Policy innovation for sustainable development: the case of the Amazon Fund

For its “long, winding roads (Thanks, The Beatles!)” and unknown challenges, fostering sustainable and inclusive development requires new public intervention models. For that, the critical assessment of existing innovative policy experiments, their outcomes and determinants, is important not only to strengthen our knowledge base but also to inspire sound development-oriented policies, including green industrial policies. Based on an experimental analytical framework, this article analyses an original policy instrument in Brazil, the Amazon Fund (AF), during the 2008–2021 period. This article demonstrates that the Fund’s positive impacts on sustainable development are largely due to its three interconnected innovative dimensions (multistakeholder governance, donor-based pay-for-performance funding, and non-reimbursable financing of projects by the Brazilian Development Bank, BNDES). With hindsight, the article sheds light on the fundamental role of political decisions and the vital role played by different stakeholders in shaping or reversing the works of policy design, making, and implementation.