Evaluating Monetary-Based Benefit-Sharing as a Mechanism to Improve Local Human Development and its Importance for Impact Assessment of Hydropower Plants in Brazil

Abstract

Although hydropower companies and governments have promoted monetary-based Benefit-Sharing Mechanisms alone as a vector of local development for flooded municipalities, it is not possible to identify this evidence in the scientific literature. The present work investigates the quantitative influence of Financial Compensation on Human Development Indexes (HDI) in flooded municipalities over 2000–2010. The econometric analysis shows that there are no statistically significant results related to the quantities of Financial Compensation and the development variables. The findings reinforce that Financial Compensation itself could not be considered the only input to improve development processes. Management frameworks should be considered since they can provide a broader view of the affected areas, including elements such as participatory processes, adaptation management, formal and legal guidelines and stakeholder engagement. Specially in the Brazilian case, the Impact Assessment procedures and their products could provide detailed data and criteria to municipalities to manage the inflow resources.