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Factors of Sustainability Assessment

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For the wrong strategy (without appropriate share distribution or without securing the jobs).

For the wrong political consensus (political nonconcensus may result to political or social unrest in developing countries).

There are other factors such as lack of coordination and lack of monitoring that make the private motive too profit seeking, and thus environmental benefits through microeconomic adjustment may be lost. In these cases, public investment plays a key role to keep the private investment competitive and to keep the trend of coordination and monitoring perfect.

10.7.4 Influence of Public Investment

Public investment in the nonstrategic resource sector may be targeted to gear the dynamics of competitiveness of private investment and to increase social benefits through monitoring and coordination. Privatization may create sluggishness if public investment creates a monopoly on the resource sector. However, public investment may influence sustainability in developing countries due to following situations:

too large a public sector,

obscuring the relationship between private and public sector (e.g., budget leakage),

inefficient public sector (affected by strike).

However, if public investment is made for the benefit of people, it certainly will bring benefit. There are examples where public investment has done good, mainly stimulated by the participation of people. Other than this, there is every chance that public investment will be a reflection of colonial motive.

10.7.5 Influence of Economic Incentives

Economic incentives are treated as an instrument to increase the peoplesparticipation in the public sector. Incentives may also be used to increase the efficiency and competitiveness of the private sector. But if misplaced, such as for giving benefits to cronies, the economic incentives may be the potential reasons for resource degradation. Amelung (1991) identified that the major shift in forest land use change and forest degradation in tropical countries were due to economic incentives in the forms of concessions, subsidies, and cash crop conversion.