| Publication |
2009.
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| Summary/Abstract |
Public financial institutions (PFIs) provide vital investment for poor countries, and act as catalysts for additional private capital. However, the projects thus financed often have social and environmental side effects. Safeguards systems control such side effects. This article compares the strength of PFIs' safeguards systems. Although the study uses financing for dams as an example, the issue has much larger applicability. In fact, all development project or policy interventions have social or environmental side effects and therefore necessitate safeguards. This article notably finds substantive evidence that safeguards performance substantially differs between different PFIs. It argues that the most important explanations for this finding are differences in coordination mechanisms among different PFIs, and diverging interest group pressure on different PFIs. Finally, the article explores several avenues for future work following from these findings, notably exploring steps to harmonize PFIs' safeguards performance.
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