Transnational Markets for Sustainable Development Governance: The Case of REDD

Jespersen, K.; Gallemore, Caleb

Transnational Markets for Sustainable Development Governance: The Case of REDD

Abstract

Transnational sustainable development that is, sustainable development policy initiatives involving actors in multiple countries often involves donor sponsorship of sustainable development projects, similar to matching markets like venture capital, employment searches, or college admissions. These transaction systems, also known as matching markets, can be seen in a variety of phenomena in transnational development governance, including private aid, public private sustainable development projects, and transnational polycentric governance initiatives. In this paper, we utilize the matching market framework to develop a new approach to addressing an important question in development studies: how do donors (understood as donor agencies, funds and foundations, and firms) choose which projects to support? Beginning with the observation that matching markets in sustainable development governance are heavily constrained by transaction costs in the absence of formal institutions that lower costs of searching, monitoring, and communicating with potential partners, we hypothesize that both donors and project participants are motivated to utilize strategies to lower transaction costs of making connections, which results in selection of projects based on the presence of transnational brokers or familiar partners or as part of a strategy of spatial specialization. Conceptualizing the choices made in this matching market as an affiliation network connecting donors to sponsored projects, we utilize exponential random graph models of 91 funders' support of 195 Reducing Emissions from Deforestation (REDD+) and sustainable forest management pilot projects undertaken between 1989 and June 2012 to test the effects of transaction costs on donors' choices of projects to sponsor. We find that brokerage, prior collaboration with the donor in question, and spatial specialization all contribute to the ability of project proponents to attract funder support, often outperforming relevant project characteristics such as carbon density and accessibility. These findings suggest tensions between local scale project implementation and the transnational search for resource support observed qualitatively in the development studies literature can have significant effects on the overall structure of transnational collaboration on sustainable development.

Title	Transnational Markets for Sustainable Development Governance: The Case of REDD
Creator	Jespersen, K.
Creator	Gallemore, Caleb
Publisher	World Development
Academic Department	International Affairs
Division	Social Sciences
Organization	Lafayette College
Date Issued	October 2016
Date Available	2018-12-20T21:56:56Z
Type	Article
Language	English
Keyword	governance
	networks
	transaction costs
	matching markets
	REDD
Bibliographic Citation	Gallemore, C. and K. Jesperson (2016 Oct) "Transnational Markets for Sustainable Development Governance: The Case of REDD." World Development 86: 79-94.
Standard Identifier	Handle 10385/2490
Standard Identifier	DOI 10.1016/j.worlddev.2016.06.009
Permalink	http://hdl.handle.net/10385/2490
Rights Statement	In Copyright
Rights Holders	Elsevier Ltd.