The International Monetary Fund, World Bank, and structural adjustment: A cross-national analysis of forest loss

Abstract

We test competing hypotheses drawn from neo-liberal economic theory and dependency theory regarding the effects of International Monetary Fund and World Bank structural adjustment on deforestation. In doing so, we analyze cross-national data for a sample of sixty low and middle income nations from 1990 to 2005. We find substantial support for dependency theory that both International Monetary Fund and World Bank structural adjustment lending are associated with higher rates of forest loss. We also find that a number of factors linked to other theoretical perspectives help to explain deforestation. These include non-governmental organizations, gross domestic product per capita, economic growth, primary sector economic activity, democracy, total population growth, non-dependent population growth, rural population growth, urban population growth, tropical climate, and natural forest stocks. We conclude with a discussion of the findings, theoretical implications, methodological implications, policy implications, and possible directions for future research.