Multilateral development banks and environmental management

This article aims to review the increased attention and initiative which the multilateral development banks (MDBs)—more specifically the World Bank and Asian Development Bank (ADB) —have taken in recent years with respect to environmental concerns. Although the MDBs made some responses to environmental concern during the 1970s and 80s, until the late 1980s the resources devoted to this area were rather limited, and the banks came under increasing criticism for their lack of more substantial commitment. Since 1988 fundamental staffing and structural changes have brought environmental considerations, both into the evaluation of all project proposals and also as an approach to planning in its own right. There is still much uncertainty regarding the appropriateness of various techniques available to improve environmental management in developing countries. The article reviews the potential use of economic instruments, ‘command and control’ regulatory approaches, and the importance of macroeconomic policy as determinant of the success of environmental programmes. Developing country governments are increasingly prioritizing the environment, and bank efforts are currently focusing heavily on programmes that address poverty and the environment simultaneously. But it will be necessary to carry out adequate research, monitoring and evaluation of current programmes if these are to progress satisfactorily.