical approaches, the World Bank supports a liberal economic vision, therefore, prescribes policy that supports the maintenance of liberal market principles and economic growth. With its overarching goal of a “world free of poverty,” the World Bank promotes economic growth and views it as the instrument through which societies can address resource depletion and concerns of unequal socioeconomic eco-justice.

The World Bank’s practices, based on conventional economics, are highly flawed because of the focus on the marginal rather than on the long-term outcomes, as well as, the construction of theorems based on questionable assumptions about human nature instead of integrating observed human or organizational behaviour into its analyses. Therefore, World Bank practices may adversely impact the environment due to these assumptions and theorems leading to incorrectly “pricing” environmental degradation and resource depletion, and in turn, causing the overproduction of negative externalities causing the adverse environmental impact.

Since the 1980s, the World Bank has been a controversial institution largely due to the negative impact of its structural adjustment programmes in developing countries and its policies on the environment. In response to the criticism, the World Bank has significantly changed its approach to the environment consciously attempting to develop a green portfolio. That portfolio includes three different strategies to achieve its goal of ending poverty through sustainable development, namely, mandatory environmental assessments, systematic and routine environmental monitoring, and the distribution of environmental loans (aimed at urban renewal, pollution control, promotion of biodiversity and reforestation).

Although radical perspectives on sustainability correctly emphasis the link between modern economic growth and environmental degradation, restricting or imposing limits on growth is not a policy option developing countries would consider. The reason for this claim is because developed countries used unsustainable, unrestricted methods to growth and prosperity during their developing stages, and developing countries claim the same right to develop. This North-South divide means that global environmental change can only be managed through effective global agreement or cooperation, as Hurrell and Kingsbury point out: “international cooperation is required both to manage global environmental problems and to deal with domestic environmental problems in ways that do not place individual states at a political or competitive disadvantage.” Developing countries have highlighted the fact that their growth should not be limited when currently developed states were able to advance their economies without any restrictions.  For this reason, following the radical perspectives’ solution to the issue of global environmental change is unlikely to be implemented given the North-South divide even though it may be the best option available to them given the disproportionate negative impacts of environmental degradation in developing countries.

The rules and design of the World bank can be reformed by including the active research and participation of other key intellectual viewpoints such as ethnographers (to elicit a local viewpoint), political scientists, ecologists, and local community partnerships. By relying too heavily on the knowledge of economists, the lived realities and impacts of the actions of the World Bank can be lacking. This would change the lending practices by allowing for a more holistic approach to sustainable development going beyond economic growth and the assumptions and theorems of conventional economics.

By incorporating other intellectual perspectives, the World Bank’s conception of economic development as economic growth may expand. As Seers argues in his The Meaning of Development article defining development as economic growth is too restrictive and fails to capture the multifaceted nature of development. The World Bank’s lending practices may greatly improve by expanding its definition of development as economic growth to also include human development. According to Amartya Sen in Development as Freedoms, human development includes the expansion of freedoms, namely, political freedoms, social opportunities (educational and health facilities, etc.) and economic facilities. In addition to expanding the definition of development, other intellectual perspectives may change the current understanding of economic growth to “greener” forms of growth. The changes that occur from incorporating more intellectual viewpoints should be incorporated into the World Bank Charter, as recommended by Rich in Foreclosing the Future: The World Bank and the Politics of Environmental Destruction. Although codifying key commitments such as the promotion of economic welfare, socioeconomic eco-justice and sustainable development would be a largely symbolic act, it would confirm the World Bank’s commitment to green poverty alleviating practices and could be viewed as the World Bank starting a new chapter with civil society actors and values at the core of its practice leaving behind its highly controversial past.

Non-Governmental Organizations (NGOs) have a flexibility not always available to governments on to other regulatory bodies and are crucial to assisting the World Bank to better in incorporating environmental concerns, as well as, concerns of those affected by its lending. One strategy NGOs can implement to support the World Bank in improving its lending practices is community-based research and assessment of needs. The problem with international organizations, according to Buntaine in Giving Aid Effectively: The Politics of Environmental Performance and Selectivity at Multilateral Development Banks, is the fact that performance of international organizations can fall short of expectations, with a particular emphasis on the environmental performance of the multilateral development banks. He attributes the gap between mandate and results in the uncertainty of the World Bank and other international organizations about how to achieve the intended outcomes.

The gap between mandate and results highlighted by Buntaine could be directly addressed by community-based research and assessment of needs by NGOs allowing for much more localized responses, for the autonomy of the individual, for more climate-sensitive related needs to be assessed. For example, commenting about the Sardar Sarovar project, former US Chairman of the House Subcommittee on Agriculture Research, Environment and Natural Resources, James Scheuer, said: “The American taxpayer and the American Government and certainly the American Congress does not want to pour money down the drain into capital-intensive, labour-saving projects that are misguided and—and badly designed to meet the needs of those [Indian] people.” This statement stresses the fact that the policies of the World Bank failed to meet the needs of the same people it is designed to help. For this reason, to understand better the needs of the people of a particular country, NGOs through community partnerships would be able to recommend policies designed specifically for the people of a particular state.

The argument in support of community-based research follows from Easterly’s emphasis in The White Man’s Burden the benefits of the “Searcher” approach going into the research without “the answers in advance; he believes that poverty is a complicated tangle of political, social, historical, institutional and technological factors,” and recommending “homegrown” solutions, as opposed to, following the traditional “Planner” approach relying on expert knowledge. To demonstrate the superiority of the “Searcher” approach in comparison to the planner approach, we could examine the example of the failed project to teach farmers in Lesotho agricultural techniques sponsored by the Canadian International Development Agency and the World Bank. This project failed primarily due to lack of local details with range-management techniques conflicting with local law guaranteeing open grazing, and the irregularities of the weather in the region not allowing for the farming plans to go as planned. Throughout this project, Easterly claims that “[t]he project managers complained that the local people were ‘defeatist’ and didn’t ‘think of themselves as farmers,” when in reality local people knew the area was no good for farming and did not engage with the project for that reason. Thus, community-based research and assessment of needs by NGOs, combined with the participation of a wider array of intellectual voices in the World Bank, may lead to the Bank’s lending practices to more effectively tackle the issues at hand in a sustainable manner.