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Economic Incentive to Ignore the Environment

Economic Incentive to Ignore the Environment The world environmental regime has influenced government policy and improved environmental conditions around the globe, but its influence on governance is sometimes decoupled from, or loosely connected with, actual practice. This article examines the influence of the environmental regime on foreign aid and proposes that economic incentive, in the form of FDI, is a source of decoupling between aid donors’ stated environmental goals and actual aid commitments. Using a three-dimensional panel design (donor × recipient × year), I test allocations of environmental protection and fossil fuel aid in a two-stage process where first the aid recipient is chosen, and then the aid amount. I find that although donor and recipient environmental regime integration are associated with higher likelihood of exchanging environmental aid, other factors (donor/recipient GDP, recipient democracy, etc.) determine the amount of aid. Regime integration does not reduce the likelihood of exchanging fossil fuel aid, but donor regime integration is associated with giving less fossil fuel aid, contingent on the donor’s level of FDI in the recipient nation. I conclude that the world environmental regime and the global economy exert contradictory pressures on aid organizations that result in policy–practice decoupling. The world environmental regime, therefore, has only been partially successful in improving foreign aid, and its effect is constrained by donors’ economic incentive to ignore environmental norms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Sociology of Development University of California Press

Economic Incentive to Ignore the Environment

Sociology of Development , Volume 7 (1): 21 – Mar 1, 2021

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References (78)

Publisher
University of California Press
Copyright
© 2021 by the Regents of the University of California
eISSN
2374-538X
DOI
10.1525/sod.2021.7.1.77
Publisher site
See Article on Publisher Site

Abstract

The world environmental regime has influenced government policy and improved environmental conditions around the globe, but its influence on governance is sometimes decoupled from, or loosely connected with, actual practice. This article examines the influence of the environmental regime on foreign aid and proposes that economic incentive, in the form of FDI, is a source of decoupling between aid donors’ stated environmental goals and actual aid commitments. Using a three-dimensional panel design (donor × recipient × year), I test allocations of environmental protection and fossil fuel aid in a two-stage process where first the aid recipient is chosen, and then the aid amount. I find that although donor and recipient environmental regime integration are associated with higher likelihood of exchanging environmental aid, other factors (donor/recipient GDP, recipient democracy, etc.) determine the amount of aid. Regime integration does not reduce the likelihood of exchanging fossil fuel aid, but donor regime integration is associated with giving less fossil fuel aid, contingent on the donor’s level of FDI in the recipient nation. I conclude that the world environmental regime and the global economy exert contradictory pressures on aid organizations that result in policy–practice decoupling. The world environmental regime, therefore, has only been partially successful in improving foreign aid, and its effect is constrained by donors’ economic incentive to ignore environmental norms.

Journal

Sociology of DevelopmentUniversity of California Press

Published: Mar 1, 2021

Keywords: foreign aid; foreign direct investment; world society; fossil fuels; environment; development aid; decoupling

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