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Limits to learning: when climate action contributes to social conflict

REDD+, or Reducing Emissions from Deforestation and forest Degradation, has been one of the holy grails of international efforts to combat climate change for the past 10 years: over 10 billion dollars have been pledged to this cause by donor countries. Although REDD+ aims to reduce deforestation rates while increasing the welfare of landowners, research has shown that it also negatively impacts indigenous communities and has contributed to conflict. While hard work has been done to improve REDD+ programs, there are serious unintended effects of this much needed climate change action program. We wondered if organizations will do something about these unintended effects and would like to stimulate debate on that. We found that there are limits to what they learn: some unintended effects are likely to persist.

The REDD+ programmes, developed by the United Nations, use a payment for environmental services (PES) approach to support developing countries in creating more sustainable land use models. The idea behind this is that landowners move away from traditional land use methods that deplete forests and hence exhaust their capacity to absorb CO2. In turn, they receive monetary and other incentives that make up for loss of income and enable them to work towards more sustainable land use.

However, a disturbing number of “unintended consequences” results from these programmes. Such consequences do not necessarily relate to the initial goals of the programme: it can for example achieve great results in forest preservation and poverty alleviation; yet be only accessible to those who officially own the land. Thereby it excludes the poor residents for whom the programme was initially intended. Importantly, because these effects fall outside the scope of the programmes, they are not always taken into consideration when it comes to measuring impact.

In the past years, researchers found such effects on both the forest preservation and social impact fronts. Now, determining that some bear the brunt of well-intended efforts to tackle climate change is one thing. The next question, however, is crucial: will implementers be able to learn from their mistakes? Are the unintended consequences that have been seen in the past years avoidable, and does REDD+ hence have the potential to be for instance truly inclusive and conflict-sensitive?

Will programme implementers learn from their mistakes?

The answer is, as always: it depends. Reasons for not learning from unintended effects are partly technical: for example, the difficulty to measure the actual deforestation rates or the forests that are “saved” as a direct result from the project (the so-called displacement effect). With better measurement techniques, experts expect that these issues can be overcome in the near future.

However, the unintended consequences of REDD+ that are social in nature are a completely different ball game. These include for example the discrimination of indigenous peoples and their ancestral ways of living and working the land; the exclusion of many rural poor because they do not have official land titles; the exclusion of women for the same reason; or the rising of social tensions in communities, or between communities and authorities.

Organizations which implement REDD+, such as the World Bank and the Green Climate Fund, are aware of these unintended consequences and have put measures in place to anticipate and regulate them. These “social and environmental safeguards” should prevent discrimination as a result from the programmes. Moreover, grievance redress and dispute settlement mechanisms are in place to serve justice to those who have been harmed or disadvantaged regardless.

Despite these systems and regulations, World Bank and GCF employees explain that they are struggling with managing these unintended consequences, and that it is difficult to satisfy everyone’s needs while still achieving results on the deforestation front. The dilemma they face is clear: the more time, effort and money is spent to anticipate all possible unintended consequences, the less money and time is left to use for the implement the climate change programming, and time is ticking.

Ideological limits to learning

Donors who fund the programmes appear sometimes more concerned by just increasing disbursement rates, to show they are active in the fight against climate change, than fully taking note and acting on the collateral social damage. With more pressure from civil society, donors and organizations are likely to also take more of the social factors on board, for example through the safeguard system. However, there appears to be one major blind spot, on which little learning is taking place.

To our surprise, the most encountered unintended effects are the so-called motivational crowding out effects. Time and again, it was found that, while people were initially quite concerned about the forest and finding ways to preserve it, their intrinsic motivation to do so declined when monetary rewards were offered. The neo-liberal model of putting a price on everything might work on the short run, but appears to contribute to an erosion of conservation values in the long run. So, taking stock of collateral damage, this might be one of the most unexpected ones we encountered. And unfortunately, it goes against the very ideological basis of the PES approach. Currently, we also found little action by organizations and donors to deal with this unintended effect. An ideological limit to learning appears to be in place here.

Yet, we are still hoping that climate justice can be achieved. That green objectives can be combined with social justice objectives. We invite you to share your abstracts with us for the panel we are organizing at the EADI conference in 2020. The deadline is on December 15. If you would like to read more background information on this topic, you are welcome to consult our working paper.

About the authors:

pasfoto DJ Koch

Dirk-Jan Koch is Professor (special appointment) in International Trade and Development Cooperation at the Radboud University in Nijmegen, and Chief Science Officer of the Netherlands Ministry of Foreign Affairs. His latest publications include Is it time to ‘decolonise’ the fungibility debate? (2019, Third World Quarterly, with Zunera Rana) and Exaggerating unintended effects? Competing narratives on the impact of conflict minerals regulation (2018, Resources Policy, with Sara Kinsbergen).Pasfoto.jpg


Marloes Verholt is researcher at the Radboud University Nijmegen. She researches the unintended effects of international climate policy. With a background in conflict analysis and human rights work, she views the climate change debate through these lenses.

COVID-19 | Ecuador, COVID-19 and the IMF: how austerity exacerbated the crisis by Ana Lucía Badillo Salgado and Andrew M. Fischer

Ecuador is currently (as of 8 April) the South American country worst affected by COVID-19 in terms of the number of confirmed cases and fatalities per capita. While even the universal health systems of Northern European countries are becoming severely frayed by the nature of this pandemic, Ecuador serves as a powerful example of how much worse the situation is for many low- and middle-income countries, particularly those whose public health systems have already been undermined by financial assistance programmes with international financial institutions (IFIs). The IMF and other IFIs such as the World Bank must acknowledge the role they have played and continue to play in undermining public health systems in ways that exacerbate the effects of the pandemic in many developing countries.

The recent IMF Extended Fund Facility (EFF) Arrangement, signed in March 2019 with the Government of Ecuador, was already the subject of massive protests in October 2019 given the austerity and ‘structural reforms’ imposed on the country (aka structural adjustment). It has also directly contributed to the severity of the pandemic in this country given that health and social security systems were among the first casualties of the austerity and reforms. In particular, the government’s COVID-19 response has been severely hindered by dramatic reductions of public health investment and by large layoffs of public health workers preceding the outbreak of the virus.

From this perspective, even though the IMF has recently moved to offer finance and debt relief to developing countries hit by the COVID-19 pandemic, a much more serious change of course is needed. For this, it is vital to understand its own role ­– and that of other IFIs such as the World Bank – in undermining health systems before the emergence of the pandemic in various developing countries, lest similar policy recipes are again repeated.

The baseline

It is clear that the pre-existing national healthcare system in Ecuador has been replete with problems even in ‘normal’ times. As in most of Latin America, the weaknesses of the healthcare system in Ecuador stem from its segmented and stratified character, with a distinct segregation between three main subsectors – the public, social security, and private sectors. The Ecuadorian Ministry of Health has a weak coordinating and regulatory role over these three subsectors, each of which caters to different beneficiary populations and with clearly distinct quality of services. The public system is the lowest quality and the one accessed by most poor people. Despite claims of universal health, the national system is a far cry from anything approaching genuine universalism.

Moreover, there has been a progressive privatization and commodification of healthcare since 2008. For instance, the building of capacity within the social security system has been undermined by the channelling of health funding via contracts to the private sector, where pricing is also mostly unregulated [1]. More generally, Ecuador has consistently exhibited one the highest out-of-pocket (OOP) health expenditure shares in South America, despite a government discourse and constitutional mandate to deliver free, high quality, public healthcare for all citizens. OOP payments – or direct payments by users at the point of service – reached 41.4% per total health spending in 2016 [2]. They include, for instance, payments for medicine or medical supplies by poor people in public hospitals, as well as payments by middle- and upper-class people for consultations and surgeries. The COVID-19 crisis puts pressure on precisely these aspects of healthcare provisioning, rendering the system prone to systemic failure for the majority of the population, especially in times of economic crisis when the ability of users to pay is severely curtailed.

Crisis and IFIs

These problems in the healthcare system have been exacerbated by the austerity measures of the current government of Lenín Moreno. The measures were introduced in the context of the protracted economic crisis that started in 2014 and have been endorsed by the IMF and other IFIs. Public health expenditure plateaued at 2.7% of GDP in 2017 and 2018, and then fell slightly to 2.6% in 2019, when GDP also slightly contracted (see figure). This was despite the constitutional goal that established an increase of at least 0.5% of GDP per year until 4% was to be reached, which is still far below the 6% of GDP recommended by the Pan American Health Organization [3].


Source: elaborated from the Fiscal Policy Observatory data (last accessed 7 April 2020 at https://www.observatoriofiscal.org/publicaciones/transparencia-fiscal/file/221-transparencia-fiscal-no-163-marzo-2020.html)
* The main component of this expenditure is on non-contributory social protection (social cash transfers).
** It excludes health expenditure of the social security system.

However, the collapse in public investment in the health sector has been far more dramatic, falling by 64% from 2017 to 2019, or from USD 306 million in 2017 to USD 110 million in 2019 [4]. Such reductions would have been largely borne by the public health system and constitute expenditures that are vital for a COVID-19 response, such as the construction of hospitals and the purchase of medical equipment.

It was in this context that the IMF Extended Fund Facility (EFF) was agreed and signed in March 2019. Within the framework of this programme, the government implemented a large layoff of public healthcare workers (including doctors, nurses, auxiliary nurses, stretcher-bearers, social workers, and other healthcare workers). The layoffs continued throughout 2019, despite protests by the National Syndicate of Healthcare Workers of the Ministry of Health [5], [6], [7]. It is difficult to know the exact number of layoffs because of the fragmented functioning of the health system, although within the Ministry of Public Health alone, 3,680 public health workers were laid off in 2019, representing 4.5% of total employment in this Ministry and 29% of total central government layoffs in that year [calculated from 8]. Similar reductions in the social security sector were announced in 2019 for 2020, although we have not yet been able to find any data on these reductions.

Thus, it is not a surprise that Ecuador is currently doing so poorly in handling the COVID 19 crisis. The retrenchment of the public health system together with an already weak and retrenched social protection system coupled for the perfect storm. But even more worrying is that, in the face of the pandemic, the government paid 324 million USD on the capital and interest of its sovereign ‘2020 bonds’ on 24 March instead of prioritizing the management of the health crisis. This decision was taken despite a petition on 22 March by the Ecuadorean assembly to suspend such payments, along with a chorus of civil society organizations lobbying for the same [9] [10]. The government nonetheless justified the payment as a trigger for further loans from the IMF, World Bank, Inter-American Development Bank, and Andean Financial Corporation [11]. This is especially problematic given that Ecuador has been hard hit by the collapse of oil prices and, as a dollarized economy, its only control over money supply and hence hope for economic stimulus rests on preventing monetary outflows from the economy (and encouraging inflows).

The payment is also paradoxical given that the IMF and the World Bank are currently calling for the prioritization of health expenditure and social protection and for a standstill of debt service, and have announced initiatives for debt relief and emergency financing [12] [13]. Nonetheless, despite such noble rhetoric, it appears that the precondition for such measures continues to be the protection of private creditors over urgent health financing needs.

Atoning for past and present sins on the path to universalism

The COVID-19 pandemic undoubtedly exposes the inadequacies of existing social policy systems in developing countries and the urgent need of moving towards more genuinely universalistic systems. Ecuador is exemplary given that it has until recently been celebrated as a New Left social model even while its national health system has remained deeply segregated and increasingly commodified.

However, while the IMF and other IFIs have emphasised the importance of placing health expenditures in developing countries at the top of the priority list in the context of the COVID-19 pandemic [12], they have not acknowledged their own continuing roles in undermining these priorities. Indeed, their messaging is often contradictory, given that both the IMF and the World Bank have also repeatedly insisted that developing countries must persist with ‘structural reforms’ during and after the pandemic [13] [14]. In other words, there is no evidence that the course has been reset. As one way to induce a reset, it is important that they acknowledge the roles they have played and continue to play in undermining public health systems and universalistic social policy more generally, lest they continue to repeat them despite the switch to more noble rhetoric.

[1] http://cdes.org.ec/web/wp-content/uploads/2016/01/privatizaci%C3%B3n-salud.pdf
[2] https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)30841-4/fulltext
[3] https://www.cepal.org/es/publicaciones/45337-america-latina-caribe-la-pandemia-covid-19-efectos-economicos-sociales
[4] https://coyunturaisip.wordpress.com/2020/03/28/los-recortes-cobran-factura-al-ecuador-la-inversion-en-salud-se-redujo-un-36-en-2019/
[5] https://www.eluniverso.com/noticias/2019/03/06/nota/7219694/trabajadores-publicos-salud-denuncian-despidos-masivos
[6] https://www.elcomercio.com/actualidad/recorte-personal-contratos-ocasionales-ecuador.html
[7] https://www.elcomercio.com/actualidad/despidos-trabajadores-ministerio-salud-evaluacion.html
[8] https://www.observatoriofiscal.org/publicaciones/estudios-y-an%C3%A1lisis/file/220-n%C3%BAmero-de-servidores-p%C3%BAblicos-del-presupuesto-2018-2019.html
[9] https://www.elcomercio.com/actualidad/asamblea-suspender-pago-deuda-coronavirus.html
[10] https://ww2.elmercurio.com.ec/2020/03/24/la-conaie-pide-al-gobierno-suspender-el-pago-de-la-deuda-externa/
[11] https://www.bourse.lu/issuer/Ecuador/34619 (first link under the notices section)
[12] https://www.imf.org/en/News/Articles/2020/04/03/vs-some-say-there-is-a-trade-off-save-lives-or-save-jobs-this-is-a-false-dilemma
[13] https://www.worldbank.org/en/news/speech/2020/03/04/joint-press-conference-on-covid-19-by-imf-managing-director-and-world-bank-group-president
[14] https://www.worldbank.org/en/news/speech/2020/03/23/remarks-by-world-bank-group-president-david-malpass-on-g20-finance-ministers-conference-call-on-covid-19

This article is part of a series about the coronavirus crisis. Read all articles of this series here.

About the authors:

Ana LucíaAna Lucía Badillo Salgado is a PhD researcher at the ISS focusing on the political economy of social protection reforms in Ecuador and Paraguay, in particular the role of external actors in influencing social policymaking. She is also a Lecturer at Leiden University College. mug shot 2

Andrew M. Fischer is Associate Professor of Social Policy and Development Studies at the ISS and the Scientific Director of CERES, The Dutch Research School for International Development. His latest book, Poverty as Ideology (Zed, 2018), was awarded the International Studies in Poverty Prize by the Comparative Research Programme on Poverty (CROP) and Zed Books and, as part of the award, is now fully open access (http://bora.uib.no/handle/1956/20614). Since 2015, he has been leading a European Research Council Starting Grant on the political economy of externally financing social policy in developing countries. He has been known to tweet @AndrewM_Fischer