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Economywide Policies and the Environment: Lessons from Experience
| Content Provider | Semantic Scholar |
|---|---|
| Author | Munasinghe, Mohan Cruz, Wilfrido |
| Copyright Year | 1995 |
| Abstract | Although economywide policies are not directed explicitly towards influencing the quality of the natural environment, they may, affect it for good or bad. Such policies include: altering exchange or interest rates, reducing government budget deficits, freeing markets, liberalizing trade, enhancing the role of the private sector, and strengthening institutions, often coupled with pricing and other reforms in key sectors such as industry, agriculture and energy. This paper relies on an empirical, country-specific approach to examine the links between economywide policies and the environment. The specific findings of this study are: 1) removal of price distortions, promotion of market incentives, and relaxation of other constraints, generally will contribute to both economic and environmental gains; 2) unintended environmental harm occurs when economywide reforms are undertaken while other neglected policy, market or institutional imperfections persist; 3) measures aimed at restoring macroeconomic stability will generally yield environmental as well as economic benefits, since instability undermines sustainable resource use; 4) the stabilization process also may have foreseen adverse short-term impacts on the environment; and 5) economywide policies will have additional longer term effects on the environment through employment and income distribution changes. These findings have relevance for decision making. Proper recognition of the generally positive environmental consequences of economywide policy reforms would help to build additional support for such programs. The following are immediate steps that can be taken by decision makers: 1) more systematic efforts are needed to monitor environmental trends and anticipate emerging problems, when policy reform proposals are being prepared; 2) serious potential environmental impacts of proposed economywide reforms should be carefully assessed, to the extent that data and resources permit; 3) where potential adverse impacts of economywide reforms can be identified and analyzed successfully, targeted complementary environmental policies or investments need to be implemented - to mitigate environmental damage; and 4) a follow up system for monitoring the impacts of economic reform programs on environmentally sensitive areas should be designed, and resources made available to address environmental problems that may arise during implementation. |
| Starting Page | 1 |
| Ending Page | 1 |
| Page Count | 1 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://documents.worldbank.org/curated/en/331501468765917402/pdf/multi-page.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
