Salient Institutional Issues
New Horizons in Environmental Economics series
Edited by Albert Breton, Giorgio Brosio, Silvana Dalmazzone and Giovanna Garrone
Chapter 3: Privatization and Environmental Governance
Marcia Valiante 1 INTRODUCTION The last two decades have witnessed a worldwide trend toward increased privatization of government assets and functions, including those linked to environmental protection. Privatization is occurring at all levels, from the global to the local, and is part of a larger package of ideas and practices associated with economic globalization and neo-liberalism, often referred to as the Washington Consensus. Yet, resistance to this consensus and to privatization is strong, resulting in deep tensions. Both popular and scholarly debates about privatization, including how and when to resort to it and its advantages and disadvantages, have become quite polarized, and it is difficult to filter out facts from rhetoric. It is also a debate embedded in the larger political discourse around globalization and its impacts. Privatization promises primarily economic benefits. Even when those benefits materialize for some, critics claim that detrimental social and environmental impacts are ignored or downplayed. Privatization also raises broad issues about the appropriate roles of government, business and citizens in pursuing public goals and providing public goods, the inclusion of public values such as democracy and equity in non-state governance, the impacts of globalization on sovereign states and their citizens, the need to ensure continued respect for constitutional and legal rights, and the link to decentralization of decision-making, among others. This chapter attempts to isolate the main issues from this larger debate that resonate within the environmental policy sector by looking at two case studies, privatization of water services and forest certification. The first...
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