WHEN CRISIS KNOCKS: RETRENCHMENT AND RESILIENCE OF PAYMENTS FOR ENVIRONMENTAL SERVICES (PES)

Abstract

This article aims to discuss the retrenchment strategies employed in two of Brazil's leading payment for environmental services programs, Bolsa Floresta and Bolsa Verde. The goal is to identify the reasons behind the endurance of the former and the dissolution of the latter. In general, the study frames the transformations in Bolsa Floresta and Bolsa Verde at two distinct levels: the role of legal and fiscal centralization in each program for budget cuts during years of economic crisis and the drift mechanisms since the inception of public policies. These issues are also assessed in light of the institutional changes that occurred during the transition from the Dilma government to the Temer government. As a result, we find that the creation of a dedicated bureaucracy whose sole purpose was to finance the program was crucial for Bolsa Floresta's sustainability during a severe economic and political crisis. Nevertheless, both programs underwent different retrenchment strategies since their creation, which were intensified in 2014 and 2015. Finally, we highlight the main vulnerability aspects of Bolsa Verde and Bolsa Floresta regarding retrenchment and propose potential paths for further research.