Transnational Activist Networks and Rising Powers: Transparency and Environmental Concerns in the Brazilian National Development Bank

Abstract

This article studies how transnational advocacy networks can influence international development finance. Transnational activists shaped the World Bank's lending by increasing its transparency and limiting its socio-environmental impacts. Developing countries can now look towards rising-powers' national development banks to finance their infrastructure and energy projects. The national development banks' weak transparency and socio-environmental standards pose a new challenge for transnational activism. Can activists leverage strategies used in World Bank reform to influence emerging power national development banks? We argue that whether a target is a supranational or national institution shapes the deployment and effectiveness of the strategies activists can use for influence. A supranational mandate and structure facilitates the deployment and effectiveness of a direct strategy focused on the transnational level, targeting the bank itself, and an indirect strategy focused on the national contexts of the bank's shareholders and borrowers. In contrast, a national mandate and structure encourages activists to deploy influence strategies solely in the context of the lending state. They furthermore make indirect strategies more effective than direct ones. We illustrate our argument by exploiting variation in the success across campaigns of a transnational network created to reform the Brazilian National Development Bank.

South–South Transnational Advocacy: Mobilizing Against Brazilian Dams in the Peruvian Amazon

“…This finding supports previous findings on the weak influence environmental activists have had on BNDES' lending policy (Sierra and Hochstetler 2017). However, as noted, the CAH campaign contributed to the creation of a BNDES-focused SSTAN, the Regional Coalition for Transparency and Participation, which has made some modest inroads toward pressuring BNDES to adopt transparency standards (Sierra and Hochstetler 2017). What is more, this SSTAN has since begun to liaise with Indian and Chinese advocacy networks seeking to make similar inroads with their countries' globalized national development banks (Regional Coalition for Transparency and Participation 2014).…”

“…25 Despite its achievements with the first two targets, CAH had no impact on BNDES policy or behavior. This finding supports previous findings on the weak influence environmental activists have had on BNDES' lending policy (Sierra and Hochstetler 2017). However, as noted, the CAH campaign contributed to the creation of a BNDES-focused SSTAN, the Regional Coalition for Transparency and Participation, which has made some modest inroads toward pressuring BNDES to adopt transparency standards (Sierra and Hochstetler 2017).…”

“…Importantly, the BRICS' use of national financial institutions and corporations domiciled within these states has prohibited activists from leveraging global socioenvironmental standards against the agents of South-South development projects. For instance, multilateral development banks (e.g., World Bank) can act as crucial levers for socioenvironmental campaigners in the South (Keck and Sikkink 1998;Park 2005), as their internal organizational structure enables activists to influence their lending mandates (Sierra and Hochstetler 2017), which can be used to ensure that actors adhere to dominant global standards, such as prior consultation. This capacity to leverage targets indirectly from outside and above rests fundamentally on the structural power multilateral lenders exert over the recipients of development finance.…”

“…However, a notable feature of South-South development cooperation involving the BRICS has been their use of "globalized" national development banks to supply finance for megaprojects abroad. These banks uphold markedly lower socioenvironmental standards than their multilateral counterparts (Sierra and Hochstetler 2017). Their primary loan conditionality is that recipients source the goods and services for proposed projects from lending country operators.…”

“…Between 2004 and 2015, BNDES loans doubled as it stepped in to fund many socially and environmentally risky projects rejected by the World Bank. Sierra and Hochstetler (2017) argue that BNDES has driven a "race to the bottom." 10.…”