8. Financing for Development: Extra-Official Payments as Incentives for Development Projects

Using examples from the administrations of Rafael Correa in Ecuador 2007–2017, this chapter examines obstacles to the achievement of successful environmental and human rights governance, in the form of economic and technological dependency on foreign actors, and the associated practice of procurement incentives deriving from outside the country that result in decisions that may be detrimental to indigenous peoples’ wellbeing and protection of ecosystems. The construction of the Coca Codo Sinclair dam in Ecuador, completed in 2016, is one example of a centrally driven mega-development project which was designed and implemented with a disregard for social and environmental consequences. Poor decision-making in this and other cases may have been tied to hidden individual or political financial rewards. In view of the widespread use of shell companies in tax havens by government officials for the purposes of concealing irregular payments, a practice that undermines democratic principles and equitable governance, the chapter concludes with a review of existing and proposed measures for international cooperation to ensure transparency in local and cross-border financial transactions, which in the long term may contribute to more effective protection of indigenous cultures and the environment.