The International Monetary Fund, World Bank, and Structural Adjustment: A Cross-National Analysis of Forest Loss

John Shandra, Stony Brook University, State University of New York (SUNY)
Eric Shircliff, Stony Brook University, State University of New York (SUNY)
Bruce London, Clark University

Traditional explanations view population growth as the primary cause of forest loss among poor nations. However, such explanations tend to ignore how trade policies affect the environment. We seek to address this gap in the literature by testing competing hypotheses drawn from dependency theory and neo-liberal economic 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-one 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 other factors help to explain deforestation. These include non-governmental organizations, population growth, democracy, data quality, and tropical climate. We conclude with a discussion of the findings, theoretical implications, methodological implications, policy implications, and possible directions for future research.