Greenwashing or Mainstreaming? New Measures of Environmental Rhetoric and Funding at the World Bank

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Original Publication Date

September 1, 2009

Authors

Ryan Powers, J. Timmons Roberts, Michael J. Tierney

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Abstract

Recent improvements in the quantity and quality of data available on World Bank development projects allow us to more accurately assess whether the Bank has “mainstreamed” environmental concerns into the IBRD/IDA portfolio. We argue that project-level budgets provide a more valid and accurate measure of environmental spending than traditional portfolio-level or project description-level measures of environmental spending at multilateral development banks. We construct an original dataset of all World Bank project documents with budgets from 1994-2007 and employ a principal-agent model to empirically test the “greenwashing” hypothesis. We find that the Bank has not increased mainstreamed environmental funding levels despite the approval of the Bank’s first official environment strategy in 2001. At the same time, we find that the Bank’s institution-level environmental rhetoric increased significantly during the study period. Nevertheless, at an operational-level, we find that when the Bank talks more about the environment, they spend more money on the environment.