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Title
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Eng
Environmental Impacts of Development Practices of the World Bank
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Date
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2007
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Creator
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Eng
Schweizer, Vanessa Jine
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Subject
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Environmental Studies
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extracted text
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ENVIRONMENTAL IMPACTS OF DEVELOPMENT PRACTICES
OFTHEWORLDBANK
by
Vanessa line Schweizer
A Thesis: Essay of Distinction
Submitted in partial fulfillment
of the requi rements forthe degree
Master of Environmental Study
The Evergreen State College
August 2007
This Thesis for the Master of Environmental Study Degree
by
Vanessa line Schweizer
has been approved for
The Evergreen State College
by
ABSTRACT
Environmental Impacts of Development Practices ofthe World Bank
Vanessa line Schweizer
Some of the most ecologically diverse and threatened areas of the world are within
developing nations. This thesis will provide an historical and economic context for
environmental problems that currently characterize the developing world. There
is an intimate connection between world trade and economic development across
nations. Habitat destruction in biodiversity hotspots, as well as world population
growth, hinges on the problems of underdevelopment and globalization. Citizens
of the First World often lament decisions made by the Third World without a
proper understanding of how rich nations are complicit by virtue of their terms of
trade and conditionality requirements through Bretton Woods institutions such
as the World Bank and International Monetary Fund. Since the late 1980s, the
World Bank has attempted to be more environmentally savvy; however, there is
little research assessing the Bank's ability to change. The World Bank has
attempted to rectify this legacy with new money-lending practices such as the
Global Environment Facility. The likelihood for the success of these changes will
be assessed. Major sources of data include the Conservation International web
portal for hotspots, Biodiversity Hotspots; publications, internal papers, and
websites of the World Bank; The 'World Bank:Its First HalfCentury by Kapur
et al., and A New Green Order? by Young. Major findings include a statistically
significant relationship between economic status and the presence of biodiversity
hotspots, as well as selective targeting ofthe stages of economic development
outlined in W .W. Rostows The .'-,'rages ofEconomic Developmentby Bretton
Woods institutions.
All rights reserved. All material in this document is, unless otherwise stated, the
property ofVanessa line Schweizer. Copyright and other intellectual property
laws protect this material. Unauthorized reproduction or retransmission of the
materials, in whole or in part, in any manner, without the prior written consent of
the copyright holder, is a violation of copyright law.
August 2007
Copyright © Vanessa line Schweizer
List of Figures
vii
List of Tables
viii
List of Abbreviations and Acronyms
ix
Acknowledgments
x
I
CHAPTER I: INTRODUCTION
1.1 Overview
1.2
Methodology
1.3 Origins of The World Bank
1
1
3
6
CHAPTER 2: A BRIEF HISTORY OF THE WORLD BANK
AND INTERNATIONAL DEVELOPMENT
9
2
2.1 Current Structure of The World Bank
10
2.2 Early History, 1945 - 1950s: Reconstruction and the Beginning of the
Cold War
15
2.3 Middle History, 1960s - 1980s: The Rise and Fall of the Developing
World
17
2.4 Late History, 1980s - Present: The World Bank Attempts to
Reinvent Itself
27
2.5 Conclusion
32
3 CHAPTER 3: ROSTOVIAN DEVELOPMENT THEORY 37
3.1 Stage
I:
The Traditional Society
39
3.2 Stage 2: The Preconditions for Take-Off
39
3.3 Stage 3: The Take-Off
41
3.4
46
Stage 4: The Drive to Maturity
3.5 Stage 5: The Age of High Mass-Consumption
49
iv
4 CHAPTER 4: IMPACTS AND MECHANISMS OF
ACCELERATED BIODIVERSITY LOSS
4.1 The Scale of the Problem of Biodiversity Loss
4.1.1 The Benefits at Stake
4.1.1.1 Benefit I: Ecological Services
4.1.1.2 Benefit 2: Medicine and Other Health-Related Benefits
4.I.I.3 Benefit j: Food
4.I.I.4 Benefit 4: Cultural Value
4.2 N eo-Malthusian and N eo-Marxian Views on the Mechanisms of
Environmental Destruction
4.2.1 Malthusian and Neo-Malthusian Views
4.2.2 Marxian and Neo-Marxian Views
4.2.3 Neo-Malthusian and Neo-Marxian Views in Contrast
4.3
Conclusion
54
56
57
58
60
61
62
64
65
67
69
74
5 CHAPTER 5: LINKS BETWEEN BIODIVERSITY HOT
SPOTS AND INTERNATIONAL DEVELOPMENT
76
5.1 Biodiveristy Hot Spots: What and Where Are They?
77
5.2 Distribution of Biodiversity Hotspots by World Bank Income and
Indebtedness Classifications
81
5.2.1 Distribution of Hotspots by Per Capita Annual Income
5.2.2 Distribution of Hotspots by Indebtedness
81
83
5.3 Conclusion
87
6 CHAPTER 6: A CRITICAL LOOK AT ONE OF THE
WORLD BANK'S REINVENTIONS: THE GLOBAL
ENVIRONMENT FACILITY
89
6.1 Difficulties During the Pilot Phase, 1990-1994
93
6.2
96
Difficulties in the Restructured GEF
6.3 Tensions Between the GEF and the Convention on Biological
Diversity.
98
6.4 Tensions Between Thinking Globally and Acting Locally
100
6.5 Conclusion
101
v
References
111
vi
FIGURE I . RELATIONSHIP SCHEMATIC OF MEMBER COUNTRIES
AND THE WORLD BANK GROUP
11
FIGURE 2. VOTING POWER OF THE 184 SHAREHOLDER COUNTRIES
12
IN THE IBRD, 2003
FIGURE 3.VOTING POWER OFTHE 164 SHAREHOLDER COUNTRIES
IN THE IDA, 2003
13
FIGURE 4. MALTHUSJAN AND MARXIAN MODELS FOR SOCIAL AND
ENVIRONMENTAL PROBLEMS
70
79
FIGURE 5. MAP OF BIODIVERSITY HOTSPOTS, 2005
FIGURE 6. GRIDDED MAP OF WORLD POPULATION DENSITY, 2000 80
vii
TABLE I. PRONATALIST AND BIRTH REDUCTION PRESSURES
72
TABLE 2. WORLD BANK INCOME CLASSIFICATIONS FOR WORLD
81
ECONOMIES, APRIL 2005
TABLE 3.WORLD BANK INCOME CLASSIFICATIONS AND HOTSPOTS
83
STATUS
TABLE 4. WORLD BANK INDEBTEDNESS CLASSIFICATIONS FOR DRS
84
ECONOMIES, APRIL 2005
TABLE 5.WORLD BANK INDEBTEDNESS ClASSIFICATIONS FOR
NON- DRS ECONOMIES, APRIL 2005
85
TABLE 6.WORLD BANK INDEBTEDNESS CLASSIFICATIONS AND
HOTSPOT ECONOMIES
86
viii
CBD
COP
DRS
DS
EIA
G-n
GAlT
GDP
GEF
GNI
GNP
HIPC
IBRD
ICSID
IDA
IEPP
IFC
IMF
IPAT
LDCs
MIGA
NAM
NATO
NGO
OPEC
PRINCE
PRSPs
PVDS
QAG
SAP
STAP
UN
UNCBD
UNDP
UNEP
UNFCC
UNICEF
USAID
WEOG
WWF
(United Nations) Convention on Biological Diversity
Conference of Parties
Debtor Reporting System
Debt Service
Environmental Impact Assessment
Group of 77 Countries
General Agreement on Tariffs and Trade
Gross Domestic Product
Global Environment Facility
Gross National Income
Gross National Product
Heavily Indebted Poor Countries
International Bank for Reconstruction and Development
International Center for Settlement oflnvestment Disputes
International Development Association
Independent Evaluation of the Pilot Phase
International Finance Corporation
International Monetary Fund
Imapet (environmental) = Population * Afiluence * Technology
Least Developed Countries
Multilateral Investment Guarantee Agency
Non-Aligned Movement
North Atlantic Treaty Organization
Non-governmental Organization
Organization of the Petroleum Exporting Countries
PRogram for measuring the INcremental Costs for the Environment
Poverty Reduction Strategy Papers
Present Value of Debt Service
Quality Assurance Group
Structural Adjustment Program
Scientific and Technical Advisory Panel
United Nations
United Nations Convention on Biological Diversity
United Nations Development Program
United Nations Environment Program
U nited Nations Framework on Climate Change
United Nations Children's Fund
United States Agency for International Development
Western European and Others Group
World Wildlife Fund
ix
I would like to thank:both The Evergreen State College Foundation and
The Evergreen State College Graduate Program on the Environment (MES) for
their financial support. I would also like to thank Ralph Murphy for sticking with
me on this thesis despite personal loss and long distance. I must also thank John
Perkins for his continual guidance and moral support throughout the
environmental study graduate program.
x
1.1
Overview
Biologist E.O. Wilson notes that there are onlytwo majorcategoriesof
environmental problems:Those that alter the physical environment, makingit
uncongenial to life, and those that causethe irrevocable lossof genetic and
biological diversity. Becausethe latter encompasses losses that cannot be
redeemed, the lossof biodiversity is an environmental crisischaracteristically
differentfrom other typesofenvironmental degradation.I Though both categories
of environmental problemsdemand attention, the second is arguably more urgent
to address as speciesslip away.
Some of the most ecologically diverseand threatened areasof the world
are within developing nations. Citizens of industrialized countriesoften assume
that the environmental destruction occurring in poorer nations is due to a lackof
appreciationor poor education on the part oflocals.Though substandard
housing, schools,and infrastructureare often a reality in the developing world, to
assumethat dilapidated conditionsalonegive riseto environmental degradation
considersonlypart of a much larger and more complex picture. By looking
specifically at the institutionswhich havea hand in development - namely the
World Bank: - and their governingphilosophies relatingto development, trade,
and the roles they should play, this thesis will providean historical and economic
context for environmental problems that currentlycharacterizethe global South.
1
biodiversity loss negatively impacts human societies in significant ways - by
destabilizing ecological services and dwindling medicinal, nutritional, and cultural
resources. This argument is discussed in Chapter 4: Impacts and Mechanisms of
Accelerated Biodiversity Loss. Second, these losses are most pronounced in least
developed economies, so much SO that there is a likelylink between these losses
and the business of how international development has been practiced. This
argument is discussed in Chapter5: Links Between Biodiversity Hot Spots and
International Development, and Chapter 6: A Critical Lookat One ofthe World
Bank's Reinventions: The Global Environment facility. Third, though many
stakeholders believe that international development ought to be conducted in a
different way, leading institutions such as the World Bank face significant
challenges to institute change. These challenges are both philosophical and
institutional as explored in Chapter 3: Rostovian Development Theory, and
Chapter 2: A BriefHistory ofThe World Bankand International Development.
These three arguments could be encompassed in the question, "Can
institutional changes in the World Bank with respect to development practices
slow or eventually stop destruction ofbiodiversity hotspots?" This question is
inspired by two claims advanced by E.O. Wilson in his book, The Diversityof
Life. Writing about possible solutions to the biodiversity crisis, Wilson first states,
Today the poorest countries are rapidly decapitalizing their natural
resources and unintentionally wiping out much of their biodiversity ina
scramble to meet foreign debts and raise the standard ofJiving. By
perceived necessity they follow environmentally destructive policies that
yield the largest short-term profits.'
2
The richest countries set the rules for international trade. They provide
the bulk ofloans and direct aid and control technology transfer to the
poor nations. It is their responsibility to use this power wisely, in a
manner that both strengthens these trading partners and protects the
global environment.'
1.2
Methodology
A number ofsuppositions must be explored to determine if Wilson's
observations are accurate and hence to answer the research hypothesis. First
where is biodiversity most rapidly being decapitalized? Biodiversity hotspots are
selected as a point offocus because they are regions that top the priority list of
conservation efforts. Recognized as having the highest concentrations ofboth
species endemism and habitat destruction, hotspots are naturally a focus for any
discussion regarding loss of biodiversity. Hotspot data was collected from
Conservation International's BiodiversityHotspots website. A catalog of 129
countries and territories housing hotspots was constructed from maps and
geographic descriptions of the 34 hotspots identified by Conservation
International in February of 2005.
Second what is the economic status ofthese countries? This will be
investigated by consulting income and indebtedness classifications for the 129
aforementioned economies, where applicable, retrieved from the World Bank's
Data and Statistics website.
Third, does the income status, debt status, or both of a nation really have a
bearing on habitat destruction? This will be investigated with a Pearson chi
3
the World Bank.
Fourth, are rich countries really in a position to "set the rules" of
international trade such that they protect biodiversity, or are trends in
international trade subject to a more chaotic process determined by history and
the political-economicjockeying of multiple players? This will be investigated
through literature review. Organizations that are considered catalysts for the
development ofthe world economy are the Bretton Woods institutions of the
World Bank and the International Monetary Fund (IMF). Though industrialized
donor economies wield tremendous influence as well, this influence is typically
channeled through one of the aforementioned entities. It is for this reason that the
Bretton Woods institutions take center stage in this thesis. Since the IMF is
considered a lender oflast resort, the World Bank has been much more involved
in development projects of all types. Thus the World Bank is the institution
explored in detail in this study.
Another reason the World Bank is the organization offocus in this study is
that it is has been the poster-ehild for the funding and sanctioning of international
development efforts. The World Bank is also the primary multilateral institution
that classifies world economies with respect to income level and indebtedness.
Through a review of the institutional history ofThe World Bank, and of literature
published by both The World Bank and its critics, this thesis will uncover both
4
its approach to internationaldevelopment.
Though colonialism from a far earliertime undoubtedlyplayed a rolein
influencing trade relationships, development priorities,and biodiversity loss,this
study focuses on the roleof recent development activity. It also narrowsits focus
to that time period afterthe inceptionof the World Bank following World War II.
Additionally this thesis introduces the intimate connectionbetween world trade
and internationaldevelopmentas discussedbyW.W. Rostow in Chapter3:
Rostovian Development Theory. Consequentlyenvironmental problemssuch as
habitat destruction in biodiversity hotspots, as wellas world population growth,
hinge not onlyon the problem of internationaldevelopment, but also on
globalization.'
Citizens of the First World often criticize environmental management
decisionsin the Third World without a proper understandingof the waysin
which rich nations are complicit. Complicityis generated primarily on two fronts:
First, demand for inexpensive goods and services by rich consumersin the First
World encourageenvironmentally destructive practicessuch as mining, clear
cutting, and over-harvesting in the developing world. Second, monetarypolicies,
such as the IMFs structural adjustment programs (SAPs), designed byfinanciers
in the North to maintainthe internationalmonetary system and combat povertyin
the South, havebeen documented as driversofenvironmental degradation.
Sensitive to these findings, the World Bank has attempted to be more
5
such as Poverty Reduction Strategy Papers (PRSPs). PRSPs are penned by
developmentexperts from developingcountries; however, there is little evidence
that shows these types of reinventions to be substantial.
1.3
Origins of The World Bank
The World Bank was conceived in 1944during a conference of world
delegatesin Bretton Woods, New Hampshire near the end of World War II. The
conference's primaryaimwas to assemble internationaleconomicsafeguardsto
prevent another world war.' Prior to World War II, depressed economies
worldwide spurred massive unemploymentand political unrest. Conference
attendees hoped that designing proper internationalsupports could stave off
future global depressions that would again lead to global war. Here the roots of
globalizationwere planted.
Arguablythe "star" proposals Bretton Woods delegates discussed were the
IMF and the General Agreement on Tariffs and Trade (GATT). The chief
architects were Americaneconomist Harry Dexter White and British economist
John Maynard Keynes. The 1MF would oversee a system offixed exchange rates,
promote currencyconvertibility, and serveas a "lenderoflast resort" for countries
with balanceof paymentsproblems - potentially savingthem from depression.
The GAIT set rulesfor global trade that aimed to reduce trade barriers over
time. In order to makegood on the GATT, however, the war-tom economiesof
6
Bank for Reconstruction and Development(lBRD), was born to rebuild
Europe,"
In sum, Bretton Woods was a system of rules,institutions, and procedures
that were instituted to regulatethe world economy. The chieffeatures of the
Bretton Woods system were, first, an obligationfor each country to adopt a
monetarypolicy that maintainedthe exchange rate of its currency within a fixed
valuein terms of gold; and, second, the acceptanceof macroeconomic provisions
by the IMF to gain funds that would bridge anytemporarypaymentsimbalances.
Until the early1970s, the Bretton Woods system was effective in controlling
conflictand in achieving the commongoalsof the leadingstates that had created
it - especially the United States and Europe. In the face of increasing economic
strain during the zo" century, however, the system eventually collapsed in 1971
following the United States' suspensionof convertibility from dollars to gold.
During the 1980s and 1990s, key Bretton Woods institutions - especially
the World Bank and the IMF - came under heavy criticism for the high social and
environmental tollspaid by developing nationsin the nameof their balance-of
payments. Since the 1990s, the World Bank has attempted to rectify its negative
humanitarianand environmental legacy with new money-lending practicessuch as
the Global Environment Facility (G EF), a special program designed to support
projects commensuratewith the goalsof United Nations (UN) conventions on
biodiversity and climatechange.
classifications and hotspot status. This impliesthat changes in development
practices at The World Bank may,in fact, be able to playa great role in slowing,
stopping, or even reversingeconomic trends that haveinfluenced land use
decisions leading to serious habitat destruction and biodiversityloss. At the end of
this thesis, the likelihoodfor the success of these changes will be brieflydiscussed
in the context of the larger global economic framework.
8
Development
To understand why the World Bank:, international development efforts,
and international trade could be assigned some levelof culpability for habitat
destruction, one must understand some history. This chapter is organized into
five sections. The first section, CurrentStructureofThe WorldBank describes
the five institutions of the World Bank Group and introduces the reader to the
World Bank's decision-making structure. The second section, EarlyHistory, 1945
- 1950s: Reconstruction and the Beginningofthe Cold War, explains the role of
the Bank during its first 15 years ofexistence. The third section, Middle History,
1960s - 1980s: The Rise and Fall ofthe DevelopingWorld, details how
industrialized and developing countries viewed international development efforts
before the Energy Crisis and structural adjusnnent programs. The fourth section,
Late History, 1980s - Present: The World BankAtternpts to Reinvent Itself,
recounts how the Bank has tried to be more responsive to social justice and
environmental critics. Concluding thoughts comprise the last section.
It is important to remember that from the outset, the World Bank
functioned as the "development" arm ofa larger, international monetary stabilizing
mechanism - the Bretton Woods system. Such a dual role was bound to create
some tension, as the Bank must champion causes for the neediest segments ofthe
world while it is also designed to serve the wealthiest. 7 Despite the Bank's most
recent transformations to increase its social and environmental accountability, its
9
2.1
Current Structure of The World Banks
The World Bank: is comprised of two institutions: the International Bank
for Reconstructionand Development(IBRD) and the International
Development Association (lDA).9The IBRD lends money to governmentsthat
are consideredcreditworthy. Though low-income countriescan be deemed credit
worthy, the IBRD typically lends to middle-income countries. The IDA works
exclusively with poor countriesgranting them interest-free loans that are referred
to as credits. Unlikethe IBRD, funds for disbursementthrough IDA are
approved every three years by the governments of rich, donor countries," Though
some see this approval process as an accountability mechanism, others see
politicization of international development. This is a valid concern, sinceunlike
other international bodiessuch as the United Nations, where each countryhas an
ambassadorand five permanent Security Council membershaveveto power,
votingpower in the World Bank: is determined bythe percentageof shares each
membercountryholdsin the Bank. In both the IBRD and IDA, the US holds
the largest amount ofshares and thus the US executive director wieldsthe
greatest amount ofvoting power at 16-41%and 13.9%respectively. Japan's
executive director comessecondwith 7.87%and 10.92%. Onlyeight of the member
countrieshave direct representation on the Board of Executive Directors: the US,
Japan, Germany, France, the United Kingdom, China, Saudi Arabia, and Russia.
10
member co unt ries.
The Board of Executive Directors is comprised of 24 executive directors
with the Ba nk president, who has always bee n an American, as chairman."
Exec utive directors make reg ular decisions for the Bank; however, once a year
dur ing the World Bank Group - International Monetary F und Annual Meeting,
all member countries are represented by their own ministerial representatives who
are called Governo rs. The Bank aims to be accountable to its member cou nt ries
thro ugh its Board of Governo rs, as the Board of Exec utive Directors is, in theory,
beholden to the Board of Governors. The Bank hierarchy is shown in Figure 1.
.\ lc mbc r 0
1 1l 1H Ii l' ~
111
ill
Fi gure 1. R elationship
sc he ma tic of member
co u nt ries a nd the W orld
B ank Group. Reproduced
from T he Wo rld Bank. A
Guide to The World Bank. 8.
111
Prc-Idcnr .
111
Executive directors are responsible for policy decisio ns affecting the Bank
Group's operation and the approval of all loans. They norm ally meet twice a week
11
Figure 2 and F igure J As ca n be seen in the graphs, the number of votes eac h
di rector has at his disposal is not equal. Europe (exclud ing t he R ussian
Federati on) and Nort h America togeth er co ntro l over half the votes in both the
IBRD and the IDA
Voting Power of Shareholders in IBRD
• United States
North America
• Germany
• France
• United Kingdom
• Russia
• Europe
. Japan
. China
• Asia , Austra lia, Pacif ic Is lands
South Ame r ica
• Saud i Arabia
• Middle East
• Africa
Figure
2.
Voting p ower o f the 184 sh ar eh old er countri es in th e I BRD,
E ach sliver of the cha rt represents th e voting power of each IB RD executive
directo r. Voring power is colored by region , and shaded slivers represent executive
directo rs th at cast votes for on lyo ne country.
2003.1 3
T houg h it is o nly the IBRD and ID A that technically make up the World
Bank, th ree other organizatio ns, toget her w it h the IB RD and IDA, make up the
W orld Ba nk Group. These other sister organizatio ns arc t he Intcr national
Fin ance Corporatio n (IFC ), the Internat ional Center for Se ttlement of
Age ncy (M IG A).
Voting Power of Shareholders in IDA
• United Sta tes
North America
• Germ any
• France
• United Kin gdom
•
•
.
.
.
Russi a
Euro pe
Japan
China
Asia, Aust ralia, Pacific rsiancs
Sout h Amer ica
• Saudi Arabia
• Middl e East
• Afr ica
Figure 3. Voting power of the 164 shareholder countries in the IDA,
2 0 03 . J-l Countrie s and const ituencies arc listed in the same o rder as Figure 4. E ach sliver
of rhe chart represents the voring power of eac h IDA executive director . Voring power is
colored by region , a nd shade d slivers rep rese nt executive directors rhar cast votes for only
one country. The Ru ssian Federation controls 0.28 % of IDA vot es,
Unlike the World Bank, which must lend
to
governments, the IFC
directly finances businesses and initiatives undertaken by the private secto r in
developing countries. In keeping with Rostovian development theory, w hich will
be discussed in chapter 3, the IFe's particul ar focus
...is to prom ote eco nomic development by encourag ing rhe gro wrh of
private enterprises and effici ent cap ital markers in its member
countries .... I FC also advises govern ments in develop ing cou ntries o n
how to create an e nabling business environment, and ir provides
guidance o n att racting fo reign dire ct investm ent. "
its Secretariat is financ ed th rou gh th e World Bank. It provides intern ational
facilities for con ciliation and arbitration of investment disputes between states and
foreign investo rs. It also co nd ucts research and publishes sc ho larly wo rk o n
arbitration and foreign investment law.
M IGA underwrites overseas investo rs' noncommercial risks suc h as
expropriation , currency incon vertibil ity and tr ansfer restri ctions , wa r and civil
disturbance, o r b reach of co nt ract. M IGA refers to itself as "an um brella of
deterrence" aga inst govern ment actions that cou ld disru pt foreign investm ents.
The World Bank explain s, ~M I GA's capacity to serve as an objective intermedi ary
enha nces investor co nfi de nce that an investment in an cmerg ing eco nomy wiII be
protected against noncommercial risks."? Thou gh Rostow says little about the
importance of po litically insur ing fo reign investme nts in developing eco nomies,
th e assumpt ion at th e World Bank is that uncertainti es about th e stability of
politi cal environments make foreign investors skittish. M IGA attempts to add ress
these uncertainties perceived by foreign investors th rough und erwriting , techni cal
assistance, and legal services.
T ogeth er the aim of the World Ban k Gro up is to provide funds to
governments and private investors for infrast ructural and institution al
development in developing countries, to p rovide suppo rt for foreign di rect
investm ent th at might ot herwise see m too risky to investors, and to reso lve foreign
investment disputes. H ow ever middl e- and high-incom e countries dominate the
14
are not funneling donor money, they are handling the concerns offoreign
investors. Though these artifacts ofthe World Bank Group's structure may have
helped the Bank achieve its goals, over the past 25 years, they have come to be seen
by World Bank critics as liabilities."
2.2
Early History, 1945 - 195os: Reconstruction and the Beginning
of the Cold War
The IBRD was formally recognized as an independent specialized agency
of the UN in 1947.18 Though the express purpose ofthe IBRD was to rebuild
Europe, the fact that it was a lending institution actually hampered the pace of
reconstruction. The booming US economy would only be kept alive if it soon
found viable markets outside its borders, so the Marshall Plan of 1947- primarily
a package ofgrants as opposed to IBRD loans - was implemented to speed
reconstruction,"
By the 1950s,the European economies were recovering, and the joint
operation of the IBRD and the US Marshall Plan was seen as a success. As a
result ofthis success, and perhaps as a result ofcontinuously growing Western
economies needing additional "viable markets," American concepts of
"development" broadened beyond war-tom Europe. In his 1949 inaugural address,
President Harry S. Truman laid out the groundwork for his Point Four doctrine
extolling the benefits ofscientific and industrial progress. He declared that these
15
human suffering and to battle Communism,"
The influence the Cold War had on the tone of international effortsduring
this timecannot be overemphasized. Though the USSR was an Allied force,
former British Prime MinisterWinston Churchillwas leery of it and delivered a
1946 speechin which he referred to the USSR as an "iron curtain" that had
"descended acrossthe [European] continent." Though the SovietUnion
participated in the Bretton Woods conference, it did not ratify the Articlesof the
Bank: or of the IMF. During a 1947 meetingof the UN General Assembly, the
. USSR actually referred to these organizations as "branches ofWall Street"and
argued that the Bank was "subordinated to political purposeswhich makeit one
instrument ofone great owner [the United States]'"22With relations between the
West (the US and Great Britain) and the USSR - all membersof the United
Nations SecurityCouncil - rapidly deteriorating,the newly formed UN could no
longerexistas a body solely for international security. Countries worldwidebegan
allying themselves with one of the superpowers- either the US or the USSR. The
North AtlanticTreaty Organization(NAT O), a security alliance ofWestern
European and North American countrieswas establishedin 1949,23 while the
Warsaw Treaty, a security alliance of European Eastern bloc countriesand the
USSR, was signed in 1955.14 With muchofits membership dividedalong
ideological linesbythe 1950s, the UN decided to ground its work in combating
poverty to prevent international turmoil, and the IBRD followed suit," The
economic development through private enterprises in developing countries.
Aside from the Cold War, another geopolitical development that
foreshadowed complexities to come was the Bandung Conference of 1955. The
United Kingdom was severelyweakened during World War II, and following this
war, the age of colonialism was coming to an end. As colonies transitioned to
statehood, some Asian and African leaders believed it would be best to resist
alignment with either NATO or Communist countries. These leaders organized
the Bandung conference to build solidarity and establish an alternative alliance for
social, political, and economic security among young countries." In the words of
Maggie Black, writer andjoumalist on development issues,
This [conference] was the genesis of the Third World': an attempt to
assert a group identity separate from both the capitalist West - the 'First
World' and the Communist Eastern bloc - the 'Second'. As a geopolitical
entity, the Third World never stood a chance. But that was not obvious
at the time."
2.3 Middle History, 1960s - 1980s: The Rise and Fall of the
Developing World
The concept of a "developing world" gained steam by 1960, as 17African
colonies declared independence" and, in 1958, the Organization of the Petroleum
Exporting Countries (OPEC) was formed.'? Soon after, in 1961, the first official
summit of the Non-Aligned Movement (NAM), inspired by the Bandung
Conference, was held."
17
one senseof the word. W.W. Rostow's The Stages ofEconomic Growth was
publishedat the start of the decade? and economists were optimisticthat with
enough monetary aid, new countriescouldeasily be brought up to speed and
integrated in the world economy much the waywar-tornEurope had been. In
1960, richer nationsalso made promisesof assistance: The UN kicked offits
Decade of Development,"and the IBRD established the IDA - its new lending
arm specifically for the poorest counrries." A yearlater,the US instituted its own
humanitarian programs: the Peace Corps, the Alliance for Progress, and Food for
Peace."
The political viewfrom the perspective of the Third World alsolikely
appeared promising, sinceNAM membership more than doubled from 1961
1970. Bythe timeof its third summit in 1970, the NAM comprised 54 nations."
and during each summit since1961, members continued to affirm the principles of
peaceful coexistence, support for movements of national independence, and
resistance to Cold War military alliances."
Even within the UN, developing nationswere making statements of
solidarity. The Joint Declarationof the Seventy-Seven Countries, signed in 1964,
was an agreement among membercountries to promote collective economic
interestsand createjoint negotiatingcapacity in the UN, and the Charter of
Algiers, the Group of77Countries' (O-71s) first set of economic and development
demands,was signed in 1967.
18
with which to be reckoned. It was home to nearly 75% of humanityby 1970,'J7
repletewith natural resources, and establishing its political clout." Developing
countrieswere certainly seen by the US and USSR as ripe opportunities for
alliances or extensions of their respective "spheres of influence." With the Cold
War functioning as the geopolitical backdrop, one hardly wonders why the
superpowers (the US and the USSR) becameparticularly interested in
establishingfriendly (or intimidating) terms with new states."
This reality would causetrouble for internationaldevelopmentefforts.
Though professionals in the development industryinitially believed that newly
independent nations could becomesignificant players in the global economy by
the end of the 196os,40 their commitment to "neutrality" in the faceof both state-to
state dealingsand domestic strife(oftencondoned and/or financed byone of the
superpowers) mayhave been what palleddevelopment efforts.
Within a number of developing countries,a combinationof civil unrest,
difficulty in balanceof payments, and corruption made donor countries skeptical
that their developmentmonieswere truly part of a worthy cause. Without a
doubt, these problemsoccurred in somedeveloping states becauseof their
relationships with the US or USSR,41 but neitherthe World Bank nor the UN
wished to get involved in the dealingsof sovereign nations. The World Bank
Group did introduce ICSID to settle disputes between developing States and
foreign investors in 1966, but this did not address the skittishness ofdonor
19
international development, enthusiasm in donor countriesfor funding
international aid dwindled toward the end of the 1960s. Asidefrom decreasingaid
allocations, donors alsobegan calling for policy reforms in the Decade of
Development program. In response to these measures, in 190 then World Bank
President George Woods called for a "GrandAssize," or seriousreview, of how
international developmenthad been done."
The Pearson Commission delivered what Woods calledfor in its 1969
report, Partners in Development It reported that development resultswere
mixed: Internationalaid had been successful in growing Asianeconomies, but
there was still much to be done for Other geographicregionsand the poorest
sectionsof the world population." Additionally Pearson concludedthat successful
developmentefforts went beyondeconomic growth and includedsocial progress,
redistributionof wealth,efficient administration, political stability, and
democratic participation." Allthe while, newWorld Bank President Robert
McN amarabrought the issueof poverty alleviation to the foreof the Bank's
agenda."
Unfortunately beforemuch could be done on the recommendations of the
Pearson Commission, changesin US monetary policy would turn the tide of
international development. For the US, the combination of expensive military
engagementsabroad - both overt and covert- kept the military-industrial
complex running at home. Meanwhile the increasing availability of inexpensive
20
global economy. Though this type offoreign and trade policy proved beneficial to
the US during the late 1940S through the 1960s (as the international economic
system was hungry for its anchor currency - US dollars), by the end of the
Vietnam War, the Nixon administration became concerned about the US trade
deficit, rampant government spending on both domestic social justice programs
and military campaigns, and what appeared to be an international dollar glut. In
1971 the administration decided to end the fixed relationship between gold and the
US dollar that had been in place since the creation of the IMF and IBRD at
Bretton Woods.46 It was this change in US monetary policy that would
inadvertently spark both triumph and tragedy for the Third World.
Once the dollar no longer had its value fixed at $35 per ounce of gold,
international financial markets promptly devalued it. As a result, all goods that
had their value pegged to the dollar also dropped in price. One of those goods was
oil. Oil-exporting countries felt the blow of the weakened dollar in their reduced
purchasing power, and Middle-Eastern countries already upset over US support
ofIsrael during the Yom Kippur War called for a temporary boycott ofoil exports
in 1973. The boycott was wildly successful: Oil prices quadrupled, and so-called
"petrodollars" flooded the coffers of oil-producing nations."
The developing world saw the oil shock as its cue to get highly
industrialized nations to renegotiate international trade and financing on their
terms. Through its weight of numbers, the G-n called for a New International
21
1974 and 1975.48 Successseemedwithin grasp. As Black notes,
No less a figure than Henry Kissinger, then US Secretary of State, said
that the industrialized world was ready to enter negotiations with the
developing nations on a restructuring ofglobal financing and trading
institutions.t?
This marked the high point of internationalrelations as far as the
developingworld was concerned. Asthe decadewore on, however, no further
action was taken, and the level of developing world unity inspired by the 1973 oil
shockwas neverrepeated.
Blackexplains this likely occurred for two majorreasons. First, few
resourcescompare to oil in terms ofindispensability, so no other resource-based
embargoes caught much attention. Consider that fewalternatives existfor oil
today - let aloneduring the 1970s. Second,during this time, the economicgulf
between low-income and middle-income developing nations widened
dramatically, and their interests naturally began to diverge. So much moneywas
made byoil-exporting nationsduring the oilshock that revenue simplycouldn'tbe
spent faster than it was generated. Subsequentlymost of these petrodollarswere
deposited into banks, and this floodof new moniesset the stage for dependency
and crisisfor low-income developing nations." Once poorer developing nations
assumed"debtor nation" status in the 1970s, this put nails in the coffin for the
dream of a united and powerfulThird World.
22
a rainyday; theyexpected returns on their investments. This posed a challenge to
banks, since bank profits are based on the difference between interest income
generated through loans and interest payments madeout to investors with
accounts. Once petrodollarsentered the international bankingsystem, bankers
were rushing to find lenders to makegood on their advertised rates to investors
(and to keepthe bankingsystem running). Stagflation put a crimp on demand for
loans in industrialized nations, but willingborrowersexistedin Latin America,
Africa, and Asia. Not onlywere these non-oil-exporting economies "up-and
coming" and eager to improvetheir infrastructures, but alsotheywere doublyhit
by the oil shocks. They neededloans to coverthe cost of expensive oil imports,
and theywere losing money on their non-oil exports. Just as industrialized
countries didn't have much appetite for loans,demand for exports from the least
developedcountries(LDCs) was low as well." Put succinctly, bankswere awash
with petrodollars,and loans to developing economies were a wayto put them to
work Additionally internationalaid contributionswere stilllow at this time, so
loans made available by private banks seemed to makeup for the difference.
Another oil shockoccurred in 1979, and it was perceived by manyin the
industrialized world as another stunt by OPEC to maximize profits," Though it
was actually the resultof instability in Iran, it acted as a catalystfor conservative
ranklingin the US and elsewhere - most notablyGreat Britain with the riseof
Margaret Thatcher and her brand of economic conservatism. However it was
23
US that probablydid more than anything to "light the fuse" of the debt crisisin the
1980s.53 US unemployment rateswere drivento their highestsincethe Great
Depression - againdecreasingdemand for LDC exports.At the same time, the
Federal Reserve increased interest rates to double digits."
Petrodollar loans held by developing countrieshad variable interest rates,
so the dramatic changesin US monetary policy doubled - eventripled - the debts
of LDCs practically overnight.s By 1982, Mexico becamethe first LDC to
publicly announcethat it could no longer keep up with its interest payments. All
other Latin American debtors (except Colombia) and manyother foreign debtors
soon followed."
A new crisis was beforeinternational monetaryexperts: What would
happen if the big loansto LDCs from big transnational banks turned out to be
bad? Believing that the debt crisis threatened the entire internationalfinancial
system, experts called upon the IMF to provideemergency loansso that debtors
could continue makingtheir interest payments. Though monetaryand trade
policy in the West played a significant rolein the situation,the prevailing
philosophy of the IMF was to treat debtors' balance ofpaymentsproblemsas
debtors' problemssolely.
This viewpointcan acmally be traced back to the Bretton Woods
conference. British economistJohn Maynard Keynes and US economist Harry
Dexter White disagreedon the approach the IMF should takefor addressing
24
nations adjust their policies to fix trade imbalances, but White was more
concerned about inflationary pressures. He believed that balance ofpayments
deficits could be fixed within deficit countries through austere policy changes.
Consequently in the 1980s, the IMF viewed the economic problem of
deficit nations as one ofexcessive demand in their respective domestic economies.
The way the IMF prescribes to alleviate excessive demand is known as "structural
adjustment": The troubled economy must cut back on imports and government
spending, and it must increase exports. What this meant for many deficit nations
was if they wanted to preserve their credit and obtain funds from the IMF to
continue making their loan payments, they would have to make drastic cuts in
government spending on public services such as healthcare and welfare.
Government-owned industries were also sold off to the highest private bidders.sS
Resource extraction projects - which bode well for increasing exports but not for
environmental health - would also have to quicken pace. Such conditions were
specified by the loans offered by the IMF and termed "structural adjustment
programs" (SAPs).
The IMFwas well aware that SAPs would need time to help indebted
countries out of the holes they were in, and the World Bank played a supporting
role in offering economic advice and providing additional loans. The IMFs goal
in approving structural adjustment loans was actually to bring deficit nations'
debts to a "manageable" level - and not to save them from the predicament of
25
adjustment would bear a heavy human toll over the years to come, but their
warnings fell upon deafears in the US Treasury and Reagan administration."
Primary concerns ofstructural adjusnnent architects were (I) that the
international banking system should avoid collapse, (2) that indebted developing
countries learn fiscal responsibility, and 13) that international banks not receive a
"handout" from the IMF and World Bank for making speculative loans." Though
these points may seem reasonable enough, it remains questionable if the human
suffering within indebted LOCs has been worth it.
From 1980 - 1989 the IMF and World Bank approved and/or managed
structural adjustment loans and/or programs for at least 43 countries." Over this
period, the total external debt burden of all developing countries more than
doubled from $660 billion to over $1.5 trillion." Additionally for the first time, net
financial transfers between rich and poor nations went into reverse; debt
repayments from developing countries surpassed the inflow of aid, investment,
and private lending from wealthy countries/?
The reasons for the drop off in aid contributions were likelytwofold. First
the debt crisis shook faith that aid would, in fact, benefit citizens that most needed
it. Second the neoliberal philosophies of the Reagan and Thatcher
administrations also set the tone for decreased aid from the West in general . As
Black observed,
26
Minister Margaret Thatcher, the UK aid budget was only given the kiss
oflife after it was pointed out that it was useful for strategic leverage with
allies, and that much of it went to the British end ofthe development
industry - UK companies, consultants and academic institutions."
The 1980s became known as the "Lost Decade" ofinternationaldevelopmentfor
both the huge financial outlays LDCs were required to makeand the meageraid
contributions of donor countries. As a result,the plight of the poorest populations
in LDCs worsened, as fewerfundswere available for governmentassistance,
healthcare, education, and in some cases, evendomesticfood production.v
2.4 Late History, 1980s - Present: The World Bank Attempts to
Reinvent Itself
By the end of the 1980s and the start of the 1990s, the World Bank - as a
developmentinstitution - was viewedwith a critical eyeby manygovernmental
and nongovernmental aid organizations includingOxfam, the UN Children's
Fund (UNICEF), and the US Agency for International Development(USAlD).
The Bank'spoor reputation among parties that should have been its allies in
internationaldevelopmenttroubled manyWorld Bank staffand Bank presidents
Barber Conable (1986 - 1991) and James D. Wolfensohn (1995 - 2005).66 The
Bank alreadyknewfrom previousscaresin the 1960s and 1970S that a poor public
image could seriously threaten the inflow of development donations from
wealthier countries.Thus throughout the 1980s and 1990s, the Bank underwent
dramatic bureaucratic transformations in an attempt to be more responsive to the
27
environmental conscientiousness in its development efforts.
First the Bank established a Small Grants program in 1983 to promote
cooperationamong nongovernmental organizations (NGOs) working in
development, government, academia, and the media. A yearlater, The NGO
Working Group was established to providea forumfor development issuesand to
build consensus among organizations regardingthe effortsof the World Bank
Significant institutionalchangescameunder the leadership of President Conable
in 1987, when all staffmemberswere reorganized from two previouscamps
"Programs" and "Projects" - into combinedCountry Departments. Regionaland
Central EnvironmentDepartments were also created that year." It was hoped
that this changewould shiftthe Bank'sfocus awayfrom money moving and
application processingand instead toward developing regional awareness for the
strengths and weaknesses of the projectsproposed for financing.
In 1988 MIGA was established to guaranteeforeign investors against
noncommercial losses. The need for this typeof agency might havebeen
particularly important during the 1980s, sinceit was overthis time that the Bank
and manyof its funded projectswere particularly unpopular.The bank's
involvement in high profile, environmentally destructive projects,such as the
Polonoroestehighway program in Brazil and the Narmada Valley Dam in India,
won the disdainof environmental advocates." Prior to the environmental
awakening of the Western world in the late 1960s, environmentally destructive
28
century, however, such projects came to beviewed as politically unacceptable.
The Polonoroeste project - also known within the Bank as the Northwest
Integrated Development Program'? - became a lightning rod issue in the 1980s
due to the rapid deforestation of Brazilian rainforest and local conflicts that result.
Indeed the popular interest of the West in the condition of South American
rainforests eventually lead to a full-blown Congressional hearing in 1989on the
environmental impacts ofWorld Bank projects. 70
During the hearings it was found that though the Bank had adopted a
policy mandating environmental impact assessments (EIAs) for its projects back
in 1978, shortcomings to how assessments were conducted diminished their
effectiveness. Rather than have independent contractors or the Bank do the
assessment itself, the governments ofsite countries were to be responsible for the
EIA?' Since many LDCs lacked both adequate funding and technology to do
accurate assessments, EIAs were little more than a formality. As a result of these
hearings, the US Congress decided to impose additional environmental
conditions on money donated to the Bank,"
Critical internal reports also showed reformers how much needed to be
done to make the Bank work even on its own terms - giving ammunition to more
damning opposition embodied in the '50Years is Enough' alliance calling for
abolition ofthe Bretton Woods institutions altogether. Mass popular protests,
particularly those against the N annada Valleydam project in India, undermined
29
of sustainable development. These pressures, fed into the Bank through its major
shareholdinggovernments (aswas the casefor the US Congressional hearings)
forced further attempts at reform.
On the heels of the Congressional hearings, the Global Environmental
Facility (GEF), a fund designed to support UN multilateral environmental
conventions on biodiversity and climatechange,was established in 1990. The
mission of the GEF and the challenges it faces are discussed in more detail in
Chapter6:A Critical Lookat One ofthe WorldBank'sReinventions: The
GlobalEnvironmentFacility. The GEF is of particularinterest becausefunding
for anyprojectsdesigned to mitigateenvironmental impactson biodiversity from
development sponsored bythe World Bank: comefrom this entity.
In 1992 the Bank'sannualWorld DevelopmentReport focused on the
environment." This apparent greeningof the Bankwas likely inspired bythe Rio
Earth Summit of 1992.74 This momentum for environmental conscientiousness
probablyalso helpedthe Bank institute greater measures for accountability from
1992 - 1993. In 1992, the Bank agreed to conduct an independent investigation of
its involvement in the highly controversial Sardar Sarovarproject in India (and as
a result, the World Bank withdrew its support of the aforementioned N annada
dam in 1995). In 1993, the World Bank established its own Inspection Panel to
investigate external complaints from groups negatively impacted by Bank-funded
projects. Additionally the IFC, the ann of the World Bank Group promoting
30
financial intermediaries."
Despite these efforts, the Bank remained unpopular due to its slower
developments in transparency and continued support of the IMFs SAPs. 1994
marked the 50th anniversary of the World Bank, and the Bank was well aware of
its tarnished public image. Hoping to enhance its reputation, the Bank opened its
Public Information Center in Washington, DC during that year. In keeping with
its public relations efforts, President Wolfensohn established additional landmark
programs between 19¢ and
2000.76 In
19¢ the Quality Assurance Group (QAG )
and the Heavily Indebted Poor Countries (H IP C) initiative were launched, while
in 1997the Government Action Plan and adaptable lending were instituted.
Through the QAG, Bank accountability was brought to a new level
through self-monitoring of advisory services and project supervision. Reports
made on projects to the Board of Executive Directors acted both to inform
member countries of project progress and to curb corruption and waste - issues
that were never of great concern to the Bank during the Cold War.77 Meanwhile
the HIPC initiative aims to move the poorest, most indebted countries past
endless debt restructuring toward lasting alleviation ofdebt. In 1999 part of the
HIPC initiative granted approximately $34 billion in debt-service relief,"
As another departure from the Bank's previous laissez-faire stance on
human rights violations and government corruption, the Governance Action Plan
drives clean government initiatives in developing countries. From 1997- 1999 over
31
adaptable lending instrumentsgaveclienteconomies more sayin howWorld
Bank monieswere to be used.?
In 1998 and 1999, the IFC revisited and strengthened its existingsocial
and environmental policies, and the Bank announced its new mission: "Our dream
is a world freeof poverty."The Bank alsodramatically changed its approach to
poverty-reduction strategiesat this time.With the adoption of the Comprehensive
DevelopmentFramework,the World Bank and the IMF agreed to implement
poverty-reduction strategies that were penned byclientcountries as opposed to
those that were prescribed byWestern experts. 80
Allof these changes, however, did little to improvethe Bank'simage.
During the year 2000, its Annual Meeting in Washington, DC drew huge
protests. Perhaps in response to this pressure,the Bank delivered $34billion in
debt-service reliefto 22 countries. During this yearit alsolaunchedthe Global
DevelopmentGateway- a web portal where userscould research and contribute
information, resources, and development tools,"
2.5 Conclusion
It would appear that in the last decade, the Bank has made significant
changesfor the better. It adopted social and environmental policies for its
projects,becamemore transparent and decentralized, and launchedinitiatives for
32
strategies.
The World Bank, however, remains a tool of the internationalm
system and a proponent of world trade. These ends do not always mes
effective povertyreductionor environmental conservation. Fundament
World Bank was born to rebuildwar-tom economies so that theycoul
players to the globaleconomicsystem. Once that was achieved, the Ba
on to "underdeveloped" economies with the same goalsin mind.
However underdeveloped economies were quite different from
Europe, so the development strategiesthat worked in the past did not
directly. The massive waste of development projectfunds that characte
developmenteffortsduring the Cold War were completely unanticipat
Developmentexperts failed to appreciatethe lackof experience or kno
formercolonies had with Western economictheoryand technology, an
profound influence of the Cold War was neverfully recognized. Unlike
Europe, developing countries had to forge their political identities and
international relationships in Cold War environs: They could alignthe
with the capitalistWest (First World), the Communist Eastern Bloc (
World), or join the NAM (Thi rd World).
At the time, US foreign policy was oriented toward the "contai
Communist ideology - typically overshadowing other development eff
to the US, even the rumblingsof self-determination among Third Wor
Communists.Thus during the Cold War, both the US and the USSR threw
their support behind regimes each perceived as"friendly" to secure their respective
spheresof influence - even if corruption and serioushuman rights violations were
rampant. Both superpowersalsofunded military action against parties perceived
as ideological threats. Multinational aid agencies such as the UN and the World
Bank were aware that manydeveloping countrieswere politically unstable,but
theydidn't intervene in anysignificant ways so as to appear neutralto the
superpowers. As a resultaccountability for development projectswas low and
much international aid was lost to roguegovernments.
The fallout from unilateral changesin US monetary policy in 1971 was also
wholly unanticipated. When the US decided to devalue the dollar to bring its
deficits into line,this decision acted as the dominothat depressed oil priceson the
world market,angered petroleum-exporting nations, sparked the oil embargo of
1973, and quadrupled the price ofoil for the better part of the decade.Asidefrom
making petroleum-exporting nationstremendously rich in a veryshort time, the
international bankingsystem was floodedwith petrodollarsthat neededto be
recycled as loans to someone,somewhere - and the recipients ended up being
developing nations. Initially, ubiquitous,cheap loansseemedto be another
fundingoption for cash-strapped, growingeconomies - particularly sincedonor
countrieswere actually decreasingallocations for international aid. But once the
interest rateson the large,variable-interest loansskyrocketed, international
34
threatening confidence in the entire global monetary system. To avoidcollap
and keep businessrunning smoothly, the IMF and World Bank were charge
with providingemergency loansand SAPs for flagging debtor economies.
Structural adjustment calledfor austere measuresthat cut governmentfundi
within debtor countriesfor social welfare programs - a movewith humanitar
demographic, and environmental implications as will be discussedin Neo
Malthusian and Neo-Marxian Viewson the Mechanisms ofEnvironmental
Destruction. In keepingwith the IMF prescriptionfor "excessive demand" a
Rostoviandevelopment theory, Bretton Woods also pushed for increased na
resourceexports - another environmental pressureon top of the desperate
humanitariancondition. Such macroeconomic adjustmentswere advocated
that indebted economiescouldfind the money to continue makingtheir inter
payments. Over this timefrom 1980-1989, the total externaldebt burden of a
developing countries more than doubled from $660 billion to over $1.5 trillio
Debt repayments from developing countriessurpassed the inflow of aid,
investment, and privatelendingfrom wealthy countries,and the 1980s becam
known as the "Lost Decade" of international development.
Though the Bank is wellaware that the conditionsof today's world
economy are quite different from what existedimmediately afterWorld War
onlyrecently has it attempted to transform its approach to international
development. These transformations appear to have been motivated by the B
hoped would be international developmentallies. The Bank's negative reputation
was due to its supporting role in the IMFs SAPs, which gavedebtor economies
strict guidelinesfor macroeconomic adjustments. In the Bank's most recent
program designs, client countries are instead givenmore of a sayin plans for
macroeconomic restructuring and in the applicationof World Bank: funds for .
projects. However the following questions remain: Though debtor countries are
given more of a sayin the fund disbursement process,does their participation
matter during negotiations,or do rich donor countries continue to make the most
substantive decisions? Do World Bank: policiesthat aim to preserve
accountability, environmentalquality, and socialwelfare actually achieve these
ends?Answers to these questions can be uncoveredby looking more closely at
World Bank programs and policies. A specialWorld Bank program specifically
designed to preservebiodiversity, the Global Environment Facility, will be
considered in greater depth in Chapter 6: A Critical Lookat One ofthe World
Bank'sReinventions: The GlobalEnvironmentFacility.
Before looking more closely at the connection between the World Bank's
developmentpractices and environmental destruction, however, it is important to
understand the Bank'sgoverning developmentphilosophy. Whether or not one
agrees with the global economicagenda of the World Bank, its actions do rest
upon some economictheoreticalassumptions. Those assumptions are discussed
in the next chapter.
36
Humanitarians, developmentexperts,and globalization advocates hav
least one interest in common- the eradication ofworld poverty. Though their
primarymotivations for addressingpovertymay be divergent, the benefits of
povertyalleviation are broad. Over the last century, it is the advocates of
globalization who have cornered the marketplace of ideason how economic
developmentought to be practiced. Rostoviandevelopment theory - named af
its architect,W.W. Rostow - has guided both the Bretton Woods Institutions
and internationalaid agencies in their development effortsfor decades.
Rostovian development theory" is rooted in neoclassical growth theory
and is a formal representationof US economicdevelopmentpolicy following
World War II to the present. Generally speaking, the fundamental neoclassical
model's assumesthat for a given economy, production exhibitsconstant return
scale. This meansthat as moreworkers are employed and factories are built, th
economygrows, and a growing economy is what increases the wealth and well
being of the population.
This is not all, however, as economic efficiency is alsoimportant for
increasingthe rate growth. Efficiency, or output per worker, depends on the st
of the capital per worker - that is the amount and qualityof capital(e.g. buildin
machinery, software) available to each worker to produce goods. Thus the
primaryquestion in neoclassical development theoryis how to increase the sto
of capital.
tools,machinery, and other labor saving devices; however, the qualityof capitalis
dependent on technological innovation. As a result, neoclassicists focus their
energieson ways to encouragecapitalaccumulation, expenditure,and innovation.
Neoclassical economics assumes that the amount of money an economy saves is a
good approximation for the amount that is spent on capital,thus wealth creation
and the establishmentofsocial norms and institutionsamenable to finance are
important piecesof the neoclassical agenda. But neoclassical economics is silent
on the derails ofexactly howinstitutions,organizations, government
interventions, or other programs should be launched to ensuresuccess.
To address these details,in his most notable,influential, and controversial
work on internationaldevelopment economics, The Stages ofEconomic Growth,
W.W. Rostow advances a five-part theoryfor development. Rostow spoke to both
economic and non-economic indicators,and the chronological stages of his theory
are (I) the traditional society, (2) the preconditionsfor rake-off, (3) the rake-off, (4)
the drive to maturity, and (s) the age of high massconsumption. Based upon an
historical economic analysis ofdifferent economies and when their Industrial
Revolutions occurred,it is Rostows prescriptionof these stages and their
transitions that remain highly influential to the World Bank 84 Each stage and its
transitionsare summarized below.
In the first stage, an assumption is made that technological applica
and advancement is ad hoc and hardly an economic priority to the society.
actually the lack ofwidespread technology and technological advancemen
as the prevalence of the agricultural sector, that characterizes Rostovian
traditional societies. During the middle of the zo" century, many former co
fit this description.
3.2
Stage 2: The Preconditions for Take-Off
In the second stage, Rostow noted that there are economic and no
economic changes that must occur. On the economic side, Rostowacknow
the importance of increasing the rate of investment and of increasing per c
output; however, he did not agree that these increases alone lead to sustain
economic development. He added that a demand for greater technologica
investment must be established, and he argued that the drivers for technol
demand are trade as well as the development of urban and suburban popu
In order to grow these new sectors ofthe economy, agricultural and extrac
sectors (such as mining or logging) must rapidly expand to generate enoug
surplus for export as well as to feed burgeoning urban and suburban popu
This pressure to grow is thought to likewise incur pressure to innovate.
Additionally the pressure to innovate creates a feedback loop between the
resource and technological sectors. In order to increase agricultural yields,
necessarily be invested in technology that onlythe technological sector can
provide. It is important to note that in the Rostovian descriptionof this stage,
natural resourcesectorsform the foundationfor the developed economy - it is
from a flourishing natural resourcesector that technological sectors develop.
What this meansis that from a Rostovian point ofview, subsistenceactivities in
agricultural and extractive sectors bydefinition cannot be sufficient for an
economy to industrialize. This explains whyproponents of globalization - manyof
whom are quite active in the World Bank - and proponents of environmental
sustainability through subsistence living fundamentally cannot see eye-to-eye.
On the non-economic side,the governmenthas an important role to play
in providinginfrastructureand education.Rostowalso made some statements
about what he believed are necessary social preconditions for successful
industrialization. He believed that the economy's leadership must value
technology, and that the society as a whole must embracechange and specialized
function. One of Rostows most interestingbeliefs about social preconditionsis
that nationalism maybe another prerequisite. Rostow argued that healthy visions
of national glory, as well as resentmentof foreigners, could inspirelocaltalent to
pursue modernization. Additionally, nationalism could inspirepolitical agendas
for increased education, research, and technological design.
40
The third stage, "the take-off into sustained economicgrowth, is d
by three conditions: (I) a substantial risein the rate of productive investme
percentage of national income or net national product; (2) the developme
least one substantial manufacturingsector, where "manufacturing" includ
processing of agricultural or raw materialsby modem methods (the assum
that the said manufacturing sector'sprocesses set in motion a chain of furt
modernization requirements that provide externaleconomiceffects indus
nature); and (J) the existenceor emergence of an institutional frameworkt
exploits and sustains the economic take-offsuch as an efficient transport s
The take-offis uniquelycharacterized by the first two conditions, while th
condition also playsa fundamental role in the fourth development stage, "
to
maturity."
Rostow admitted that the paths to take-offhavediffered historical
economies, but some general patterns could be described. The developm
the first condition, a substantial risein the rate of productive investment a
percentage of national income or net nationalproduct, is typically charact
the rise of an investment classthat does less hoarding and more productiv
investing. Additionallythe extensionof financial institutions and expansio
long-rangefinancingoften precede take-offperiods. Of note, Rostow beli
increased demand for productiveinvestment - that is investing in bankin
loanable funds.
Strategiesfor inspiring more productiveinvesnnenthave manifested in
two majorways. One approach is land reform, where land ownershipis
transferredfrom the hands of"hoarding" landowners- those who keeptheir
surplus resources to themselves - to the State. The State then redistributesland
to working-class landowners - ofwhich some later becomeentrepreneurial elites
that driveeconomic take-off and later, sustainedeconomic growth. This explains
whythe World Bank has supported the saleof landsthat previously were tribal
commona'" Yet another productiveinvesnnentstrategyis to increase effective
demand for domestically manufactured consumergoods, providingincentives to
businessowners to increase production and innovate.
Generating sufficient demand to incentivize increasedproductive
invesnnentliesat the heart of Rostovian development theory,and Rostow
believed that it would be verydifficult to generate this demand without expanding
export markets. He also argued that foreign capital could playan important
supporting role, though hestated that a developing economymust be able to
generate the capital initially required for economic take-off on its own forits
transition to be successful. Thus Rostow envisioned foreign capital as most useful
for largeoverheadprojectssuch as necessary infrastructure. Indeed it is to
infrastructure projectsthat most World Bank moniesgo.
42
one substantial manufacturingsector (where"manufacturing" includesthe
processingof agricultural or raw materials by modem methods), Rostow firs
elaborated on what he believed are the essential sourcesoflocal entrepreneur
during rake-off. Socialmotivation and market reorganization in the agricultu
sector are posited as necessary preconditions.
For social motivation, Rostow stated that the riseof an entrepreneuri
classwould occur not onlyonce a risingentrepreneurial classvaluedtechnolo
but also if the aforementioned class feltconventional routes to social success w
limited and if the prevailing social structure was flexible (or weak) enough to
material acquisition by commonersfor upward mobility. Market reorganizat
the agricultural sector could be a catalyst for the riseof such an entrepreneur
class, but the entrepreneurialclass itselfcould alsobring about market
reorganization through nonviolent or violentdemands on its government.
According to Rostow, once an entrepreneurial classwas mobilized,
growth sectors in the economy could be grouped into three categories: prima
supplementary, and derived. Primarygrowth sectorswere most important du
economictake-off and drove the economy's transitionfrom traditional to
industrialized. Both supplementary and primarygrowth sectors derived
momentum from changes in the cost-supply environment and technology
diffusion, while derivedgrowth sectorswere linked to changesin demand.
expansionary forces elsewhere in the economy due to their rapid growth.
Historical examples includethe cotton-textile industryin Britain; railroads in the
United States, France, Germany, Canada, and Russia; timber in Sweden;meat
and dairyin Denmark; and the silk: industryin Japan.Thus when the World Bank
considerswhether or not to fund a project,it alsoattempts to judge the project's
expansionary economic potential.
Supplementary growth sectors likewise advance, either as a requirement
of, or in direct response to, primarygrowth sectors. An historical example is the
development of coal, iron, and engineering industries to support the expansion,
development, and maintenance of railroads.
Derived growth sectors advance in relation to the growth of total real
income,population,industrialproduction, or someother modestly increasing
parameter. Typicalexamples include foodoutput in relationto population and
housingin relation to family formation.
Sincethere is no formula for economic take-off(different types of
industrieshavehistorically acted as the primarygrowth sector), Rostow identified
four basicfactorsof successful economic transitions. First an enlarged effective
demand for the primarygrowth sector's products must exist,yielding a foundation
for rapid growth in output. Second newproduction functions (e.g. technology) as
wellas expansion of capacity must be introduced to the primarygrowth sector.
Third the society must be capableof generating the initial capital required for
44
state entrepreneurs controllingmodes of production, as opposed to hoard
Fourth impressive growth alone will not characterize a sector as one that
start economictake-off; the expansion and technical transformation of a p
growth sector must induce a chainof requirements for increasedcapacity
sectors to which the society progressively responds.
Though Rostow believed the economicand social influence of ec
take-off could be felt rather quickly, he acknowledged that this stage ofec
developmentrequires a massive set of preconditionsthat maytake a very
time to materialize. Rostow'svision of the necessary preconditionsfor tak
both entrenched and far-reaching, spanning acrossa society's economic
organization,its politics, and its scale of values. MoreoverRostow believ
take-offbeats two additional notable social effects: enlarged urban areas a
political struggle between traditionalistsand entrepreneurs. In Rostow's
urbanizationis necessary and beneficial becauseit enablesboth a large po
oflabor and an organized market structure that sustainsindustrialization
Likewise he believed that the triumph of modernists overtraditionalistsw
bring sustained growth to the economy, as wellas the everyday benefits o
technology.
Manyelementsof Rostows vision for this stage serveas additiona
of contention for globalization and social justice proponents. Advocates o
Rostovianviewsee slumsand riots as necessary stages on the path to
Though Rostow might be correct that such conditionsoccurred in the past, social
justice advocatesargue that developmentin the zo" and zr" centuries could be
achieved more humanely.
Additionally although Rostow's necessary economicconditions for
sustained growth haveinformed most internationaldevelopmenteffortssince the
1960s, there are implicitassumptions that the World Bank and IMF have
appeared to ignore (and unfortunately neverfully acknowledge). Consider that the
role of substantial government investmentshould be not onlyin infrastructure but
also in public education, in which the Bretton Woods institutions do not invest.
Additionally Rostow believed that technologytransfer programs would haveto be
adequatelyfunded and executed. Rostow finally becameexplicitabout these
points in the preface to the third edition of The Stages ofEconomic Growth".
3.4
Stage 4: The Drive to Maturity
Rostow defined this stage of economicmaturity as that in which society
applies the range of modem available technologies to the bulk ofits resources. He
also believed this stage would be characterizedby significantdifferentiation across
sectors.
Historical examples of societiesstage four includethe post-railway US,
German, and French economies, with the riseof steel and differentiation that took
place in engineering at the tum of the zo" century. Additional examplesinclude
46
natural resource bases. From 1890 - 1930, Swedenshiftedfrom timber to w
pulp, planed board, and matches; developed its miningindustry; and bega
producing goods domestically it formerly imported. From 1880 - 1940,Jap
agricultural output expanded,urbanization pickedup pace, and land refor
redistributed wealth so that developing modem and financial sectors coul
it. Likewise newindustriestook hold such as railways, shipbuilding, cotto
manufacture, silkcultivation and manufacture, coaland pig iron productio
arms production. Note that historically it has taken societies approximatel
yearsto makethe transitionfrom take-off to maturity. Neverthelessthe W
Bank and its donor countries had been optimisticthat such gains could be
achieved in a fraction of the timewith properlytargeted interventions.
Though the aforementioned historical examples can givethe reade
concept of what Rostow meant by"thedrive to maturity," Rostow admitte
the definition of this stage ofeconomicdevelopment is a bit hazy. He agre
heterogeneity always exists in societies, so some regions will fully realize th
benefitsof modernization (typically large metropolitancenters)whiJe othe
remain technologically backward(such as mral areasor pocketsof the pop
that valuecultural traditions overmodernity). Rostow also noted that dur
stage, incomeper capita - and typically consumption per capita - rises, bu
no fixed connectionbetween technological maturityand either per capita
consumptionor uniformity of per capita income. In other words, Rostow
people behind.
On this note, Rostow made some interesting observations. He conceded
that the path to economic maturity bears "within it the seeds not of its undoing
for this analysis is neither Hegelian, nor Marxist - but the seeds ofits own
modification/'? He noted that the makeup of the work force must change, and
that under modem reorganizations, workers are likely to perceive the benefits of
unionizing. He also stated that this economic stage lays the basis for political and
social pressures that will lead to a long succession of humane economic
modifications such as a minimum wage, paid vacation time, and other progressive
reforms. He also argued that the mentality ofsuccessful political leadership must
change from ambitious buccaneering to shrewd professional management of a
bureaucratized and differentiated social system. Despite Rostows observations
on these points, critics ofthe World Bank and the IMF see Bretton Woods
institutions as fixated on ambitious, economic buccaneering at any human cost.
Lastly Rostow referred to the rise ofopponents to the human costs of
industrialization such as the muckrakers, Continental social democrats, John
Stuart Mill, and Marx, as a symptom of"the society... becom[ing] a little bored
with the miracle ofindustrialization.t" In keeping with the position of many of
today's globalization advocates, it seems that Rostows position on the question of
whether or not any human costs ofindustrialization are worth it is that said costs
are inevitable, and it is pointless to question them.
48
Once an economybecamemature, Rostow believed that the socie
haveto makechoicesamong three ends to which the mature economyco
put: (I) the national pursuit of power and influence with other territories;
developmentof a welfarestate to achieve human and social objectives tha
free-market processdid not; and (3) the expansion of consumptionbeyon
food, shelter, and clothing. Historically, different societies havestruck a b
between these three ends in different ways, but it is attention to these end
rather than to problems ofsupplyand demand or production - that chara
the final stage of economicstability.
3.6
Conclusion
Boiled down to their most essential distinguishingcharacteristics
Rostows five stages ofeconomicgrowth can be summarizedas follows. T
stage, that of the traditional society, is heavily dependent on agriculture. S
in the second stage, that of pre-condition for rake-off, increasetheir techn
investments and push to modernizeusually beginningwith their natural r
sectors. Societies in the third stage, that of rake-off, develop at leastone
substantial manufacturing sector alongwith an infrastruetural framewor
hastens and sustains the take-off. A mobilized entrepreneurialclassis also
necessity. Becausethere are manyinfrastruetural and culturalrequiremen
successful take-off, this stage takes the longest to realize. Societiesin the f
resources and differentiate acrosssectors. Looking at the historyof industrial
societies in the fourth stage, Rosrow concluded that the transitionfrom stage
three to stage four is approximately 60 years. This stage is alsocharacterized by
. unionization and the riseofeconomicmanagement. Societies in the fifth stage, the
age of high massconsumption, rum their attention awayfromproblemsof
production and demand and toward choices amongends to which the mature
economy could be put: the pursuit of power, the development of a welfare state, or
the expansion of consumptionbeyondbasic needs.
A numberof things are notableabout Rostovian developmenttheoryand
how it has been put into practice by the Bretton Woods institutions. The first is
that Bretton Woods followed Rostow's recipe foreconomicdevelopment only
selectively - on some points, hisobservations were not heeded at all. In violation
of Rostovian development theory, investmentin local educational infrastructures
(to grow local talent) has focused at the primary educationlevel. Though it is
important to increase literacy levels in developing societies, it is also important to
provide knowledge opportunitiesfor the best and brightest once primary
education is completed.
Bretton Woods mayalso rely too muchon foreign capitalfor detonating
take-off. This observation is based upon the fact that, while the World Bank lacks
special organizations for educational infrastructure, it has three for international
investors.
50
governments to playan important rolein the developmentprocess - namel
the purposes of infrastructuralinvestment, education, and responsiveness t
populace during painfultransition periods. Rostow believed that a system
governance resemblingdemocracy would be important for successful econ
development to occur - a condition that Bretton Woods turned a blind eye
during the Cold War. Rostow noted in the closingof his book,
[Sjocieties must do more than have a creed. They must solve their
problems.... If'we and our children are to live in a setting where
something like the democratic creed is the basis oforganization for most
societies... the problems of the transition from traditional to modem
status in Asia, the Middle East, and Africa - the problems posed by the
creation ofthe preconditions and the take-off - must be solved by means
which leave open the possibility of such a humane, balanced evolution.v
It is precisely on this note where developmentefforts during the lat
of the zo" centurywent terriblywrong. During the Cold War, industrializ
nations paid little attention to the governancestructure of developingecon
Within the World Bank, concerns with "clean governance" developedonly
recently. Ignoring this component of successful take-offset developmentef
back for a number of reasons: societieswere not ripe for providingopportu
of upward mobility, and elites hoarded resourcesfor themselves instead of
investingin primarygrowth sectors.
Rostow could not haveforeseen the manywaysin which internatio
economicdevelopmentwould be done wrong when he first published his t
in 1960. He was unabashedly optimistic about the effortsof industrialized
far to say, 'The willingness of the governments of industrialized nations to
contemplateenlargedsoft loansand grants constitutes... a potential compensation
for the diversionary and disruptiveconsequences of the Cold War.")0
Unfortunately the disruptive consequences of the Cold War were great and
reverberate to this day. Additionally eventhe willingness of donor countriesto
contemplateaid haswaxed and waned, and oftentimes their donations havebeen
tied to their own interests. As will be seen in the Global EnvironmentFacility case
study,the tension betweendonor countryand developing countryinterests
continue.
What this allmeansfor the World Bank is that during the Lost Decade of
Development, its development practiceswent astray - much further awayfrom a
Rostovian development perspective. Institutionally it also resembles an entity that
is built morefor the protection of investors and donors than for the interestsof
developing economies. Yet evenifthe Bank did follow the Rostovian
development framework more closely, Rostow clearly viewedthe environmentas
a resource base and not as a preciousresource in and of itself. With such a
perspective, it is no mystery why rainforest would be clearedto makewayfor
ranchesor freeways.
Poor environmental managementcan bear seriousconsequences
particularly where biodiversity is concerned. Thankfully the World Bank
instituted the Global Environment Facility in 1990 as a funding mechanism for
biodiversity and specific habitats upon which manyunique life forms d
become more widelyrecognized as important. The reasonswhy are dis
the next chapter.
Environmental problemsthat are characterized bythe irrevocable lossof
genetic and biological diversity (e.g.species extinctions) are urgent to address for
manyreasons. First, there are existential losses that cannot be redeemed when
species are extinguished. Second, knowledge of the naturalworld and our placein
it is alsocompromised. Third, ecological services - such as climate modulation
and water purification - riskdestabilization with the lossof biodiversity. Fourth,
potentially lucrative medicinal and agricultural goods could be lost as well.
Biodiversity is the variety ofliving things in the world, includingthe
variety of ecosystems in which those things live." The global pattern of the world's
biodiversity is such that as one approaches the equator, the gradient of species
diversity increases, and these geographicareasare comprisedprimarily of
developing counnies. As E.O. Wilson notes,
So immense are the insect faunas alone in [tropical rainforests]...
overwhelming even the opulence ofthe coral reefs, that on this basis
alone it is reasonable to suppose that over half of all species are found
there.?'
Some areas not onlyhold great concentrations ofendemicspecies - which means
that these speciescan be found nowhereelseon earth - but these areas are also
under extremethreat of destruction. Such places are known as "hotspots" and
were labeled as such by Norman Meyers in 1988.93 Though collectively the hottest
spots occupyonly2.3%of the planet's land surface, theyalone are the exclusive
homeof over 50% of identified plant species and 42% of terresnial vertebrates." As
willbe shown in Chapter5: Links Between Biodiversity Hot Spots and
54
poorest economies.
Environmental scientistshavetried to explain why habitat des
humans occurs.There are two mainschoolsof thought on the issue: n
Malthusianism, which is based upon the demographicviewpoints ofT
Malthus, and neo-Marxianism, which is based upon the economicret
Malthusianism penned by Prussian economistKarl Marx. In short, n
Malthusiansbelieve that environmental tragedies are the resultsof a n
process that must be managed,where human populationsexpand un
outstrip their resourcebase. Neo-Marxians, on the other hand, believ
environmental destruction and overpopulation are symptomatic of po
structural injustices in society as opposed to being inherent impactso
population growth. Both viewpoints, and the scientific ideaswhich u
them, such as differentpopulation models, pronatalist and birth redu
pressures, and the IPAT identity, are explored in section +2, Neo-M
and Neo-Marxian Views on the Mechanisms ofEnvironmental Destr
researchquestion of this thesis- whether institutional changesat the
could slow or eventually stop destruction of biodiversity hotspots - is
in nature, since it assumesthat the human factors behind developmen
just as important as, if not more important than, human fertility.
The two most significant driversin modern extinctions are habitat
. destruction and the introduction of non-native or exoticspecies."Yet another
driver maysoon be climatechange." In anycase,both habitat destruction and the
infiltration ofexoticspecies can be tied directly to developmentefforts, sinceit is
not uncommonforvirginland to be converted for infrastructure projectsor
agriculture (and with agriculturecomes non-native, domesticatedspeciesidealfor
export). Even if such projectsare not the direct resultsof internationally
sanctionedprograms, theyare the indirect resultsof globalmarket forces.
Though it is difficult to know exacdy how many species are lost (or are in
danger of being lost), estimatesfrom biologists, taxonomists, and ecologists place
us on the vergeof another waveof massextinction. Mass extinctionshave been
documented five timesthrough the geologicrecord - the last ofwhich was the
massextinction that markedthe end of the dinosaurs. Back then at the end of the
Cretaceous Period, it was estimated that halfof allspecieswent extinct.What is
so different about the current waveofextinction is that its strongest driversare
clearly related to the activities ofone species - homo sapiens. If present trends of
environmental mismanagement continue,it is estimated that one-third to two
thirds of allspecieswillbe extinct,"
It would seem that this revelation aloneshould be enough to sound a
worldwide alarm. What complicates matters is that the importanceof threatened
and extinctspeciesaren't realized until their populations are in dire straits or are
56
species have been identified, but 10 to
100 million
species are thought to e
Under these odds, it does not seem improbable that we lose many species
they are discovered.
Additionally though the loss of species is startlingly rapid, it also o
imperceptibly. This paradox occurs because people are rarely cataloging,
monitoring, the ecological effects ofland use decisions.'?' When people do
changes in the distribution of species, it is because they are already gone. W
explains,
Extinction is the most obscure and local ofall biological processes. We
don't see the last butterfly of its species snatched from the air by a bird o
the last orchid of a certain kind killed by the collapse of its supporting
tree.... We hear that a certain animal or plant is on the edge, perhaps
already gone. We return to the last known locality to search, and when n
individuals are encountered there year after year we pronounce the
species extinct.... In order to know that a given species is truly extinct,
you have to know it well .... You have to look long and hard without
result . But we do not know the vast majority ofspecies oforganisms we
we have yet to anoint so many as 90%ofthem with scientific names. !OJ
4.1.1
The Benefits at Stake
Though extinction is a natural process, as noted above, the rates a
species are currently disappearing have dramatically increased. The signif
biodiversity loss is also at times disputed, since the species that matter mo
- those that are farmed and/or used for landscaping - are in no danger of
becoming extinct because of their proprietary value. How could the extin
wild, noncommercial species impact humanity if at all?
how they are interdependent. There are three types ofbiodiversity: ecological,
special, and genetic. Ecological diversity refers to the richness and complexity of a
biological community, including the ability of that ecosystem to recycle materials
within its system. Special diversity describes the number ofdifferent types of
organisms within communities and ecosystems. Often the robustness of an
ecosystem depends on its special diversity, so special diversity is important to
maintain to keep ecological diversity optimal. Finally genetic diversity refers to the
variety of different versions ofthe same genes within a species. Stable populations
of species - those that are free from birth defects and are resistant to disease
depend on genetic diversity,'?'
Ecological and special diversity play significant roles in the sustenance and
advancement of human society; however, these two types of diversity are
dependent on genetic diversity. Thus entire populations of individual organisms
must be protected to ensure adequate genetic diversity making for both healthy
species and the preservation ofecological diversity.
4-1.1.1
Benefit 1: Ecological Services
Ecological biodiversity is what guarantees mundane, yet essential, services
that we take for granted. Some examples of ecological services include provisions
(breathable air, topsoil, pollination, seed dispersal, cycling of nutrients, and a
habitable climate), detoxification (including decomposition ofwastes and
58
radiation, from erosion, and from the vast majority of disease-causing age
potential agricultural pests)."? In conservative estimates, attempts at acco
for the value of ecological services places their total value at $33 trillion pe
(more than double total world gross national product, or GNP).ro4
The aforementioned dollar value of ecological services helps one s
expensive it would be to find technological substitutes for the services na
provides "free of charge" to the market system. This alone is sufficient rea
properly steward ecological diversity. Nevertheless it is also worth noting
relying on technology to bail humanity out ofsituations where one or seve
ecological services collapse is precarious; most cannot be replaced. A telli
example comes from Biosphere 2, a $200 million project launched in 1991
aimed to test whether or not an entirely man-made, closed system could s
eight humans for two years. Eighteen months into the test, oxygen levels
atmosphere dropped from 21% (normal levels) to 4% (oxygen levels below
could lead to death), while carbon and nitrous oxide levels skyrocketed.
Pollinators also went extinct, which would have dramatically reduced agr
capabilities over the long term. Geoffrey Heal noted,
[1]n spite ofgreat expense and the use of the most sophisticated
technologies, the designers of Biosphere 2 were unable to ... replicate
some ofthe most basic and essential services that natural ecosystems
proVlide ...."105
It is for these reasons that ecological biodiversity must be preserved to ke
ecological services properly functioning.
Species diversity is what gives us much ofour medicine and provides other
health-related benefits. Over 40% of pharmaceuticals are organism-derived rather
than synthetic,'?' and the United Nations Development Programme estimates
that pharmaceuticals derived from plants, microbes, and animals living in the
global South are worth over $30 billion per year,"? Some examples of organism
derived medicines include aspirin, numerous anticancer treatments, the
antidepressant glaziovine, caffeine, codeine, the contraceptive diosgenin,
ergonovine for migraines, menthol, morphine, the Parkinson's disease suppressant
L-Dopa, and penicillin. " Such useful compounds are not simply found by chance;
they are naturally engineered,"? By learning about different species and observing
what roles they play in nature, we can find ways to use their traits. The uses of
leeches to control bleeding in surgery, and the isolation of chemical compounds
from their saliva to treat hemorrhoids, rheumatism, thrombosis, and contusions
serve as perfect examples.
Surprisingly, known medicines represent only a small fraction ofwhat may
be available. As an example, fewer than three percent offlowering plants in the
world have been researched for medical application." Though pharmaceutical
companies are now making more concerted efforts to prospect tropical countries
for useful chemical and genetic discoveries, this does not come without its own set
ofcomplications." With estimates of extinction rates as high as 27species lost per
dey;" even modem bio-prospecting becomes a race against time.
60
-
--::- . . . . . : = = - - - -
diversity also protects us from up to 95% of potentialpests and disease-ear
organisms." Natural predators and species-ro-species competitionkeep m
disease-vector populations in check. A real-world example of how extinct
giverise to outbreaks occurredwith Lymedisease. When passengerpige
inhabited North America, theycompeted with mice and deer for acorns.
Interspeciescompetition kept both the mousepopulation in checkand th
from frequenting the samefood sourcesas the disease-earrying mice. Onc
bird was gone, mousepopulations exploded. Both miceand deer began
frequenting the same areas foracorns, and diseasetransferred much more
between miceand deer. As a result,Lymediseasecould be moreeasily tra
to humans."
In short, speciesdiversity is important to preservefor two majorh
related benefits. First, individual speciesmaybe medicinally valuable to h
and second, speciescan playspecial roles in maintaining public health. Si
speciesis a component of a larger ecosystem, these points serve as additio
reasonsfor preservingecological biodiversity to benefithumanity.
4.I.l.]
Benefit]: Food
As is the casewith medicines, the gastronomicpotential of biodiv
woefully underutilized. Though it is obvious that allof our food comesfro
organisms,less thought maybe givento the fact that only 20 speciesprov
species, and only 7,000 are knownto have been cultivated by someone,
somewhere, at somepoint in time." Nevertheless the curiousdearth of variety in
the globaldiet is due primarily to tradition and history. Consider amaranth,which
is now makingan entrance in the US market 500 years after its widespread use by
the Aztecs. Had it not been banned by Spanishconquistadorsfor religious
reasons during the I()rlt century,"? perhaps it would be as popular as com. Wilson
points out, "The old waysof using the land, chained to marketshanded down by
the traditions ofconquistadors and the vagaries offoreign markets, extract only a
small portion of the wealthwhilediscardingthe rest.?" From this perspective, a
multitudeof species with no current commercial valuecould be quite valuable
we simply havenot yet realized their potential.
4.1.1.4
Beneiitq: Cultural Value
Particular species maybe valuedfor their symbolism (such the bald eagle
in the US), their spiritual status (eagles among Native American tribes?"), or even
simply for their existence. Existence value refers to the satisfaction one gains from
knowingthat a particularspecies has not becomeextinct,evenifone neversees
the speciesin real life.
Often such charismatic species sit at the top of their respective food chains,
so their protection requiresthe protection of their habitats. N atural ecosystems
are alsoquite valuable in and of themselves, as the annualeconomicvalue of
62
Service estimates that Americans spend $104 billion eachyearon wildl
recreation,which is more than the $81 billion estimatedto be spent eac
new automobiles.?"At the end of the zo" century, tourism becamethe
most important source ofoutside incomefor Costa Rica, ahead of ban
catching up to coffee. Similarly, ecotourismwas the third most import
of incomefor Rwanda - closing in on coffee and tea." Wilson notes,
More and more people from developed countries are willing to pay t
experience, however briefly, the prehuman earth .... Rain forests used
the purpose have become many times more profitable per hectare tha
land cleared for pastures and fields. I I I
Wilson goes so far as to argue that humanssubconsciously seek
connectionswith the rest of nonhumanlife."? He terms this phenomen
biopbilie and cites the human propensityfor natural phobias; our hard
responses to and cultural associations with snakes; our desirefor beaut
landscaping; and the draw to zoos and aquariums(whichin North Am
outpaces the draw to allprofessional athleticeventscombined),to vist
beachesas evidence. Wilson concludes,
Signals abound that the loss oflife's diversity endangers not just the b
but the spirit. If that much is true, the changes occurring now will vis
harm on all generations to come.... We should judge every scrap of
biodiversity as priceless while we learn to use it and come to underst
what it means to humanity.... An enduring environmental ethic will a
to preserve not only the health and freedom ofour species, but access
the world in which the human spirit was born.?"
of Environmental Destruction
Whether or not Wilson is correct about biophilia, the most recent
acceleration in biodiversity lossis certainly connected to human activities. What is
it about the waythat humansinteract with their environments that leads to so
muchdestruction> Is species lossinevitable for humansurvival? Foraging,
agriculture, fishing, hunting, and energyuse are inevitable activities that humans
do for survival. Depending on the society, commerce would alsobe added to the
aforementioned list.Why is it that some human societies have denuded their
forests, polluted their water- and airways, and allowed their populations to suffer?
In what ways do humanfactors- psychosocial, demographic,and sociopolitical
influence environmental destruction?
Though psychosocial factorssuch as personaland culturalvalues or
religious beliefs playlikely rolesin how humans interactwith their environments,
these are not a central focus of this thesis. Instead more attention is paid to the
duelingviewpoints of neo-Malthusianism and neo-Marxianism. These viewpoints
are consideredin detail for two reasons. First theyofferexplanatory models for the
interactionsbetweendemographics, economics, and environmental impacts.
Second, though Malthus and Marx coinedtheir theorieslong ago, these
perspectives influence both economic and environmental policy to this day
includingdecisions made by modem-day institutionslikethe World Bank.
64
Thomas Malthus published his paper, Essayon the Principle of
Population, in 1798. In it he argued against a number of prevailing theorie
day regarding population." He used a mathematical application regardin
unchecked population growth compared to what could be expected for
agricultural output. He showed that increases in agricultural yields would
arithmetic (linear) at best, while he expected population to increase geom
(exponentially). His conclusion was that any institutional efforts to increa
population, improve wages, or offer welfare would have the unpalatable e
giving rise to a population that could not be fed. 116
Malthus did not stop there, though, as his essay leads to a general
negative view on the demographic fate of humanity. He also concluded th
human populations have a natural tendency to outstrip food supply, givin
"misery,"and even if a society tried to control its own population, the inev
result would be "vice." Misery is described as war, famine, pestilence, or p
the case of a population that gets out of control. Vice entails "lengthy
postponement of marriage [that] would probably be associated with a rise
moral depravity and unnatural attachments" in the case of a population th
attempts to control Itself,"?
No one maintains now that Malthus was wholly correct in his ass
Aside from his many dubious assumptions regarding human nature." the
other factors he simply could not foresee. Technology and trade have grea
demographic transitions and reliable contraception havestabilizedpopulations in
manyareas of the world."?
Yet there is somethingfamiliar about Malthus'warnings regarding
overpopulation. On a planet that holds oversixbillion humans (and counting)
with shrinkingdoubling times,elementsof his 18th century argument remain. In
ecology, allecosystems havea carryingcapacity- the maximum number of
individuals that can be supported bythe ecosystem's resources - for each species
living within.'30 Once a population shoots beyondits carryingcapacity, diebacks
are inevitable. Could Earth be approaching its carryingcapacityfor humans, and
ifso, are we bound for famine, pestilence, plague, and/or resourcewars?Are
human-induced massextinctionsjust something that happens along the way?
People who believe that the answer to those questions, in some form,is yes
are known as neo-Malthusians, At the heart of neo-Malrhusianism is a beliefthat
human overpopulation givesriseto overcrowding, sprawl, pollution, disease,
resourcedepletion, starvation,poverty, crime, misery - evenwar." In countries
where the aforementioned problemsare verymucha reality, ballooning
populations are considered an undeniableculprit.Thus neo-Malthusians believe
that the most essentialcomponent of anystrategyfor globalenvironmental
stewardship must contain efforts to control humanpopulation and its rate of
growth.
66
aid should be provided to those living now, and for the future, developing
countries should launch effective family planning programs. The World B
not yet dabbled in matters like family planning, but it does collect data on
literacy rates ofgirls and other information, which reflects an institutional
in social factors linked to population trends. Nevertheless in the social just
environmental quality debate, there are still neo-Malthusians that practica
Malthus:
Each rich nation amounts to a lifeboat full ofcomparatively rich people.
The poor of the world are in other much more crowded lifeboats .... [Tjh
poor fall out of their lifeboats and swim for a while, hoping to be
admitted to a rich lifeboat, or in some other way to benefit from the
goodies on board .... We cannot risk the safety of all the passengers by
helping others in need. What happens ifyou share space in a lifeboat?
The boat is swamped and everyone drowns. Complete justice, complete
catastrophe. 132
4.2.2 Marxian and Neo-Marxian Views
In Volume One of Das Kspitsl; published in 1867,Marx took Mal
arguments head on. He argued that Malthus was wrong on both fronts of
pronged population argument. He first disagreed that humans were subje
same abstract population laws thought to exist for animals. He also believ
science and technology would soon be applied to agriculture, dramatically
improving crop yields. 133
On the point ofpopulation growth, Marx advanced, "[E]very speci
historic mode ofproduction has its own special laws ofpopulation, histori
valid within its limits alone. "I34 He argued that in the crowded slums of 19t
absolute terms.What was beingobservedwas the creationof a surplus labor
population that could not be absorbed into the labor market. Marx believed that
the creationof this redundant, poor populationwas a necessary conditionfor, and
an inevitable result of, the capitalistmodeof production.135Thus Marx argued
that the specter of a Malthusianpopulationcrashwas both illusory and
misguided.
Though Marx: did not outline an alternative population model to Malthus'
exponential model,an alternative population model does exist. Though Malthus'
model ofexponential growth intuitively makes sense, there is another ecological
modelthat might better describe humanpopulationdynamics - the logisticmodel
of populationgrowth developed by mathematician Pierre FrancoisVerhulstin
1838.136 Under the logistic model,populationsapproach carryingcapacity but
neverreachit. As the population approachescarrying capacity, reproduction
slowspace, and the populationlevels off. This typeof populationgrowth pattern
is common for K-adapted species, which ecologists consider humans to be.l37
Returning specifically to Marx'sresponses to Malthus, Marx had the
foresight to predict the application of science and technology to agricultureto
increase crop yields. Marx wrote,
In the sphere of agriculture, modern industry... annihilates the peasant...
and replaces him by the wage labourer. Thus the desire for social
changes... [is] brought to the same level in the country as in the towns.
The irrational, old fashioned methods ofagriculture are replaced by
scientific ones. 138
68
agricultural output sufficiently to satisfy any demand by an expanding pop
Though Marx was right about the Green Revolution, his claims a
byproducrs of capitalist modes of production continue to be controversial,
not the intent of this thesis to explore Marxian critiques of capitalism in de
However opposite the Malthusian view, where the human drive to reprod
creates more people than resources - ultimately leading to poverty and oth
Marx argues that social factors which createpovenygive rise to overcrow
slums, starvation, disease, misery, and violence.w This subtle distinction i
role of povertyes the driver for multiple humanitarian and environmental
entirely lost on the World Bank, since the phrase, "a world free ofpoverty"
been part of its mission statement since 1998.What has been lost, howeve
genuine effort by Bretton Woods institutions to alleviate poor social cond
developing countries while they undergo economic transitions. Under IM
structural adjustment, domestic government programs designed to soften
blows of economic transition were actually dismantled.
4.2.3 Neo-Malthusian and Neo-Marxian Views in Contrast
Neo-Marxian environmentalists have taken their cues from Marx's
writings, though Marx, perhaps, would not agree with elements of the ne
Marxian agenda himself.r" Nevertheless neo-Marxian environmentalists a
unlike neo-Malthusians who believe that population control is paramount
(a)). Neo-Marxians instead argue that under unjust, dire social condition
(b)), people are pushed into a desperate mindset to obtain resources by an
and hence bear more children - since more children often means more on
free labor; another potential breadwinner; and/or increased insurance for
during old age.
Two models lend support to the neo-Marxian view over the neo
Malthusian. First demographers have noted that pronatalist and birth re
pressures do exist, as shown in Table 1.14 1 Note that these pressures are cl
linked to social justice issues such as distribution of wealth and reproduct
rights. Societies characterized by poverty and a lack of reproductive right
strong pronatalist pressures, while societies characterized by greater wea
reproductive rights have lower birth rates.
Though the World Bank does not design or support social progr
agnostic position on pronatalist social conditions may not help developin
economies escape the demographic trap. For example, funding infrastrue
projects and mining companies in a country where female literacy remain
may put the cart before the horse, since social conditions encouraging lar
families remain. Under such a situation, per capita gains in wealth that m
due to the World Bank's investment remain modest, since the country's
population continues to grow.
• No/weak social security system
• High infant mortality rate
• little opportunityfor upward
mobility (children are sourceof
status, sense of purpose)
• Additionalsourceof income
• Additionalsourceoflabor (agrarian
communities)
• High death rate
• Cultural/religious values that
encouragechildbearing
• Cultural values that hold children of
one gender in higher esteem (parents
mayhave more childrenthan they
desire to produce a childof the "right"
gender)
• Lack of reproductive rights (women
are unable to decide how many
children theywould like to have)
• Social security system
• Low infant mortality rate
• Opportunities for upward mobility
especially for women
• Women have access to alternatives to
childrearing(education, professional
opportunities, etc.)
• Women are ableto makesubstantial
contributions to household income
• Low death rate
• Women havethe option to limit
childbearing
Table I. Pronatalist and birth reduction pressures. Pronatalist pressures
increase people's desires to have children, while birth reduction pressures discourage
them. As economies improve, birth reduction pressures gradually give rise to
demographic transition.
Second, from the perspective of environmental impact, the IPAT identity,
a succinctmodeldeveloped by researchers who alsoconducted The Limits tv
Growth study at MIT, shows that populationgrowth alone cannot be considered
the most significant driverofenvironmental degradation.The identityis given by
I =PxAx T,
where I is environmental impact, P is populationsize,A is a measureof affluence
(typically material throughput or capitalstock per capita),and T represents the
environmental impact of technology(typically measuredas the environmental
72
Foster notes,
The equation shows that environmental degradation is not the result of
increased population, or increased accumulation, or the introduction of
less environmentally benign technology. It is a product of all three.... In
contemporary discourse, environmental problems are most often blame
on Population growth (P), even though levels of Affluence (A) and
Technology (T) almost always playa role. Affluence * Technology (AT)
is shorthand for the socioeconomic (as opposed to the demographic)
causes ofenvironmental degradation, and together they far outweigh th
impact of Palone. '43
The IPAT identity remains controversial becauseit insinuates tha
technologically advanced societies with relatively small populations (such
United States) can do just as much environmental damage as poor,
technologically backwardeconomies with manypeople. It alsosuggests t
significantly increasingthe wealth and technology use of developing, pop
nations could spellenvironmental disaster - particularly if demographict
is a long wayoffor neveroccurs.'"
For the context of this thesis,the important thing to understand a
IPAT identityis that the habitat destruction and its relatedimpacts on
biodiversity discussedin Chapter5: Links Between Biodiversity Hot Sp
International Developmentare not due to population dynamics alone. An
environmental impact such as biodiversity loss,especially in developing n
due to the confluence ofcontinuing disparitiesin income,high rates of po
growth, and the application of more sophisticatedtechnology to hitherto
undeveloped regions.
though the science behind it is compelling, solving the poverty-population
problem to better preserve biodiversity is not easy. Indeed decades of effortand
billions of dollars to developingcountriesfrom international development
agencies and rich governments alike has not completely solved the poverty
populationissue,and in some cases, Bretton Woods' development practices have
been seen as the enemyof the verypeople and places that it aimsto improve. This
was particularly casefor countrieswhere structural adjustment programs - which
rolledbackgovemmental programs of all typesfrom social securityto healthcare
- were mandated by the IMF and endorsed by the World Bank.
4.3 Conclusion
At the start of the zr" century, we are observingrates of extinction so rapid
that ecologists believe we are in the midst of a human-induced massextinction.
The two most significant driversof species lossare habitat destruction and the
introduction of exoticspecies- twO drivers that can easily be linkedto human
activities of land conversion. Paradoxically species loss has been both quick and
imperceptible. This makes responding to the problem in an effective manner
challenging.
Some peoplebelieve that preserving spacefor endangered speciesshould
be enough; however, to maintain healthy communities of a species, entire habitats
must also be maintained. In biodiversity hotspots, multiple speciesare in danger,
74
Additionallypreserving ecosystems is important for the stabilizationof ecolog
services and medicinal resources necessary for human survival. Other benefits
biodiversityinclude nutritional and cultural resources.
It is often assumed that population pressures alone are what lead to
habitat destruction and the introduction of exoticspeciesas human populatio
moveinto virgin territory.This is a neo-Malthusian view of the problem. But
view is incomplete, as human population growth responds to other social
constraints such as the presence of a socialwelfaresystem, mortalityrates, an
opportunities for upward mobility. Because the absence of these stabilizing, s
factors act as pronatalist pressures, a discussionof environmentalprotection
cannot be had without a discussionof socialjustice and culture, and such a
discussionwill not occur outside of a neo-Marxian perspective.
As has been documented over the previouschapters, within the World
Bank, concern for the environment has developedonly recently. Though the
appears to be agnostic over the neo-Malthusian and neo-Marxian perspective
environmentalimpacts, approaching economic developmentas if it exists
independent of demography and the environment is wrongheaded. Unfortun
this is exactly what Rostovian developmenttheorydoes, and it is Rostovian t
that guides the Bank. To further investigatewhy the neo-Marxian perspectiv
offers an appropriate framefor the problem of biodiversity loss,the linksbetw
loss of biodiversityand economicpovertyare explored in the next chapter.
Development
As was mentioned in Chapter4: ImpactsandMechanisms ofAccelerated
BiodiversityLoss, areas that both hold great concentrations of endemic species
which means that these speciescan be found nowhere elseon earth - and are
under extreme threat of destruction are known as biodiversity "hotspots." Though
collectively the hottest spots occupyonly 2.3%of the planet'sland surface,they
alone are the exclusive home of over 50%of identified plant speciesand 42%of
terrestrial vertebrates."
The two most significantdriversin modern extinctions are habitat
destruction and the introduction ofexotic species.:" Yet another driver maysoon
be climate change.'? In any case, habitat destruction and the infiltrationof exotic
species can be tied directlyto developmentefforts, since it is not uncommon for
virgin land to be convertedfor infrastructure projects or agriculture (and with
agriculture comes non-native, domesticated speciesidealfor export). Even if such
projects are not the direct resultsof internationally sanctioned programs, they are
the indirect results of global market forces. As will be shown, there is a statistically
significantrelationship between whether a territory houses at least one
biodiversity hotspot and economicpoverty.
76
A seminalpaper published in 1988 by biologist Norman Myersfir
identifiedten tropical forest "hotspots" characterized both by exceptionall
levels of plant endemism and by serious levels of habitat loss. In 1990 My
eight more hotspots, includingfour Mediterranean-typeecosystems.
Conservation International, a non-profitnon-governmental organization
adopted Myers'hotspots as its institutional blueprint in 1989, and in 1996
organization reassessed the hotspots concept includingan examinationo
whether or not key areas had been overlooked. An extensive global review
undertaken in 1999, which introduced quantitative thresholds for the des
of biodiversityhotspots. To qualify as a hotspot, a region must meet two
criteria: It must contain at least 1,500 speciesof vascularplants (plants wi
leaves, stems, and roots) as endemics (1,500 speciesis greater than 0.5% o
world's total), and it has to havelost at least 70%of its original habitat.
From the 1999 analysis, 25 biodiversity hotspots were identified.
Collectively these areas held, as endemics, no lessthan 44%of the world's
and 35%of terrestrial vertebrates in an area that once coveredonly 11.8% o
planet's land surface. The habitat of this land area had been reduced by 87
its original size - decreasing the wealth of this biodiversity to only1.4%of
land surface.
The latest reanalysis of biodiversity hotspots was completed in ea
Over the past sixyears, the number of biodiversity hotspots has grown to
of the hotspots' habitats have already been destroyed. Thus, intact remnants now
coveronly 2.3%of the planet's land surface. Over 50% of identified plant species
and 42%of identifiedterrestrialvertebratesresidein these hotspots.
Despite the nominal land area of hotspots, as can be seen in Figure 5,'49
theycovera much larger area goo-politically. No fewer than 129 nations and
territories house hotspots, and hotspots can be found acrossthe globewithin
diverse countriesand economies. N evertheless the vast majority of hotspots are
foundwithin lower-income, indebted states.This will be shown by catalogingthe
territories in which hotspots are housed and comparingthe catalogto the World
Bank's official incomeand debt classifications forworld economies.
78
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Conservatio n International
February 2005
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areas denote biodiversity hotspots. D ifferences in coloring correspo nd to different ecosystems.
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and Indebtedness Classifications
As the world's foremost multilateral development agency, the W
defines both the income and debt classifications of world economies. Th
Bank income and debt classificarions'rwere consulted to identify which
are "poorest," both in terms of gross national income (GNI) and debt b
These income and debt classifications were then compared to a catalog
Conservation International's mapping ofbiodiversity hotspots to ascert
validity of the second argument ofthe research hypothesis: that biodive
are pronounced in least developed economies, so much so that there is a
between these losses and the business of how international developmen
practiced.
5.2.1
Distribution of Hotspots by Per Capita Annual Inco
According to the World Bank's April 2005 classifications, incom
delineations are as shown in Table 2. The Bank's analytical income clas
Income Classification
Per Capita Annual Income
Low
<U5$765
Lower-Middle
U5$766 < x < U5$3035
Upper-Middle
U5$3036 < x < U5$9385
High
> U5$9386
Table
2.
World Bank income classifications for world economies
2005.
Income classifications are based on annual per capita income in US do
works preferences, typesofloan eligibility, etc.). GNI, a broad measure of gross
domesticproduct (GDP) plus the net flows offaetor income(such as rents,
profits, and labor income) from abroad, was consideredthe best singleindicator
ofeconomic capacity and progress; therefore, GNI per capita is the Bank's main
criterionfor classifying countries.
The term "developing economies" is often used in generaldiscussions in
Bank: reports. It denotes the set of both low- and middle-income economies. Bank
publications with notes on the classification of economies state that the term
"developing economies...does not imply either that all the economies belongingto
the group are actually in the processof developing, nor that those not in the group
have necessarily reachedsomepreferredor final stage ofdevelopment. "lSI Thus any
economy that cannot be classified as high incomeis considered"developing." This
is why in the "Cumulative Percentage of Hotspot Economies" columnofTable 3,
low-, lower-middle-, and upper-middle-income economies can together be referred
to as "developing" economies.
When a catalogof the territoriescontainingbiodiversity hotspots is
compared to the economies' incomeclassifications, the hypothesis that
biodiversity losses are significantly pronounced in leastdevelopedeconomies is
supported (Pearson chi-square, df = 3, a for test < 0.005). Though only38%(still
the largestsegment)of all economies housinghotspots fit the Banks
classifications for poorest economies, relatively poor economies (low-income and
82
developing economies is also considered, a whopping 84%of hotspot econ
are accounted." Clearly an undeniable, statistically significant relationship
between lack of prosperity and habitat destruction. These facts lend suppo
neo-Marxian view of the biodiversity loss problem.
Income
Classification
Percentage of
Hotspot Economies
Cumulative Percentag
of Hotspot Economie
Low
38%
Poorest: 38%
Lower-Middle
33%
Relatively Poor: 71%
U pper-Middle
13%
"Developing": 84%
High
14%
Not Applicable
2%
Table 3. World Bank income classifications and hotspots status. Th
column shows the share of hotspot economies that fall in each income category. T
column at right shows the cumulative percentage ofhotspot economies included
each income classification. Low-income economies are the poorest, while relativ
economies include low and lower-middle income economies. "Developing" econo
include all economies that do not have a "High" income classification.
5.2.2 Distribution of Hotspots by Indebtedness
The World Bank determines debt classifications for many ofits m
countries, but a fair share are not classified. High-income economies do n
debt classifications, nor do countries for which indebtedness data is unava
For economies that are classified, the Bank primarily groups them accord
one oftwo key ratios - either the ratio ofpresent value ofdebt service to G
determined through data reported directly to the Bank via the Debtor Reporting
System (DRS). The Bank's 2005 indebtedness classifications for DRS economies
are shown below in Table 4.
Indebtedness DRS Key Ratio
Classification
I
DRS Key Ratio 2
Severe
PVDS/GNI > 80%
PVDS/exports > 220%
Moderate
48% < PVDS/GNI < 80% 132% < PVDS/exports < 220%
LessIndebted
PVDS/GNI < 48 %
PVDS/exports < 132%
Table 4. World Bank Indebtedness Classifications for DRS Economies,
April 2005. These two key ratios are used to determine indebtedness classifications for
economies that participate in the Debtor Reporting System (D RS) . PVDS is the present
value of debt service, while GNI is gross national income. GNI is the gross domestic
product (GDP) plus the net flows offactor income (such as rents, profits, and labor
income) from abroad.
Some economies, however, do not report detailed debt statistics to the
DRS; thus present-value calculation is not possible. Instead four key ratios are
calculated, each of them averaged over the past three years (in this case averages
over 2001-2003): debt to GNI; debt to exports; debt service (DS) to exports; and
interest to exports. If any three of four key ratios match the benchmarks listed
below, economies are classified according to Table 5.
84
Indebtedness
Classification
Severe
Moderate
Less Indebted
Non-DRS
Key Ratio 1
Debt> 50%
GNI
Debt <50%
GNI
but >30%
Debt ~30%
GNI
Non-DRS
Key Ratio 2
Debt> 275%
Exports
Debt <275%
Exports
but> 165%
Debt ~ 165%
Exports
Non-DRS
Key Ratio ~
DS >30%
Exports
DS <30%
Exports
but> 18%
DS ~ 18%
Exports
Non-D
Key Ra
Interes
Export
Interes
Export
but>
Interes
Export
Table 5. World Bank Indebtedness Classifications for Non-DRS
Economies, April 2005. These four keyratios are used to determine indebte
classificationsfor economies that do not participate in the Debtor Reporting Sys
(D RS). DS is an abbreviation for debt service.
When a catalogof territoriescontainingbiodiversity hotspots is co
to economies' respective indebtedness classifications, the hypothesis that
biodiversity lossesare significantly pronounced in indebted economies is a
supported (Pearson chi-square, df =
I,
a for test < 0.005); however, the am
indebtedness has no statistically significant bearingon a territory's hotspo
(Pearson chi-square, df =
2, a
for test < 0.10). It is still noteworthythat th
majority of hotspot economies (78%) are classified as indebted. Only 30%o
economieshousing hotspots fit the Bank's classifications for severe indebt
but this segment remainsthe largest of all possibleclassifications. Modera
severely indebted economies combinedaccountfor 52%of hotspots as sho
Table 6.
Indebtedness
Classification
Percentage of
Hotspot Economies
Cumulative Percentage
of Hotspot Economies
Severe
30 %
Severely Indebted: 30%
Moderate
22%
Less Indebted
26%
Moderatelyto Severely
Indebted: ;2%
Classified as Indebted: 78%
Not Classified
22%
Table 6. World Bank Indebtedness Classifications and Hotspot
Economies. The middle column shows the share ofhotspot economies that fall in each
debt category. The column at right shows the cumulative percentage ofhotspot
economies included with each debt classification. Severely indebted economies have the
highest debt burden. Economies classified as indebted include all economies that do not
have a "Not Classified" debt classification.
There are limitations to the conclusions that can be drawn from
relationships between indebted tenitories and hotspot status, since WorId Bank
debt classifications are simply not performedon high-income economies.
Undoubtedly such economies fit somewherein these classifications, as eventhe
US has its share of nationaldebt. Additionally some economies that might very
wellbe severely indebted becomepart of the "Not Classified" category if
indebtedness data is not reported to the Bank There could be manyreasonswhy
an economy does not report debt information. For instancesome member
countriesdo not hold loanswith the Bank, so they haveno reason to share
indebtedness Information,
To complicatematters, it is unclearhow relevantthese indebtedness
categoriesare to the researchquestion in the firstplace,as these categorieswere
86
- - - =- ---
influence of debt on a state'ssocial or environmental health.
5.3
Conclusion
The relationships between biodiversity hotspots and economic
and indebtednesswere found to be statistically significant. Recall that b
losseswere most pronounced in leastdeveloped economies (Pearson ch
df = 3, a for test < 0.005) and most pronounced in indebted economies
chi-square, df =
I,
a for test < 0.005); however, the amount of indebted
no statistically significant relationship with hotspot status (Pearson ch
=
2,
a for test < 0.10). What this meansis that connections neo-Marxia
drawn between environmental impacts - in this case,biodiversity loss-
economicpovertyare not tenuous. Poor and indebted economies are in
likely to rapidly decapitalize their unique natural resources - unintentio
wiping out much of their biodiversity to meet foreign debts and raiseth
of living - just as E.O. Wilson suggested.Additionally, bearing in mind
historyof the World Bank: and the IMF, manyof the economies that ar
categorizedas indebted and developing havethe debt crisisof the 1970S
structural adjustment of the 1980s to thank: for their economicsituation
these reasons that the wayin which international developmenthas been
bears environmental impact on biodiversity loss.
population stress, sinceboth Malthus and Marx identified a closerelationship
between povertyand overpopulation. However an investigation of Figure 5 and
Figure 6'53 demonstrates that population stress aloneis insufficient for explaining
biodiversity loss. Only hotspots in central and southeast Asiaoverlapwith high
population density; allother hotspots beg for an explanatory mechanism.
With a neo-Malthusian explanation to the biodiversity problem shown to
be insufficient, and with the statistically significant relationships between
biodiversity hotspots and poor economic conditions demonstrated, a neo-Marxian
perspective on the biodiversity problem has been shown to be more relevant. Only
with such a perspective would one even begin to investigate how biodiversity loss
in less developed countries may be due to international development and how it
has been practiced. In the next chapter, one special program of the World Bank
specifically designed to guard against biodiversity loss will be considered as a
case study - the Global Environment Facility.
88
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--
~- - -
Global Environment Facility
As mentioned in chapter 2, the Bank's supporting role in SAPs gav
negative reputation among social and environmental professionals that the
instead hoped would be international development allies. Thus, throughou
late 1980s and 199os, as hot-button development issues changed from econ
stability to humanitarian and environmental impacts, the Bank underwent
dramatic bureaucratic transformations in an attempt to be more responsiv
charges of its critics. In its most recent program designs, client countries ar
given more of a say in plans for macroeconomic restructuring and in the
application ofWorld Bank funds for projects. However it remains to be se
World Bank policies aiming to preserve accountability, environmental qua
and social welfare actually "have teeth," or if other elements of the world ec
system undermine the Bank's best intentions. Bank policies as they relate t
ofbiodiversity in particular will be explored by looking at The Global
Environment Facility (GEF).
As a special office ofthe World Bank, the GEFwas created by a co
World Bank staff and Western European ministry officials in 1990 to finan
projects supportive of UN conventions on biological diversity and climate
change.f A global environmental finance fund of this type was not withou
precedent, since the Montreal Protocol, the UN agreement to curb the
managed Multilateral Fund.
However the GEF is quite different, for it is an interim financial
mechanism of the World Bank. Unlike the Multilateral Fund, which was
controlled by all signatories of the Montreal Protocol, the parties with the most
power over the GEF are the largest shareholders of the World Bank mentioned in
chapter 2 - the US, Japan, Germany, France, and Great Britaln.v Additionally
GEF funds are replenished every three to four years/56 so this gives the GEF the
opportunity to reflect on its progress toward its environmental goals and to
modify its operations. As a part of the fund renewal process, the G EF is subject to
numerous third-party evaluations as will be discussed.
The G EF is rather sizeable in comparison to other international
governmental funds available for environmental protection. For instance, the
United Nations Environmental Program (UNEP) had only a third of the GEFs
monies available for environmental projects in 2002.[57 Funds for sustainable
development, environmental protection, or environmental mitigation projects up
to $10 million can be
allocated within the Bank, but funds above that amount have
to be linked to other World Bank loans and referred to the Bank's governing
board, which meets once a year as described in chapter 2.113
As a trustee for the environment in the UN system, the UNEP sought to
plan priorities for the GEF. Writing from within the agency in 1997,Sheila
Aggarwal-Khan expressed the hope thatthe GEFwould be used less as an "add
90
loans for the "leastcost option"would be decided on the basis of''roral co
society." The optimism behind this hope was that the GEF could help so
global environmental problems by serving as an examplethat took accou
social and ecologicalcosts and benefits for reformingthe lending process
To make some account of socialand environmentalcosts for Wor
projects, the Program for Measuring the Incremental Costs for the Envir
(PRlNCE) was developed in the GEF Secretariat. This process employ
number of mainlyUK-educated experts and environmental economists to
nature's worth and calculatealgebraic formulaefor incremental costs ana
Some critics haveseen the work of these experts and economists as more
Bank's old habits - employingtechnocratic specialistsof the West to dict
economic priorities to poorer nations without regard to complex, human
on the ground.
On the question of representation, as has been characteristic for a
Bank program, the GEF attempts to strike a balance between its best int
and its image with donor countries." Thus, although it seeks the input o
environmental scientists and experts, it also defers to the desires and judg
representatives for industrialized nations. Similarly the GEFs efforts at
transparency and the incorporation of civil societyis also a double-edged
since NGOs make up a large share of"citizen" representation. However,
like corporations, NGOs are alsofunded privately by donors. In this sens
is in this waythat spaces granted to NGOs at the table for World Bank funding
decisionsmayunfornmately filter, marginalize, or - at worst - shut out local
democratic representationaltogether.This could be the casewhen a limited
number of stakeholdersare invited to participate in some decision-making
. process, and the spaces that would be available to local citizengroups are instead
snapped up byWashingron N Gas.
On its facethe GEF shows both promise and shortcomings. Its goals
"[to help] developingcountriesfund projects and programs that protect the global
environment... [supporting] projects relatedto biodiversity, climatechange,
internationalwaters, land degradation, the ozone layer, and persistent organic
pollutants't" - are laudableas are its aimsto better represent civil society in
funding decisions. Additionally it aims to modelfundingdecisionsthat could be
made with decisioncriteriathat extend beyondthe traditional balancesheet. Yet
the skewed representationof industrializedcountries,as well as the World Bank's
continued commitmentto the Rostovian modelfor internationaldevelopment,
pose challenges. As willbe discussed, voting power within the World Bank: has
always been bought, and when this decision-making structure was transferredto
the GEF, manystakeholdersremaineddisenfranchised. Additionally the
Rostoviandevelopmentmodelviews nature as a resourcefor economicends, and
not as a resourcein and of itself. Therefore environmental managementfor
conservation purposes remains elusive.
92
Evaluations completed by NGOs, academics, and partner organiza
including UNEP, UNDP (the UN Development Program), and the Wor
Bank during the G EFs pilot phase, showed the Facility to be falling short
number offronts. In the area of transparency, Caufield found "a consistent,
exaggeration, if not falsification ofthe amount of consultation and particip
with governments, NGOs and affected communities in the project docum
The official Independent Evaluation of the Pilot Phase (IEPP), conducted
consultants for UNEP, UNDP, and the World Bank concurred that recip
countries rarely had as much influence as official GEF documents suggeste
Evaluations also reported that the GEF fell short on integrity. Alex
of the Word Wildlife Fund (WWF) found more emphasis to be placed on s
project approval and implementation than on applying a clearly defined, pr
environment rationale for which projects should most usefully be funded, o
they should be funded.f David Reed, another WWF associate, concluded
the GEF sponsored projects "ofperipheral relevance to the central develop
issues that threaten the viability ofthe biosphere.T" As an example he cited
GEF-assisted biodiversity project in Vietnam that aimed to mitigate the
environmental impacts ofprevious development mistakes, while no appare
action was taken to prevent such problems in the first place. Fairman echo
GEFs early international waters projects focused on providing grants for e
pipe solutions to pollution - such as treating ship wastes in new port
IEPP concurred that the GEF was being treated as an add-on to normalWorld
Bank operations - which was precisely notwhat UNEP envisioned the GEF to
be.
At a seriesof meetingsspanningfrom December of 1992 through
December of 1993, delegates representinggovernmentsparticipating in the GEF
met to discuss replenishing GEF funds and the findings of the critical reviews.
One issuethat was particularly controversial was that of"efficient and
harmonious" decision-making. Part of whydecision-making remainedso
controversial was that the GEF maintainedthe decision structure of the Bank,
where voting power was determined by the number of shares a voter had. A GEF
background note for one of its participants meetings proclaimedthat "balancing
the plurality of interests implicitin universal participation,and the need to give
due weight to donors' funding efforts" would be Important."
Delegates from developing countrieswould havelikedto see a more
representative balanceof power in the GEFs decision-making body.They
advocatedfor the majorportion of the governingcouncil's seats (20 out of30 seats
to represent developingnations), for the right to elect a chairfor each meeting
from the representatives present, and for the GEFs work to be subject to the
authorityof a universal assembly of all government members. f
During the December 1993 meetingin Cartagena, G/7 governments
walkedout ofGEF negotiations.?" Their actual reasonsfor doing so are shrouded
94
Germans, were threatening to reduce their share of GEF funding if the
governancestructure was changed to the likingof developingcountries. L
French delegate, speakingon behalfof the Western European and Others
(WEOG) of governments at the time, offered a resolution acceptableto G
negotiators. Communications overnightwith the WEOG capitals reveale
the resolution was actually not acceptableto Western governments,so the
morning, the British delegation - whose tum it was to speak on behalfof
WEOG - retraeted the offer. G-Tl negotiators saw this as the last straw a
calledan end to the meeting in protest.
Somehow negotiationsgot back on track beforethe GEF pilot ph
set to expire. In March of 1994, the GEF was replenished with $2 billiona
restructured such that operations would be reviewed every three yearsby
Participants' Assembly that represented all member nations.The governi
councilwould be democratic, and the Secretariatwould be independent;
however, the GEF also retained a permanent co-chair, which would be th
Secretariat's CEO, and the World Bank would host the G EF administrat
and financially. The World Bank would also run most GEFprojects - tho
UNEP and UNDP would be considered equal implementingagencies.
Though allof the aforementioned political detailsare important, scientific
details, like how newdams might affect a local fishing industrydependent upon
the ecological services of a river ecosystem, are important too. To ensure that a
project is appropriately structured to realize desiredenvironmental benefits, one
would hope that the GEF has made room for scientific and technical advice. It
has - but the effective integrationof such advice isquestionable. f7!
The Instrument for the Establishmentof the Restructured GEF states
that a Scientific and TechnicalAdvisory Panel CSTAP) shall serveas an advisory
panel to the Facility, and UNEP shallserveas the GEF-STAP liaison. The
STAP is a panel of 12 prominent scientists from around the world that meetsa few
times per year. It is noteworthythat the STAP is an advisory bodyonly, and
STAP memberscannot makedemands of the GEF. Additionally some STAP
membershave expressed that the GEF Secretariat"select[s] where to listen" to
their advice."
Comments from World Bank staffbolster this view. One donor council
member stated, 'The STAP is not crucial to the GEF."l73 Former World Bank
VicePresident of the EnvironmentKen Piddington stated at an Aberdeen
conference in 1992 that the STAP was ofvalue primarily becauseit had an
environmental lawyer and an environmental economistas members?' - no
mentionwas made of the value of naturalscientistsas advisors, though it is only
96
forest management, biodiversity, and the like.
Yet even if the GEF were to appropriately represent all major stake
and were to havethe science right, interpreting which portions of projectso
to receive funding is not straightforward.This is becausethe GEF is desig
fund additionalor "incremental" costs for environmentally friendly practices
stated on the G EF web site,
GEF funds the "incremental" or additional costs associated with
transforming a project with national benefits into one with global
environmental benefits; for example, choosing solar energy technology
over coal or diesel fuel meets the same national development goal (power
generation), but is more costly.GEF grants cover the differenceor
"increment" between a less costly, more polluting option and a costlier,
more environmentallyfriendly option. 175
Though this appears to be a simple concept, in practice identifying
"incremental" costs of this type are quite challenging. Some GEF projects u
the Climate and Biodiversity Conventions are entirely comprised of "increm
costs, since the project would not even be done in the absence of such
environmental conventions. This is particularly true for the issue of biodive
loss, as one NGO observed, "[I]t is extremely difficult, many feel impossib
distinguish in any measurable or otherwise credible way, between the glob
environmental benefits and domestic benefits of a biodiversity project."?"
Diversity.
As mentioned in Ditiiculties During the PilotPhase, 1990-1994, the G EF ,
UNEP, and UNDP are considered equal "implementing agencies" for projects or
portions of projects funded by the Facility. However the GEF has an intimate
relationship with the UN Framework on Climate Change (UNFCC) and the
UN Convention on Biological Diversity (UNCBD, or CBD) as well. For the
purposes ofthis study, the relationship between the GEF and the UNCBD is of
primary interest.
The UNCBD was drafted at the Rio Earth Summit in 1992 and is
considered a special secretariat under the purview of UNEP.I77 At the time, rich
nations envisioned that the new GEF could act as an interim funding mechanism
for UNCBD's initiatives.?"Within a few years, it became clear that what the
G EF thought it should be doing - while under the administrative charge of the
World Bank - was quite different from what the UNCBD thought it should. For
instance, the UNCBD wanted to target GEF funds to biodiversity hotspots in
countries such as Brazil, Indonesia, and Colombia; however, development
agencies such as USAID and the GEF Council preferred that all countries
receive a share ofGEF funds regardless of how much rare biodiversity existed in
their borders. Young commented,
[Wjider implementation ofthe CaD could win broader political support
than the more purely 'global' approach favored by... environmental
scientists like Myers and ... NGOs like Conservation International/"?
98
quality' biodiversity has run up against the political reality that the GEF a
CBD are organizations ofstates, not ofscientists.Y"
The cultural divide between statesmen and financiers no doubt als
a role in the increasing tension between the GEF and the UNCBD. The
would try to offer the GEF guidance, and the GEF interpreted this vague
guidance into something that made sense in economic terms - often takin
that the CBD hardly intended. The CBD would then respond with pleas
reconsideration ofGEF actions." Young concluded,
[WJhile the G EFs CEO was frustrated by the numher of demands
placed on his staff [by the CB D], the Convention bodies were even more
frustrated ... [with] GEF projects that they did not deem the best use of
scarce environmental funds."
The irony ofthe GEF is that it is recognized in the CBD as a fina
"mechanism," while the GEF views the parent organization of the CBD -
UNEP - as an equal "implementing agency." During the third Conferenc
Parties meeting (COP-3) in Buenos Aires, G EF financiers made clear tha
by working with the GEF... could the CBD ensure funding for its global
environmental purposes.T'' What this meant was that the CBD would ha
more deferential to the way the Bank did business. On the bright side,
cooperation between the CBD Secretariat and the GEF Secretariat did i
after the COP accepted the GEF as CBD's permanent financial mechani
The chargeofthe GEF is to fund incremental additions to localized
projectsthat should enableglobalenvironmental benefits. But fundamental
tension existsbetween local executorsof projectsand the global professionals of
the GEF.'84 First there is the problemofexperience. All too often the learned
decision-makers of the G EF have limitedexperience with the locales impacted by
projects. At timesthis ignorancecan manifest in almost comical ways. In 1998 a
GEF-NGO conference was held in New Delhi to discussthe India
Ecodevelopmentproject. Indigenouspeoplefrom Nagarhole, South India were
invitedto the proceedings, but theywere not permitted to attend the opening
receptionbecausenone of them had shoes.r85 Additionally there were no
translation facilities for their language, so theydid not hear the GEF CEO speak
about the value of their participation.
Unfortunately the N agarhole incidentis representative of short
sightednesswithin the GEF. A GEF staffmembercommented,
The G EF is not pro-active for indigenous communities.... It should
instead target them as beneficiaries. G EF needs to do a lot more work...
for example what to do about indigenous people who don't use monetary
measures ofvalue? Everybody here in the Bank thinks they know it all
about issues like indigenous people and gender, but they rarely even take
social scientists in project mission teams. l86
Young sensed that despite the high hopesfor the GEF, therewould
always be a ceiling to its progressive efforts, sinceas a relatively young
supranationalorganization,there could be realpolitical consequences for
"empowering citizens at the grass roots at the expense of governments,
100
could include local upsets ofgovernmental systems, which, in turn, upset p
goals and donor countries. All of this implies that the GEF will always hav
donors' interests in the back ofits mind. A staff member with the UNCBD
reflected,
LIlhe World Bank is well established and has more money than it knows
what to do with, while the GEF is new and fragile, always with an eye on
the next donor replenishment, so it can't be seen to step out ofline. lss
6.5
Conclusion
As a case study, the GEF reveals that the tensions that have plague
Bank since its inception continue to this day. Historically the Bankwas cre
help business do business on its own terms, and though the advocates of th
hoped that the Facility would give the Bank a green thumb, it has been litt
than an add-on program that mitigates environmental problems created by
primary infrastructural and investment projects inspired by the Rostovian
development framework The GEF maintains important administrative an
structu ral ties to the World Bank, which dampens its ability to be as exper
as proponents seem to desire. This happens because, at all times, the GEF
by political and structural necessity, must bear in mind the interests ofits d
countries.
The integration of scientific and technical advice for achieving the e
environmental conservation has also been spotty. World Bank institutions
accustomed to heeding the advice of ecologists, let alone the advice of
of human impactson biodiversity. The GEF has shown itselfto be no exception
in this regard. Additionally the manner in which GEF funds are to be used is very
specific, onlyfor additionalor "incremental" costs for environmentally friendly
practices in projects that provide"global" as opposed to local benefits. Despite the
specificity of this definition, it is notoriously difficult to interpret - particularly for
projects designed to mitigate biodiversity loss.
Young concluded that the GEF simply mayhavebeen too ambitious a
project becauseit was entrusted with conflicting objectives includingoffering
financial support to UN Conventions,towing the lineon Rostoviandevelopment
theory,bridging the gap between the businessworld and civil society, and
reformingboth the 'efficient' World Bank and the 'democratic'UN "to giveeach
more of the other's attributes - without underminingtheir comparative
advantage."'!l9 She wrote,
In this experimental context, risk aversion combined with the search for
consensus and a good public image [mea nt] that the G EF Council had
more money than it was effectively able to spend according to its own
demanding rules.'?"
Unfortunately the reality of these difficulties has been much pomp and
circumstancewith little result. In the words offormer GEF CEO El-Ashry,
...[Djuplication, fragmentation and competition for scarce [fiscal]
resources - fundraising gimmicks ifyou will. And despite all the fancy
brochures and reports that fill our shelves, the state of the world
environment continues to deteriorate. 191
102
This thesis explores how biodiversity loss negatively impacts hum
societies, and establishes that biodiversity lossis most pronounced in leas
developed economies. Due to the linksbetween a territory's economicsta
the presenceof biodiversity hotpots, this thesis also explores historical and
philosophical reasonsfor why the verybusinessof international developm
be behind such environmental impacts. As one of the oldest and most infl
developmentinstitutions,The World Bank is studied as a development a
possible catalystfor makinginternationaldevelopment moreenvironment
friendly. In its most recentprogram initiatives, the Bank: has attempted to
environmentally conscientious, and The Global EnvironmentFacility (G
case in point. Additionally the G EF is a particularly relevant casestudy fo
biodiversity lossproblem becauseit is a permanent funding mechanism fo
enforcementof the UN Conventionon Biological Diversity.
Under the GEF, changes in development practiceshave been larg
superficial. Donor countries stillcontrol decisions for aid disbursement.
Additionally tension surrounds what typeS of projectsshould receive G E
funding - projectsthat protect localbiodiversity or "global" biodiversity. I
biodiversity hotspots, these are one and the same,but so long as the G EF
over how to interpret its charge, no action is taken - allowing biodiversity
away.
couchedin neo-Malthusian terms,where humanpopulation pressureis believed
to be the primarycauseof environmental degradation. However this thesis
demonstrates through a statistical analysis of the connection betweenpoor
economic conditionsand biodiversity lossthat a neo-Marxian perspective may be
more useful. Population pressure alonewas shown to be insufficient for explaining
biodiversity lossworldwide,sincemany biodiversity hotspots lackhigh population
densities. Instead economicconditionswere found to hold a statistically
significant relationship with biodiversity loss - demonstrating that a neo-Marxian
viewof the problem may be more appropriate.
With a neo-Marxian viewof biodiversity loss, questions regardingsocial
and economicjustice must be pan of the environmental discussion. With the
relevance of this paradigm established, one can return to the historical and
phiJosophical viewsof international development during the zo" centuryand
glean more insights.
Though proponents ofinternational development were quite ambitious
during the 1960s (peoplethought the "developing world"would "take off" as
quickly as formerly war-tom Europe), theylacked perspective on the necessity of
fulfilling social preconditionsfor economic take-offsuch as fairterms of trade,
humanedevelopmentof urban populations, growth of a domestictechnology
sector (whichin turn requiresan educated portion of the local populaceand
technology transferprograms),and opportunitiesfor upward mobility (which
on other aspects of Rostovian development, such as establishing the insti
infrastructurefor financing, attracting foreign investors, and developing n
resourcesectors such as agricultureand mining. Additionally Rostovian
developmenttheoryviewsthe environmentonlyas a naturalresource bas
economicactivity. Careful managementof this resourcebase is not explic
discussed - implying that environmental managementis not a priorityof
institutions that lend money for economic development either.
Developmentefforts went particularly awryduring the Cold War
industrializedsuperpowers- the US and the USSR - were moreconcer
expanding their spheresof influence than theywere with actually helping
independent nationsdevelop. Thus no concertedefforts were taken by 'ne
developmentagencies or the superpowersthemselves to battle corruptio
result, manydevelopmentfundswere squandered by rogue governments,
seeds of democracy - which Rostow alsobelieved would be important fo
successful economic take-off - were neverplanted.
During the energycrisesof the 1970s, shocksto the international
system hit poor, developing nationsparticularly hard, since manyof them
heldvariable-interest loansfrom privatebanks. This changed the econom
balancesheets of manydeveloping countriesovernight, further retarding
developmentefforts. Under the pressure of the IMF to continue payingb
interest on these large loans,many countriesactually backslid in their
transition - such as government-sponsored healthcare in crowded slums - were
scaledback or shelved. Public investments in government-owned industrywere
also forced to be sold under conditionsoutlinedfor emergency loans bythe IMF.
Ever sincethe IBRD finished its development work with war-torn
Europe, the World Bank haswalkeda fine linebetween its role as a development
institution and its roleas a majorplayer in the international monetarysystem.?'
On manyinstitutionalfronts, the Bank appears to exist more for its donor
countries'interests and lessfor developing countries. For instance,by tradition,
the World Bank has always been headed byan American, whilethe IMF has
always been headed by a European.v Bretton Woods has also remainedsteadfast
to its historical position that anyeconomies finding they require IMF helpfor any
reason are subject to strict macroeconomic restructuring, makingbalance-of
payments problemssolely the domain of troubled economies - and not of the
partieswho lent privatefunds.
What this allmeansis that if the Bank is seriousabout changingits
development legacy and contributing meaningfully to the biodiversity loss
problem, it must makechangeson morefundamental levels. As the neo-Marxian
perspective points out, alleviation of the social conditionsthat give riseto poor
qualityof life (and hencepronatalistpressures) must be addressed. This may
require social impact assessments in addition to environmental ones. It also
insinuates that social scientists, who are notjust economists, be consulted.
106
-
-
-
-
-
-
-
- -
communitiesmost affected bydevelopment projectsto programs like th
Currently the G EF does not take localoutreachvery seriously, and from
Marxian perspective, this is a big mistake.
However some criticsalso argue that anyinternalchangesthe W
Bank attempts will makelittle difference, sincethe Bank is onlyone play
larger globaleconomicsystem. As a development institution, the World
eager to fund projects that help LDCs build infrastructure and establis
amenableclimatefor new investors and financial markets; however, the
not the onlyfunding sourceavailable to projectsor start-up companies.
private investmentshave becomethe mainsourceof funds to developing
countries,'?' Thus although the World Bank has been a clearactor in th
economicsystem over the past 60 years, anyimmediate impact from its
policy changes becomequestionableonce its relatively small financial ro
large, globalized financing market is realized.
To complicatematters, the moveofindustrialized countriesto "
economies" maycharacterize an entirely newfocus of the market system.
this means is that "theinvisible hand" of the market could giveriseto inc
decentralized resistance againstefforts to preservebiodiversity due to th
of consumer demands in industrialized economies. The explosion of bo
and high-end retailingvis-a-vis stores such asWalMart and Whole Foo
byproduct of the service economy transition and signifies what Weaver
consumerswant material goods, but theywant it at a substantialdiscount from
the manufacturers suggested retail price,available only from WalMart or Target.
Meanwhile consumersable to afford moreexpensive products desire not only
fresh romainelettuce in the summer,but organic, pre-washed salad mixin the
winter. This translatesto a lifestyle that demandsstages oflabor that neverexisted
before- labor that is superexploitable for cheapgoods and labor in faraway lands
that can deliver goods that are locally unavailable due to seasonality or other
factors.
The only placeswhere this typeoflabor can be bought are LDCs.
Though the shift to a stages-of-labor economy provides benefits such as
ubiquitous low-cost goods and economic development, it alsoposes challenges.
Demand byconsumersin rich nationsfor the aforementioned new-niche
amenities drivesthe conversion ofvirgin land and subsistence communities in
developing countries to agriculture and industry. Countries with unique natural
resources -like mangosteenst" in Indonesiaor green iguanas"? in South America
- abandon cultivation of these localgoods to insteadpush out more familiar
products to Western consumerssuch as beeffrom cattle.Willeand Jukofsky
noted,
[I]f you're a fanner [living in the rainforest] with a family to feed•...you're likely
more interested in chopping or burning down the trees on your land to make way
for cattle or crops - something you can sell. After all. iguanas make a delectable
dinner, but they won't keep the kids in clothes. 198
108
people living in developing economies must make.
Taken together, the current structure of international financing an
direction of the new globaleconomy reveal how daunting conservation of
biodiversity hotspots will be. The forces that influence land conversion ar
decentralizedand connected to international market fluctuatlons.f" How
would be a mistaketo think that institutionalchangesat an organizationl
World Bank go unnoticed. Bretton Woods institutions have historically b
the center of institutionalpower on the world development scene,and Br
Woods legitimizes certain waysoflooking at States and markets. 200 As th
guerrillasatiristsThe YesMen haveshown through their variousantics -
as representatives from the World Trade Organization and other organiz
professional conferences and in televised interviews - businessand govern
leaders,as wellas academics, take many cuesfor advancing globalization
economicdevelopment from these types of multilateral agencies.'?' What
means is that in its attempt to integrate social and environmental responsi
into its development practicesbystarting new programslikethe GEF, th
Bank has taken a step in the right direction. But to truly makea difference
Bank must remainvigilantin its transformations and be willingto makem
more fundamental changes, sinceit has a long historical legacy and much
institutionalinertia to overcome.
This Page Intentionally Blank
110
I Edward O. Wilson, The Diversity ofLife (N ew Yorlc W. W. Norton & Company, 1992;reprint,
1999),281-282.
2 Wilson, ]26.
3 Wilson, ]28.
4 Major sources of data for this study include publications, internal papers, and websites of The
World Bank; The World Bank: Its FirstHalfCentUJyby Kapur et al., A New Green Order? by
Young; and the Conservation International web portal for hotspots, Biodiversity Hotspots
(http://w ww.biod iversityhotspo ts. orglxplHotspots/).
5 Wayne Ellwood, The No-Nonsense Guide to Globa.lization(Oxford: New Internationalist
Publications Ltd, 2001; reprint, 2004), 24-27. Not all agree that this was the aim of Bretton Woods
architects. It could also be argued that delegates were primarily concerned with saving capitalism,
since the Great Depression and global recession showed how devastating economic failures under
capitalism could be. See Wikipedia., The Free Encyclopedia; s.v, "Bretton Woods system," 5 Ju ne
2005, <http://en.wikipedia.orglwikilBretton Woods system> (6 June 2005).
6 Ellwood, 28-32, and Wikipedia., The Free Encyclopedia., s.v, "Bretton Woods system:
7 US Congress, House of Representatives, Committee on Foreign Affairs, "Environmental Impact
ofWorld Bank Lending (Vol. I); tor" Congress, r" Session, September 26,1989,58.
8 The World Bank. A Guide tv The World Bank(Washington, DC: The International Bank for
Reconstruction and Development/The World Bank, 2003), 8-9.
9 The World Bank, A Guide to The World Bank, 4
10 ZoeYoung, A New Green Order? The World Bankand the Politics of the Global
Environmental Facility(Sterling, Virginia: Pluto Press, 2002), 23.
11 The World Bank, A Guide to The World Bank, 10.
12 Representation is primarily by region, though there are some countries that are represented by
executive directors from outside regions. Countries for which this is the case include Algeria
(M iddle East), Cambodia (Austr alia), Ghana (M iddle East), Guyana (N ort h America), Ireland
(N ort h America) Israel (E urope), Korea (Austr alia), Maldives (M iddle East) Mongolia
(Austral ia), Spain (South America), The Philippines (South America), Timor-Leste (E urope), and
Tunisia (Middle East). The World Bank. A Guide to The World Bank, 170-171.
13 The World Bank. A Guide to The World Bank, 8""9, 169-171.
14 The World Bank, A Guide to The World Bank, 8""9, 172-173.
15 The W orId Bank. A Guide to The World Bank, 19.
16 The World Bank, A Guide to The World Bank, 21.
17 The fact that World Bank and IMF leadership have always been, by tradition, an American and
a European is a point of criticism by authors ZoeYoung, Wayne Ellwood, and Maggie Black, as
well as by the non-profit advocacy group 50 Years is Enough - whose namesake was based upon
the age of the Bretton Woods institutions when the advocacy group was founded.
18 The World Bank, A Guide to The World Bank, 31.
19 Ellwood, 30-31.
20 Maggie Black, The No-Nonsense Guide to International Development(Oxford: New
Internationalist Publications Ltd, 2002), 15, and Frederick S. Weaver, Economic Literacy: Basic
Economics with an Attitude (Boulder: Rowman & Littlefield Publishers, Inc., 2002), 207-208.
2 1 Wi/dpedia., The Free Encyclopedia., s.v, "Iron Curtain; 4 March 2007,
<http://en.wikipedia.orgIwiki!Iron curtain#Origins of the Iron Curtain> (II March 2007).
22 Klaus Knorr article, 1948, quoted in Edward S. Mason and Robert E. Asher, The World Bank
since Bretton Woods (Brookings, 1973): 29, quoted in Devesh Kapur, John P. Lewis, and Richard
Webb, The WorldBanJc Its FirstHeltCcntury; Volume I: Historyr(Washington, DC: Brookings
Institution Press, 1997), 3n.
23 Wi/dpedia., The Free Encyclopedia., s.v, "NATO; 25Apr 2005,
<http://en.wikipedia.orglwikilNATO> (25 April 2005).
111
Wikipedie; The Free Encyclopedia, s.v,"Warsaw Pact,"25 Apr 2005,
<http://en .wikipedia.org/wiki/Warsaw Pact> (25 April 2005).
25 Black.17.
26 Wikipcdis; The Free Encyclopedia, s.v. "Bandung Conference,"24 April 2005,
<!:!!m:!/en.wikipedia.orglwiki!Bandun~Conference> (25April 2005).
27 Black.16.
28 Ibid.
29 Wikipedia, The FreeEncyclopedis; s.v."OPEC," 20 April 2005,
<http://en.wikipedia.orglwikilOPEC> (25 April 2005).
30 Wildpedia, The FreeEncyclopedia, s.v, "Non-AlignedMovement," 24 April 2005,
<hrrp://en.wikipedia.org/wjkilNon-Aligned Movement> (25 April 2005).
31 John Cassidy, "Always with Us?"Interviewwith Jeffrey Sachs in The New Yorker, April II,
2005, 75.
32 Black.18.
33 The World Bank. A Guide to The World Bank, 16.
34 Black.18.
35 Wikipcdia, s.v."Non-Aligned Movement."
36 Non-Aligned Movement (NAM), 'The Non-Aligned Movement: Description and History,"21
September 2001, <http://www.nam .gov.za!background/history.htm> C3 May 2005).
37 US Census Bureau, International Data Base. 24 August 2006,
<http://www.census.gov/i~/www/idbagg.html> (17 March 2007). Table 001: Total Midyear
Population, Area, Density; aggregated by Population and Region: World and Less Developed
Countries.
38 Noam Chomsky, What UncleSam Really Wants (Berkeley: Odonian Press, 1992), 19, asserts,
"In one high-level document after another, US planners stated ... that the primary threat to the new
US-led world order was Third World nationalism...." He points to National Security Council
Memorandum 5432 (1954) as evidence. He alsoelaborates this claim in his book. On Power and
Ideology: the Managua Lectures,Lecture I .
39 Weaver,207.
40 As Black(19) puts it, '[Tjhe idea that a decade might sec the task almost through ... did not then
appear so far fetched. Many a 2O th-century miraclehad been accomplished in less."
41 The prolificN oam Chomsky haswritten at length about the Cold War relationships between
the United States and manycorrupt regimes in developingcountries. See alsoYoung, 23.
42 The World Bank Group , "Pages from World Bank History: The Pearson Commission,"2005,
<http://wcb.worldbankorgIWBSITE/EXTERNAUEXTABOUrUSfEXTARCHIVES/o,,c
ontentNlDK:20I2196~pagePK:3m6~piPK:36092~theSitePK:29506,00.html>
(5 May 2005),
and Black.20.
43 The World Bank Group, "Pages from World Bank History: The Pearson Commission,"and
Black.20-21.
44 Lester Pearson and Robert C. Leffingwell lectures for the Council of Foreign Relations 1969
(Pall Mall Press, 1971), referenced in Black.20.
45 Kapur et al., 215-268.
46 Weaver, 213 and Ellwood, 42.
47 Weaver, 214.
48 Black.23and Ellwood, 38.
49 Black.23.
50 Weaver, 214.
51 Ibid.
52 Wikipedia, The FreeEncyclopedia, s.v,"1979 energycrisis," 25 April 2005,
<http://en.wikipedia.org!wiki/I97~ energy crisis> (21June 2005).
53 Kapur et al., 598; alsoWeaver, 214.
54 Weaver, 215.
24
112
Ellwood, 43.
Weaver, 215.
57 Ellwood, 29, and Wikipedia; s.v. "Bretton Woods system"
58 Ellwood, 4 6-48, and Weaver, 216.
59 Kapur et al., 682.
60 Weaver, 216.
61 A listing of the 43 IMF-approved structural adjustment loans appears in chap. 14 of Sile
Revolution: The IMFtiom 1979-1989, 674-616. Most structural adjustment programs ove
The World Bank were joint projects with the IMF, but some countries worked solelywit
Bank.
62 Black, 24-25, and The World Bank, World Development Report1999/00referenced in
Ellwood, 48.
63 Black, 24-25.
64 Black, 25
65Economic Justice Report; Ecumenical Coalition for Economic Justice, Vol. X, No 4, De
1999 referenced in Ellwood.aj.
66 For detailed discussions of how Bank presidents felt about the institutions poor reputat
Devesh Kapur, John P. Lewis, and Richard Webb, The World Bank: Its First Half Cent
Volume1:History(Washington, DC: Brookings Institution Press, 1997).
67 The World Bank, A Guide to The World Bank, 153-154.
68 The World Bank, A Guide to The World Bank, 153-154.
69 John Garrison and Teresa Aparicio, "The Challenges of Promoting Participatory Deve
in the Amazon" in World Bank Publications on Civil Society Engagement, September 20
<hnp://web.worldbank.orglWBSITE/EXTERNAl/fOPICS/CSO/0"contentMDK:
6-menuPK:27736J-pagePK:220503-piPK:220476-theSitePK:228717,00.html> (17 Marc
The Garrison Aparicio note can be accessed directly at
<http://siteresources.worldbank.orgiCSO/Resources/planafloroCaseStudy.pd.f>.
70 Eugene Linden, "Playing with Fire," in Time, September 18,1989. Retrieved from
<http://www.time.com/time!magazine/article!0.9171.958591-1.00.html> (17 March 2007).
Young, 39; US Congress, House of Representatives, Committee on Foreign Affairs,
"Environmental Impact ofWorld Bank Lending (Vol. 0," JOIst Congress, r" Session, Sept
26,1989; and "Environmental Impact ofWorld Bank Lending (VoL II)," October 4,1989.
71 US Congress, "Environmental Impact of World Bank Lending (Vol. I),"51-56.
72 Robert Wade, "Japan, the World Bank, and the Art of Paradigm Maintenance: TheEa
Miracle in Political Perspective," 1996 referenced in Young, 39.
73 The World Bank, A Guide to The World Bank, 154.
74 Young, 6.
75 The World Bank, A Guide to The World Bank, 154.
76 The World Bank, A Guide to The World Bank, 155.
77 The World Bank, A Guide to The World Bank, 57-58.
78 The World Bank, A Guide to The World Bank, ]8,9, 156.
79 The World Bank, A Guide to The World Bank, 155.
55
56
80
Ibid.
The World Bank, A Guide to The World Bank, 155-156.
W. W. Rostow, The Stages ofEconomic Growth:A Non-Communist Manifesto, 3rd ed
York: Cambridge University Press, 1990; reprint, 1993).
83 Tunothy J. Yeager, Institutions, Transition Economics, and Economic Development (B
CO: Westview Press, 1999),17-23.
84 See John Cassidy, "Alwayswith Us?" Interview with Jeffrey Sachs in The New Yor]a;r,
81
82
2°°5·
See Maggie Black's The No-Nonsense Guide to International Development(Oxford: N
Internationalist Publications Ltd, 2002),
85
86
Rostow, xxiii-xxiv.
87
Rosrow, JI.
Rostow, 72 •
Rosrow, 16S.
90 Rostow, 142 •
91 Wilson, 393,and William P. Cunningham and Mary Ann Cunningham, Principles of
Environmental Science: InquiryandApplications, 2nd ed. (New York: McGraw-Hill, 2004), 107.
92 Wilson, 198-199.
93 Wilson, 261-263
94 Conservation International, "Biodiversity Hotspots: Key Findings," 200S
<http://www.biodiversityhots~JBotspots!hotspotsSciencc/k:ey findlng§i> (II May
200S).
9S Wilson, xvii, 253.
96 Stephen H. Schneider, LaboratoryEarth: The PlsnctsryGsmblc We Can'tAfford to Lose
(Lo ndon: Weidenfeld & Nicolson, 1996), 103
97 Paul Ehrlich referenced in Cunningham & Cunningham, III; also Wilson, 189,280.
9BWilson, 281, 283, 287,3°4-310.
99 The wide spread in the estimation of existing species is due to the fact that most identified
species are arthropods (insects, crustaceans, spiders) and plants. Additionally the microbiological
world consists of great biodiversity still being discovered ("It is obvious that microbiologists will
not run out of work for a couple of centuries." Jostein Gokseyr quoted in Wilson, 144). Also
Wtlson, 132-134.
100 Wilson, 243-244.
' 01 Wilson, 2SS.
'02 Cunningham & Cunningham, 107.
IOJ Gretchen Daily, Nature'sServices: SocietalDependenceon Natural Ecosystems(1997)
referenced in Geoffrey Heal, Nature and the Marketplace: Capturingthe Value ofEcosystem
Servires(Covelo, CA: Island Press, 2000), 2.
104 Cunningham & Cunningham, no.
·os Heal, 17-18 and Hearst Communications, Inc., "Recycling Biosphere 2,"in PopularMechanics, I
August 1997 <http://www .QQpulannechanics.com/sciencelresearch/12~M36 .html?p~e= l&c=y>
(8 May 200S).
•06 Wilson, 28S.
107 Cunningham & Cunningham, 108.
•oBWilson, 286-287; Cunningham & Cunningham, 110; Heal, 9S""96, 10I-l0S.
109 "Organisms are superb chemists. In a sense they are collectivelybetter than all the world's
chemists at synthesizing organic molecules of practical use. Through millions of generations...
each species has experienced astronomical numbers ... ofgenetic recombinations.... The
experimental products thus produced have been tested by the unyielding forces of natural
selection, one generation at a time."Wilson, 28S.
88
89
110
Ibid.
For a discussion of the many cultural, legal, and political struggles that surround bio
prospecting, see Vandana Shiva's Biopiracy: The PlunderofNature and Knowledge (Boston:
South End Press, 1997).
112 E.O. Wilson referenced in Cunningham & Cunningham, III.
III
"3
Ibid.
Heal, lO8-no.
287.
116 Wilson, 287; Cunningham & Cunningham, 108.
"7 Jean L. Marx, "Amaranth: A Comeback for the Food of the Americas?"in Science, 198:40 (1977)
referenced in Wilson, 293.
118 Wilson, 30+
114
"5 Wilson,
114
Wikipedia, The Free Encyclopedia, s.v, "Eagle feather law," 4 Feb 2007,
<http://en.wikipedia.orglwikiJEagle feather law> (I April 2007).
' 20 Cunningham & Cunningham, 110-111.
12' Wilson , 305.
'22 Ibid.
12
3 Wilson, 349-351.
''4 Wilson, 351.
'''5 William 1. Barber, A History ofEconomic Thought(New York: Penguin Books, 1967; reprint.
1984),57-58. Shortly before the publication of Malthus' paper, legislation was introduced to
actually encourage large families. William Godwin, an advocate for population growth, claimed
that more people with the ability to be happy increased total happiness. The prevailing assumption
was that human population growth was slow (·...Gregory King, the pioneer national income
statistician... predicted in 1696 that the population of England would be unlikely to double in less
than six hundred years...."), and the first comprehensive enumeration of Britain's population
wouldn't occur until 1801.
126 Barber, 57-60.
' 27 Barber, 59-60.
128 Barber, 59, 73. Malthus believed that humans were naturally inclined toward debauchery and
laziness. Though he sounded a cautionary note on the question ofpopulation, he was opposed to
birth control because he believed a combination oflow wages and family pressures helped people
overcome their natural tendencies. He believed that marriage and parenthood inspired diligent
work, while meager wages would prevent large families. However demographers now see limited
upward social mobility as a condition that promotes childbearing.
'29 Barber, 63.
'3° Cunningham & Cunningham, ]8; also Wikipedia, The Free Encyclopedia, s.v. "Charles
Darwin; 8 May 2005, <http://en.wikipedia.org/wiki/Charlcs Darwin> (10 May 2005). Carrying
capacity is an ecological concept rooted in Darwinian ones such as natural selection, selective
pressure, and density-dependent population limiting factors . Though neo-Malthusians often argue
that biology and ecology is on their side, it is worth noting that Darwin's theories were actually
influenced by Malthus'views on human population.
'3' Cunningham & Cunningham, 79.
'32 Garret Hardin quoted in Cunningham & Cunningham, 89"90.
'33 Barber, 127; Cunningham & Cunningham, 79; Wikipedia, The Free Encyclopedia, s.v. "Das
Kapital," 27 Apr 2005, <http://en.wikipedia.org/wiki/Das Kapital> (12 May 2005).
'34 Karl Marx, Capital, vol. 1(1912): 692-693, quoted in Barber, 127.
'35The details ofwhat makes Marx's argument work are ofcourse left out here. Barber, 117-162
offers a good primer on Marxian econom ics and the significance of this work.
.J6 Wikipedia, The Free Encyclopedia, s.v. "Population modelling," 16 June 2007,
<.bn:Q://en.wikipedia.org/wikilPopulation modeling> (08 Aug 2007), and s.v. "Pierre Francois
Verhulst," 01 Aug 2007, <http://en.wikipedia.orglwikilPierre Fran%C3%A70is Verhulst> (08
Aug 2007).
1J7 Ecologists have divided organisms into two reproductive categories: r-adapted and K-adapted.
Organisms that are r-adapted reach sexual maturity quickly, reproduce often, and have many
offspring. Typically the offspring of r-adapted species are not nurtured . Examples of r-adapted
organisms include weeds, insects, and small rodents. K-adapted species are long-lived and take
years to reach sexual maturity. They reproduce infrequently and have few offspring. Typically the
offspring ofK-adapted species are nurtured. Examples ofK-adapted organisms include many top
predators such as tigers and birds of prey. Other large megafauna such as elephants and panda
bears are K-adapted. For more discussion see Cunningham & Cunningham, 63-64.
8
'3 Karl Marx, Capital, vol. 1(1912): 554, quoted in Barber, 136-137.
'39 Marx argues specifically that it is the capitalist modes of production that create poverty.
"9
115
'40 Barber, I41. Barber argues that Marx would have rejected market interventions, such as India's
decision to restrict the introduction of modem technologies to products that do not compete with
established manufacturing, because of his economic determinism. "Within [Marx's] perspective,
policy measures designed to alter the course of history were inevitablyfruitless and vain,"
'4' Cunningham & Cunningham, 86-87.
2
'4 John Bellamy Foster, The Vulnerable Planet: A Short Economic Histary cf'thc Environment
(N ew York: Monthly Review Press, 1999),3°. By substituting definitions in for A and T , the
identity becomes Impact = Population * (capital stock/person * throughput/capital stock) *
(energy/ throughput * environmental impact/unit energy). Environmental impact can be measured
in many types of units. Examples include species loss, global warming potential, or tons of
mercury.
'43 Foster, 30-31.
'44 According to The Gapminder World 2006 tool (accessed 10Aug 2007), in 2004 the vast
majorityof the world averaged three children per woman or less - a huge improvement over the
demographic state of the world in 1960,when manycountries averaged about 6.5children per
woman. It is arguable that a worldwide demographic transition is already occurring, but it is far
from complete. Note that by 2004, the United States averaged 2.04 children per woman, and
Japan only 1.29 children per woman. Indian women by comparison, at 2.88children per woman,
still have 40 %more children than Americans and 120%more children than the Japanese. For more
see http://tools.google.com/gapminder.
'45 Conservation International , "Biodiversity Hotspots: Key Findings."
'46 Wilson, xvii, 253.
'47 Stephen H. Schneider, LaboratoryEarth: The Plsnetsry Gamblc We Can'tAfford to Lose
(London: Weidenfeld & Nicolson, 1996),103.
'48 Conservation International , Biodiversity Hotspots, 2005
<http://www.biodiversityhotspots.orglx;p!Hotspots!> (n May 2005).
'49 Conservation International, "BiodiversityH otspots: Resources," 2005
<http://www.biodiversityhotspots.orWx;p!Hotspots/resources/mars.xml> (n May 2005).
'50 Income and debt classifications,as well as explanations for their calculations, were retrieved
from The World Bank Group, "Country Classification," 2005,
<http://www.worldbank.org,''datalcountryclasslcountryclass.html> (27May 2005).
'S' Quotation taken directly from The World Bank Group, "A Short History [of Country
Classification]," 2005, <http://www.worldbank.org...datalcountryclassihistory.htm> (27May
2005)·
'52 Though developing economies should not be lumped together as the "poorest"economies in the
world, they are likelyto have goals for increased standards of living as common characteristics.
'53 SEDAC: Socioeconomic Data and Applications Center, Gridded Population of the World and
the Global Urban-Rural Mapping Project, 2007 < lm:R://sedac.ciesin.orgLgmyLglobal.jsQ#> C31
March 2007).
'54 The World Bank, A Guide to The World Bank, 154, and Young, 6, 16.
'55Young, 6-].
's6Young,81.
'>7Young, 8.
'SS Catherine Caufield, Masters ofIllusion: The World Bankand the Poverty ofNations (Lo ndon:
Pan, 1996)referenced in Young, 57.
'59 Young, 59.
,60 Young, ]8.
•6, Young, Io-n.
1M Global Environment Facility homepage, 2006 < http://www.gefweb.org,''index.html> (7 April
2007).
,63 Caufield referenced in Young, 82.
•64 Young, 85.
116
-
-
-
-
-
-
-
-
-
1<Is Young, 60, 82.
,66 David Reed (ed.), The GlobalEnvironmentFacility: SharingResponsibilityfor the Biosphere
(Washington, DC: WWF International Institutions Policy Program, 1991 (Vol. I), 1992(Vol. 2))
referenced in Young, 82.
'67 David Fairman, "Increments for the Earth: The G EF' in Marc A Levy (ed .) Institutionstor
EnvironmentalAid:Pitfalls andPromise(C ambridge, Massachusetts: MIT Press, 1996)
referenced in Young, 83, zn.
,68 GEF/PA9Y97, "The GEF and the Evaluation: Learning from Experience and Looking
Forward," background note for the G EF participants meeting, Cartagena, Colombia, December
1993 referenced in Young, 86.
169 Young, 88-89.
'70 Young, 90.
'7' Young, 110-112.
'72 Young, 110.
'73 Ibid
'74 Young, III, 34n.
175 Global
Environment Facility, "Operational Policies," 2006
< http://www.gefweb.orgiOperational_Policies/Eligibility_Criteria/Incremental_Costs/i ncremen
tal_costs.html> (8 April 2007). See also Young, 116.
,;<5 RESOLVE, Progress on Incremental Costs IssuesAssessment:Incremental Cost
Detxrminetion fOrGEF-Funded Projects, GEF/c.I2/In£4., 1998 referenced in Young, II7.
177 Convention on Biological Diversity, "The Convention on Biological Diversity," n.d.,
<http://www.biodiv.or~convention/default.shtml> (8 April 2007) and United Nations
Environment Programme, n.d., <http://www.uneR.orglDocuments.MultilinguaVDefault.as2£
DocumentID=43&ArticleID=234&I=en> (8 April 2007).
178 Young, II9-120.
'79 Young, 120.
,So Kathleen McAfee, Biodiversity end the Contradictions ofGreenDevelopmentalism, 1999, PhD
dissertation, University of California, Berkeley referenced in Young, 121.
,81 Young, 121-122.
•82Young, 122.
,83Young, 126.
184 Young, 195-196.
ISs Young, 196-197.
,86 Young, 198.
IS7Young,201-202.
188
Ibid.
18<1 Young, 210.
'90
Ibid.
'9'Young, 230.
192 As discussed in US Congress, House of Representatives, Committee on Foreign Affairs,
"Environmental Impact ofWorld Bank Lending (Vol. D," tor" Congress, r" Session , September
26,1989; "Environmental Impact ofWorld Bank Lending (Vol. Il)," October 4,1989; and Devesh
Kapur, John P. Lewis, and Richard Webb, The World Bank: Its First Half Century, VolumeI:
History(Washington, DC: Brookings Institution Press, 1997).
'93 The World Bank. A Guide tv The WorldBank, 10.
'94 UNICEF and the World Bank, State ofthe World 2002 in Black, 62.
'95 Weaver, 216- 219.
'<)6 Cunningham & Cunningham, 109. M angosteens have been called "the world's best-tasting
fruit," but they are virtually unheard ofoutside of the tropics where they naturally grow.
197 Wilson, 296. Wilson notes that green iguanas have been a traditional native food for 7,000 years.
117
'98 Chris Wille and Diane Jukofsky, "Savory 'Chicken of the Trees' Could Playa Role in Saving
Forests," Canopy(Rainforest Alliance), Summer [99[, 7 quoted in W ilson, 295-296.
F. French, ·1nvesting in the Future: Harnessing Private Capital Flows for
Environmentally Sustainable Development," World Watch Paper 139,1998,19-24.
2°OGosovic (1992) in Young, 21, called the IMF and World Bank 'the centre of institutional
power on the world development scene and the extension of the national policies and ideologies
of their major shareholders.' See also Young, 28.
101 The Yes Men, WTO, n.d., <htm:/Iwww.theyesmen.orglhiiinks/wto.shtml> (6 April 2007).
'99 Hilary
118
