US-Led Regional Banks and the Limits to Diffusing Environmental Policies

• In Event: The International Diffusion of Law and Policy

Abstract

Since its foundation, the European Bank for Reconstruction and Development (EBRD) has a commitment with sustainable development along with democratization and the promotion of free markets. This contrasts with other American-led regional development banks (RDBs) that, having been created during the Cold War for the provision of development finance by Western powers, only years after the beginning of their operations made the environment a focal point of their operations. Those banks are the Inter-American Development Bank (IADB), created in 1959, the Asian Development Bank (ASDB), functioning since 1964, and the African Development Bank (AFDB), which since 1983 counts with US membership. What accounts for such a difference? More importantly, do those different emphases on environment have distinct impacts upon the environmental policy of the banks’ borrower states? In this paper, we argue that, in opposition to their older siblings who belong to the US-led RDB family, the EBRD decreases greenhouse emissions thanks to its commitment with democratic governance and, hence, the environmental concerns that affects the citizens of the banks' member-states. We, however, do not verify the same effect for the other three RDBs. Instead, even after 1990—with the end of the Cold War and expansion of environmental concerns amid the blooming of liberal principles at the multilateral level—, borrowing members of the AFDB, the ASDB, and the IADB increased their CO2 emissions within a five-year interval after each of the years of the period 1971-2007. The period the sample covers overlaps with the development of worldwide awareness about climate change, starting with the 1972 United Nations Conference on the Human Environment in Stockholm. We reach the conclusions through linear, fixed-effects panel data regressions triangulated with RDB documents on democratic governance, environment, and sustainable development. The findings strongly suggest that Western-sponsored regional organizations focused on the Global South like the AFDB, the ASDB, and the IADB have limits in spreading-out liberal values and norms, possibly seems as a tool of the privileged from the Global North who wants to impose their will and interests over poor constituencies in the developing world.

Authors

• Anastassia V. Obydenkova, IBEI - Institut Barcelona D'Estudis Internacionals

• Vinicius G. Rodrigues Vieira, University of São Paulo