Policy Innovation for Sustainable Development: The Case of the Amazon Fund

For its long, winding roads and unknown challenges, fostering sustainable and inclusive development requires new public intervention models. Critically assessing existing innovative policy experiments, their outcomes and determinants, is important not only to strengthen the knowledge base but also to inspire sound development-oriented policies, including green industrial policies. A tide of change in analytical and policy narratives demonstrating the pertinence of state intervention is related to a number of different factors, but climate change almost unanimously comes to the fore as a sufficient and strong reason behind the calls for decisive public action.

A new journal article in the Review of Evolutionary Political Economy by Luma Ramos, João Carlos Ferraz and Juliana Santiago analyzes the operations of an original policy instrument in Brazil, the Amazon Fund, from 2008-2021. The Amazon Fund, a partnership between the Brazilian administration and international and national donors, is aimed at reducing carbon emissions from deforestation and fostering a productive, resilient and inclusively-oriented economy in the Amazon Region.

The article demonstrates that the Amazon Fund is a successful case of an innovative and effective productive development policy. The positive contributions of the Amazon Fund to the Amazon region’s sustainable development rely on the Fund’s three interconnected innovative dimensions: a multi-stakeholder governance, a donor-based pay-for-performance funding and a non-reimbursable financing of projects. The authors place considerable emphasis on the political dimension of policymaking by demonstrating the fundamental role of political decisions and the vital role played by different stakeholders in shaping and/or reversing the works of policy design, making and implementation.