Caught in the Middle: Multilateral Development Bank Responses to Environmental Performance
Since their creation, the multilateral development banks have accumulated performance records that include both substantial successes and stunning failures. Nowhere have their performance records been more mixed and controversial than with respect to environmental management issues. The multilateral development banks have financed projects that are widely considered to be environmental disasters, but have also financed projects that successfully included best practice environmental mitigation measures. They have wasted hundreds of millions of dollars financing unsuccessful environmental protection programs, while at the same time they have supported programs that contributed to the rapid development of environmental management capacity in less-developed countries. The purpose of this dissertation is to explore when and why monitoring and evaluation can prompt the multilateral development banks to move away from poor performing projects and towards high performing projects.
This type of performance-based allocation has been repeatedly highlighted as a key element in the successful delivery of development assistance. To test when the multilateral development banks practice performance-based allocation, I assembled a team that coded environmental performance information from 960 project evaluations, 174 program evaluations, and 74 civil society complaints. I use the resulting data to model when four multilateral development banks - the World Bank, Asian Development Bank, Inter-American Development Bank, and African Development Bank - make performance-based allocation decisions about environmentally-risky and environment-improving operations. In addition, I visited the headquarters of each of these organizations and conducted interviews with 54 staff members about the processes that are in place to use monitoring and evaluation information as part of decision-making.
I find that the establishment of monitoring and evaluation systems at the MDBs has not created incentives for staff to practice performance-based allocation. Instead, performance information influences allocation decisions when it helps MDB staff approve future projects more quickly. It does so by helping staff identify development projects that are likely to face significant delays due to the inability of the borrowing country to manage negative environmental impacts and to identify the borrowing countries that are likely to successfully implement environment-improving operations.
Multilateral development banks
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