This chapter explores the implications of political risk insurance (PRI) in the regulation and governance of natural resources sectors in developing countries. Operating in a hybrid public-private sphere, PRI arrangements involve a more complex web of contractual and non-contractual relations than commercial insurance products and parties to such arrangements are inserted into a much more intricate framework of legal and political governance, with correspondingly broader international and domestic implications. The chapter argues that PRI represents a form of government rationality that provides a framework for organizing and regulating the behaviour of actors involved in natural resource investments in developing countries. In natural resources projects where tensions regularly exist between the interests of the foreign investor, the host state and local communities, PRI arrangements can reframe the terms of engagement between these various stakeholders and redefine the host state’s engagement with the broader international community. Key words: community safeguards; governance; governmentality; international financial institutions; international investment law; natural resources; political risk insurance
Blended finance is the new catchphrase in international development cooperation. Referring broadly to financial instruments that combine public and philanthropic resources with private capital to support development and global public policy objectives, blended finance is deployed ostensibly to catalyse greater private capital flows to emerging and so-called ‘frontier’ markets through the public provision of financial incentives, such as subsidized loans, risk guarantees and co-financing, to private actors investing in developing countries. Proponents argue that blended finance is crucial to scaling up resources for sustainable development projects, including in agriculture, energy and climate change mitigation and adaptation, by mitigating risks, by lowering transaction costs and thereby increasing the commercial viability of such investments for private actors. This chapter examines the emergence of blended finance as mechanism for financing development and its implications for the international aid architecture and framework for international development cooperation. It argues that the growth of new public-private modalities of development financing, such as blended finance, is re-engineering the governance of international public finance at the global and domestic levels, involving a significant shift in the forms of public administration and governance in which crucial elements of public authority are being shared with a host of non-governmental and other-governmental actors. This increasing shift towards the so-called ‘privatization of aid’ necessarily entails a transformation in the modalities of public administration to accommodate these new forms of public goods provision and account for the new exercises of public authority by third party private actors. This, in turn, has implications for both the substantive outcomes of international development cooperation, such as food security, poverty reduction and environmental protection, and the governance and regulatory framework of international development cooperation that is crucial not only to the delivery of such outcomes, but to safeguarding the interests of stakeholders of sustainable development investments.
Edited by Celine Tan and Julio Faundez
Celine Tan and Julio Faundez
The current economic and ecological climate calls for a reappraisal of the international legal and political framework governing natural resources, defined broadly to include materials and organisms naturally occurring in the environment, such as water, mineral and fossil fuels, and cultivated resources, such as food crops, both renewable and exhaustible. This reappraisal is urgent because the governance and management of natural resources have formed a pivotal backdrop to the evolution of international economic law in the post-war period and have been critical components of the process of economic globalization. Contributors to this collection explore the different dimensions of natural resource governance in the contemporary economic, political and legal landscape. They reflect upon and address the different aspects of the conflicts and contradictions arising at the intersection between international economic law, sustainable development and other areas of international law, notably human rights law and environmental law.