State Capacities and Payment for Environmental Services in Brazilian Municipalities

Payments for Environmental Services (PES) aim to promote environmental conservation and recovery through economic incentives. Although PES are widely recognized in the literature as a promising environmental policy instrument, their implementation in Brazil remains limited, with programs present in only 15% of Brazilian municipalities in 2020. This gap between theoretical recognition and practical adoption can be explained by variations in state capacities, understood as central to the formulation, implementation, and long-term sustainability of public policies. The objective of this study is to examine whether the state capacity increases the odds of Brazilian municipalities adopting PES initiatives. To this end, we examined the relationship between state capacities and the existence of PES initiatives in Brazilian municipalities, based on data from the Municipal Information Survey conducted by the Brazilian Institute of Geography and Statistics (IBGE) in 2012, 2017, and 2020. The empirical analysis combines descriptive statistics and logistic regression, supporting the core hypothesis that both technical–administrative and political–relational capacities increase the odds of municipal PES creation. By contrast, environmental, geographic, and demographic variables play a secondary role. These findings confirm that PES adoption is a governance challenge rather than a purely ecological or market-driven process.