Credible Commitments and Environmental Aid

Donors may be allocating environmental aid in order to build capacity for environmental governance in countries where current capacity is low.

August 10, 2010


One of the surprising findings in Greening Aid: Understanding the Environmental Impact of Development Assistance was that, the greater a country’s participation in environmental treaties, the less environmental aid it received (controlling for a variety of other factors). This was surprising because the authors expected that recipient country credibility would influence allocation of environmental aid by donors. The basic idea: To achieve the greatest environmental benefit, donors ought to favor recipients who have a demonstrated commitment to environmental protection. Ratification of environmental treaties is one signal of such commitment. Recipients with little environmental commitment might implement projects poorly (or not at all). One possible explanation for this finding is that donors use environmental aid prospectively rather than retrospectively. In other words, donors allocate environmental aid in order to build capacity for environmental governance in countries where current capacity is low.

This reading of the evidence is supported by an intriguing new paper by Michaël Aklin and Johannes Urpelainen of Columbia University. In “The Domestic Preconditions for International Policy Diffusion: The Case of Environmental Ministries,” Aklin and Urpelainen examine how domestic variables and international factors have influenced the creation and diffusion of environmental ministries in countries across the globe. The authors argue that “developing countries have strong incentives to establish environmental ministries when they (i) are undergoing a democratic transition and (ii) the international salience of environmental problems is high.” Aklin and Urpelainen use AidData to calculate yearly flows of environmental aid, which is taken as a measure of the international salience of environmental problems. There isn’t space here to discuss the full range of empirical work that the authors present; I strongly encourage those who are interested in this field to read the entire paper. One especially interesting finding is that democratization and higher levels of environmental aid (measured as 3-year rolling averages) do make the creation of an environment ministry more likely. If environmental aid is given prospectively, to build capacity for environmental governance in recipient countries, this is exactly what we would expect to find. Democratization enhances overall prospects for capacity building, and environmental aid provides both incentive and resource for developing environmental institutions. Figure 8 shows how environmental aid and democratization interact to make the creation of an environmental ministry more likely.