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OPERATIONS EVALUATION DEPARTMENT
ENHANCING DEVELOPMENT EFFECTIVENESS THROUGH EXCELLENCE AND INDEPENDENCE IN EVALUATION
The Operations Evaluation Department (OED) is an independent unit within the World Bank; it reports directly
to the Bank's Board of Executive Directors. OED assesses what works, and what does not; how a borrower plans
to run and maintain a project; and the lasting contribution of the Bank to a country's overall development. The
goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the
Bank's work, and to provide accountability in the achievement of its objectives. It also improves Bank work by
identifying and disseminating the lessons learned from experience and by framing recommendations drawn from
evaluation findings.



WORLD BANK OPERATIONS EVALUATIONK DEPARTMENT  CNTDE
"T
Bridging
Troubled Waters
Assessing the World Bank
Water Resources Strategy
George Keith Pitman
2002
THE WORLD BANK  RO
http://www.worldbank.org/oed   Washington, D.C.



© 2002 The International Bank for Reconstruction and Development / The World Bank
1818 H Street, NW
Washington, DC 20433
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Manufactured in the United States of America
First Printing June 2002
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' # Printed on Recycled Paper



I      -'I
Contents
vii           Acknowledgments
ix            Foreword, Pr6logo, Avant-Propos
xvii          Executive Summary, Resumen, Resume Analytique
xxvii         Abbreviations and Acronyms
1             1. The 1993 Strategy-Still Relevant Today
1 A Strategy Was Overdue
2 The Bank Strategy
2 Strategic Approach to Equitable and Sustainable Water Management
4 New Approaches and Initiatives Are Even More Critical Today
7             2. The Bank's Water Assistance and Portfolio
7 Different Countries Present Different Challenges
8 The Mix of Instruments Has Changed
10 A Larger Portfolio Whose Quality Has Improved, Albeit Unevenly
12 The Poverty Focus of Water Operations Is Getting Better
15            3. The Water Strategy Has Been Only Partially Implemented
15 Treatment of Water Issues in CASs Has Been Weak
16 Projects Have Become More Responsive to the Strategy
17 Regions Have Pursued Different Approaches to Comprehensive Water
Management
18 As Have Subsectors
21 Water Projects Tackle Environmental Issues from Different Fronts
22 Compliance with Safeguards Is Demanding
23 Addressing Institutional Concerns by Involving Stakeholders and the
Private Sector
25 Pricing Promotes Efficiency and Conservation, but There Are Few
Successful Examples
26 The Bank's Effectiveness on Key Strategy Elements Varies Widely



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
29            4. Why It's Difficult to Get Good Results
29 Comprehensive Water Management Is Inherently Difficult
30 International Water Cooperation Is Essential but Controversial
31 Water Is Not Seen as an Important Economic Resource
31 Transforming Strategy into Action Is Difficult
32 Detailed Guidelines Have Been Lacking
32 Selectivity and Good Management Are Important
32 Seven Ways to Improve Results
37            5. Improving Bank Management and Internal Incentives
38 The Bank Is Poorly Organized to Implement the Water Strategy
39 But Successful Institutional Approaches Are Evolving
39 Staff Resources Are Stretched Too Thinly
39 External Stakeholders Also See Problems
40 Better Guidelines Are Needed
41            6. Recommendations
Annexes
43 Annex A: World Bank Operational Policy 4.07, Water Resources
Management
45 Annex B: Methodology
53 Annex C: Sector Performance-Recovering from a Troubled Past
59 Annex D: Assessing Water Project Design Utilizing the Water Policy
Matrix Development for the Bank's 1993 Water Strategy Paper
79 Annex E: Social Development Dimensions of Bank-Financed Water
Sector Projects
91 Annex F: Resettlement in Bank Water Projects-Results from a Random
Sample of 108 Water Projects
93 Annex G: Water Resources Management Policy Questionnaire to Bank
Staff
101 Annex H: The Difficulties of Integrated River Basin Management
105           Endnotes
109           Bibliography
Text Boxes
2 Box 1.1: The Dublin Guiding Principles on Water
22 Box 3.1: World Bank Safeguard Policies
Text Figures
3 Figure 1.1: Water Availability Continues to Decline in Developing
Countries
4 Figure 1.2: A Comprehensive Framework for Water Management
9 Figure 2.1: ESW Is Responsive to the Water Strategy
11 Figure 2.2: The Upward Trend in Bank Lending for Water May Be Over
11 Figure 2.3: Lending for Water Has Been Concentrated in Relatively Few
Countries
12 Figure 2.4: Lending to the Traditional Water Sectors Has Declined Since
the 1993 Strategy
13 Figure 2.5: Inclusion of Social Development and Poverty Concerns in
Water Projects Has Been Increasing
iv



Contents
16 Figure 3.1: Improving Responsiveness to the Water Strategy
17 Figure 3.2: Post-Strategy Operations Are Still Focused on Projects
18 Figure 3.3: Comprehensive Coverage of National and River Basin
Strategy Elements Varies by Region
19 Figure 3.4: Level of Effort in 1993-99 Differs by Region
19 Figure 3.5: Comprehensive Water Management of Projects by Subsector
20 Figure 3.6: Subsectoral Compliance with the Strategy Elements Is Mixed
27 Figure 3.7: The Bank's Effectiveness at Implementing the Strategy Varies
Considerably by Sector
40 Figure 5.1: Staff Views on Implementing the Bank's Water Strategy
Text Tables
5 Table 1.1: Annual Investment for Water Must Increase
5 Table 1.2: A Much Greater Role for the Private Sector
12 Table 2.1: Water Supply and Sanitation Investments in Nontraditional
Sectors Are Increasing
30 Table 4.1: Mature Water Resource Management Organizations Do Not
Run Water Businesses
v






4W'
~.
Acknowledgments
T       his report exarnines the Bank's imple-  of the review of activities in the four countries.
mentation experience of the 1993 Water  A special study was undertaken with the Social
Resources Management Policy (Opera-  Assessment Team of ESSD to examine the
tional Policy 4.07) to determine the relevance and  poverty focus and efficacy of social assessments
efficacy of the Bank's overall water operations  in water projects. A questionnaire gathered feed-
for its borrowers. It evaluates the degree to  back from the experience of over 100 Bank
which the issues identified in the guideline doc-  staff with the water Strategy and its implemen-
ument WaterResourcesManagement-A World tation. Several formal and informal workshops
Bank Policy Paper (1993) have been internalized  within the Bank discussed evaluation method-
into Bank operations, examines the continuing  ology, and progress with Bank staff and other
relevance of the water Strategy, and makes rec-  stakeholders.
ommendations for refining Bank policy and   The draft report was critiqued by two peer
strategy in the water sectors. The report is based  reviewers, Peter Rogers of Harvard University and
primarily on comparisons of events in the two  David Seckler, former Director-General of the
six-year periods before (1988-93) and after  International Water Management Institute, and
(1994-99) the Operational Policy and covers all the final draft was circulated to Bank manage-
completed and new water and water-related  ment for substantive review. In addition, the
economic and sector work and operations within  study report benefited considerably from the
the two periods.                          guidance of Alain Barbu, Gregory Ingram, Roger
The analysis also builds on earlier OED eval-  Slade, and numerous colleagues in OED. ESSD
uations-in particular, a 1994 irrigation and  support to the Social Assessment Team and trust
drainage sector review and a 1992 evaluation of  funds provided by the Norwegian govemment
the first 23 years of Bank lending for water sup-  suppforted the social science and poverty
ply and sanitation. Conclusions were based on  evaluation.
an evaluation of over 270 pieces of economic  The Task Manager for the evaluation, G.T.
and sector work, 410 projects, 98 Country Assis-  Keith Pitman, prepared the report. Significant
tance Strategies, and the exit performance of 306  written contributions were made by Hans Adler,
water projects completed in the period 1988-99.  Ayse Kudat, Bulent Ozbilgin, Eugene Stakhiv,
In addition to an analysis of Bank lending, the  Robert Varley, John Cunningham, Amnon Golan,
evaluation is based on an assessment of non-  Inderjeet Singh, and Mark Svendsen. Research
lending services and a review of experience in  was conducted by Kavita Mathur, Greg Browder,
four focus countries. In-depth review and dis-  Saeed Rana, Monica Scatasta, Reno Dewina, and
cussions between Bank staff and country!  Samir Stewart. Paula Hickman, Catherine Munro,
Regional stakeholders have taken place in Brazil,  and Ted Rice provided advice and support.
Yemen, India, and the Philippines on the results  William Hurlbut, Bruce Ross-Larson, Caroline
vii



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
McEuen, and Philip Sawicki edited the report.  leader), Caroline McEuen (editor), and Juicy
Soon Wan-Pak, Marcia Bailey, Connie Frye, and  Qureishi-Huq (administrative assistant).
Helen Philip provided administrative assistance.
The paper also benefited from numerous dis-
cussions with Bank colleagues and with many       Director-General, Operations Evaluation: Robert Picciotto
individuals in development partner's countries.          Director, Operations Evaluation Department:
This study was published in the Partnerships nregory K. Ingram
and Knowledge Group (OEDPK) by the Out-          Manager, Sector and Thematic Evaluation: Alain Barbu
reach and Dissemination Unit. The task team                     Task Manager George Keith Pitman
includes Elizabeth Campbell-Page (task team
Vill



FOREWORD                         PROLOGO                         AVANT-
i              ^                                | ~~~~PROPOS
The comprehensive                El enfoque integral propug-  I   Lapproche globale preconi-
approach advocated in the        nado por el Banco en la          see dans la strategie pour
Bank's 1993 water strategy is highly  estrategia sobre los recursos hidri-  1'eau elaboree par la Banque en 1993
relevant to the sound and sustain-  cos, de 1993, es sumamente perti-  repond tout a fait aux imp6ratifs
able management of water         nente para la ordenaci6n racional y  d'une gestion rationnelle et durable
resources. Implementing the strat-  sostenible de dichos recursos. La  des ressources en eau. La mise en
egy has advanced the Bank's corpo-  aplicaci6n de la estrategia ha pro-  ceuvre de cette strategie a permis de
rate goals and mission, contributing  movido las metas institucionales y  faire avancer les buts institutionnels
to an emerging global consensus on  la misi6n del Banco, al contribuir a  de la Banque ainsi que la mission
water resource management. But   la formaci6n de un consenso mun-  qui lui a ete assign6e, et elle a
implementation, although broad, has  dial sobre la ordenaci6n de los  contribue A degager un d6but de
been partial and uneven, with big  recursos hidricos. Pero dicha apli-  consensus sur la gestion des res-
differences across Regions, coun-  caci6n, aunque amplia, ha sido par-  sources en eau. Mais si la strategie
tries, and subsectors. Work remains  cial y desigual y se han registrado  a ete appliquee de maniere g6ne-
to adapt the strategy to diverse  grandes diferencias entre oficinas  rale, sa mise en ceuvre demeure
country contexts and to link water  regionales, paises y subsectores.  neanmoins fragmentaire et inegale,
resource management to sustain-  Quedan pendientes las tareas de  avec des differences marquees entre
able service delivery.           adaptar la estrategia a diversos con-  les Regions, les pays et les sous-
The Bank has mainstreamed     textos nacionales y vincular la orde-  secteurs. Des efforts restent a faire
the strategy's principles in exten-  naci6n del agua con la prestaci6n  pour l'adapter aux differents contex-
sive economic and sector work.   sostenible de servicios.        tes nationaux et pour articuler la
But Bank efforts to nurture policy  El Banco ha incorporado los   gestion des ressources en eau avec
reform and build domestic capaci-  principios de la estrategia en  l'organisation de services durables.
ties have not matched the chal-  muchos estudios econ6micos y       La Banque integre systemati-
lenges in most countries. The    sectoriales. Pero las acciones del  quement les principes de la strate-
water strategy has been incorpo-  Banco para promover reformas de  gie aux etudes economiques et
rated only partially in Country  polfticas y fortalecer la capacidad  sectorielles de grande portee. Mais
Assistance Strategies (CASs).    nacional no han respondido a los  les efforts qu'elle,deploie pour
Organization for Economic        retos planteados en la mayoria de  faire avancer les reformes et ren-
Cooperation and Development     los paises. Esa estrategia se ha  forcer les capacites des pays ne
countries show how difficult com-  incorporado s6lo parcialmente en  sont pas a la mesure des proble-
prehensive water resource man-  las estrategias de asistencia a los  mes auxquels sont confrontes la
agement is, even with sound      paises. Los paises miembros de la  plupart des pays. La strategie pour
governance, participation, institu-  Organizaci6n de Cooperaci6n y  1'eau n'a ete incorporee que par-
tions, and skills-all mostly miss-  Desarrollo Econ6micos muestran  tiellement dans les Strategies
ing in Bank client countries. And  cuan dificil es la ordenaci6n inte-  d'assistance aux pays (SAP). Les
while some borrowers share the   gral de los recursos hidricos, aun  pays de l'Organisation de coopera-
Bank's vision, few have imple-   cuando exista una gesti6n publica  tion et de developpement econo-
mented the comprehensive princi-  eficaz, ademas de participaci6n,  miques temoignent des difficultes
ple because of these constraints.  instituciones y conocimientos,  que presente la gestion globale
Thus, not many Bank water proj-  requisitos casi inexistentes en los  des ressources en eau, meme avec
ects are able to address all key  paises clientes del Banco. Si bien  des atouts tels que la saine gestion
elements of the strategy, such as  algunos prestatarios comparten la  des affaires publiques, la participa-
ix



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
using economic and finan-        visi6n del Banco, pocos          tion, les institutions et les
cial instruments to effi-        han aplicado el principio   '    competences - qui font le
a    ciently allocate water and  -    de manera integral debido   .    plus souvent defaut aux
safeguard ecosystems             a esas limitaciones. Por         pays clients de la Banque.
within a national or river-      ende, no son muchos los          Et, si certains emprunteurs
basin management frame-          proyectos del Banco en el        partagent la vision de la
work. Conversely, there          sector del agua que pueden      lBanque, rares sont ceux qui
has been significant             abordar todos los elemen-        ont pu appliquer le principe
progress in the adoption of the  tos fundamentales de la estrategia,  de la globalite a cause de ces
strategy's institutional, financial,  como la utilizaci6n de instrumen-  contraintes. C'est pourquoi, peu de
and socioeconomic objectives    tos econ6micos y financieros para  projets de la Banque dans le sec-
within the water service sectors  asignar eficientemente este    teur de l'eau englobent tous les
that have been the traditional   recurso y salvaguardar los ecosis-  elements cles de la strategie, tels
vehicles for Bank assistance.   temas dentro de un marco de ges-  que l'utilisation d'instruments eco-
Impediments remain. Until     ti6n a nivel nacional o de las   nomiques et financiers pour assu-
recently, the Bank had not organ-  cuencas hidrograficas. En cambio,  rer une repartition efficace de l'eau
ized itself to treat water resources  ha habido progresos notables en  et preserver les ecosystemes dans
management comprehensively.     la adopci6n de los objetivos insti-  le cadre d'un plan national ou
Comprehensive water resources    tucionales, financieros y socioeco-  d'un plan de gestion d'un bassin
management has high transaction  n6micos de la estrategia dentro de  fluvial. Des progres notables ont
costs, particularly because many  los sectores de servicios de agua  toutefois ete enregistres dans
safeguard policies-and certainly  que han sido mecanismos tradicio-  I'adoption des objectifs institution-
the most controversial-apply to  nales de la asistencia del Banco.  nels, financiers et socioeconomi-
water-related development. Thus,   Subsisten los impedimentos.    ques au niveau des services de
country management sees many     Hasta hace poco, el Banco no se  1'eau, qui sont les instruments tra-
water interventions as risky ven-  habia organizado para abordar  ditionnels par lesquels passe
tures in a time of dwindling Bank  integralmente la ordenaci6n del  I'assistance de la Banque.
resources.                       agua, la cual tiene altos costos de  Des obstacles demeurent.
In addition, water development  transacci6n, debido en especial a  Jusqu'a une periode recente, la
transcends borders, and the inter-  que muchas politicas de salva-  Banque ne s'etait pas organis6e
national dimension is becoming   guardia -y ciertamente las mas   pour traiter le probleme de la ges-
increasingly important. While the  controvertidas- se aplican a pro-  tion des ressources en eau dans
main water service sectors have  yectos relacionados con el agua.  son ensemble. La gestion globale
incorporated most of the strategy's  Por eso, los directivos a cargo de  des ressources implique des couts
recommendations to improve serv-  las operaciones del Banco en los  de transaction eleves, en particu-
ice delivery-water supply and    paises consideran que muchas     lier parce que le developpement
sanitation somewhat better than  intervenciones relativas al agua  lie aux ressources hydriques fait
irrigation and drainage-there had  son iniciativas riesgosas en tiem-  l'objet de nombreuses mesures de
been no one group (until this    pos de retracci6n de los recursos  sauvegarde et notamment de la
year) charged with overseeing and  del Banco.                     plus controversee.
developing the Bankwide institu-   Ademas, el aprovechamiento       C'est pourquoi les responsables-
tional retooling needed to ensure a  del agua trasciende las fronteras y  pays considerent que les interven-
consistent approach to water     es cada vez mas importante el    tions dans le secteur de l'eau sont
resources management. Good       aspecto internacional. Si bien en  des operations risquees a un
models exist, notably in the Africa  los principales sectores de servi-  moment ou les ressources de la
and the Middle East and North    cios de agua se ha incorporado la  Banque diminuent. En outre, la
Africa Regions. And it is expected  mayoria de las recomendaciones  mise en valeur des ressources en
that the new Bank Water          de la estrategia tendientes a mejo-  eau transcende les frontieres, et la
Resources Management Group cre-  rar la prestaci6n de los servicios  dimension internationale prend de



Foreword
ated in early 2000 within      (en el abastecimiento de        plus en plus d'importance.
the Economic and Socially      agua y el saneamiento algo  '   Si les principaux services de
Sustainable Development   -    mejor que en el riego y el      I'eau tiennent compte de la
]    Vice-Presidency will address  '  drenaje), ningun grupo        plupart des recommanda-
z    these issues as it develops    (hasta este afno) se ha         tions contenues dans la stra-
the Water Resources Sector     encargado de supervisar y       tegie pour ameliorer leur
Strategy Paper.                formular a nivel de todo el     organisation - de fa<on un
Perceptions of a loom-       Banco la reorganizaci6n        peu plus rigoureuse pour ce
ing global water crisis, reinforced  necesaria para asegurar un enfo-  qui est de l'alimentation en eau et
by the Second World Water Con-  que coherente de la ordenaci6n  de l'assainissement que pour l'irri-
ference at The Hague in 2000,  del agua. Se cuenta con buenos  gation et le drainage -, aucun
have made policymakers aware of  modelos, especialmente en las  groupe (jusqu'a cette annee) n'a
the need to enhance water      regiones de Africa y de Oriente  et charge de proceder a la reorga-
resource management in develop-  Medio y Norte de Africa; y se  nisation institutionnelle de
ing countries. This is creating  espera que el nuevo Grupo del  1'ensemble de la Banque qui s'im-
opportunities for the Bank to  Banco encargado de la gesti6n de  pose afin de lui permettre d'adop-
rededicate itself to implementing  los recursos hidricos, creado a  ter une approche coherente pour
a comprehensive water manage-  principios de 2000 dentro de la  la gestion des ressources en eau,
ment strategy along the lines of  Vicepresidencia de Desarrollo  et de suivre le deroulement de
the following recommendations:  Social y Ecol6gicamente Sosteni-  cette restructuration. II existe des
Recommendation 1: Aim        ble, aborde esas cuestiones al  modeles valables, notamment dans
country dialogue and institu-  preparar el documento de estrate-  les Regions Afrique, et Moyen-
tional development at integrat-  gia sobre recursos hidricos.  Orient et Afrique du Nord. Et le
ing social and environmental      Las percepciones acerca de   nouveau Groupe de gestion des
concerns with water resource   una inminente crisis mundial del  ressources en eau cree au debut
development and project imple-  agua, reforzadas por la Segunda  de l'an 2000 au sein de la Vice-
mentation. This requires:      Conferencia Mundial sobre el    presidence Developpement ecolo-
* Greater attention to linking  Agua celebrada en La Haya en  giquement et socialement durable
water projects with CAS and  2000, han llevado a los encarga-  (ESSD) s'attaquera sans aucun
poverty strategies, to achieving  dos de formular las politicas a  doute a ces questions dans le cadre
better understanding of local  tomar conciencia de la necesidad  de la redaction du document de
institutions and preferences,  de mejorar la ordenaci6n de este  strategie pour les ressources en eau.
and to monitoring and evaluat-  recurso en los paises en desarro-  La perspective d'une crise mon-
ing project effects on poverty  llo. Esto esta creando oportunida-  diale imminente de l'eau, renforc6e
* Adopting the use of strategic  des para que el Banco vuelva a  par la deuxieme Conference mon-
environmental and social     aplicar una estrategia de ordena-  diale sur l'eau tenue a La Haye en
assessments, including consul-  ci6n integral segun las siguientes  2000, a sensibilise les decideurs 3
tations, as part of the overall  recomendaciones:           la necessite d'ameliorer la gestion
water resources planning       Recomendaci6n 1: Procurar    des ressources en eau dans les
process                      que en el didlogo con los palses  pays en developpement. Cela
* More attention to be given to  y en el desarrollo institucional  donne a la Banque de nouvelles
developing economic instru-  se incorporen los aspectos     raisons de s'employer a mettre en
ments to manage conflict in  socialesy ambientales en el    ceuvre une strategie globale de la
integrated water systems, includ-  aprovechamiento de los recur-  gestion de l'eau fondee sur les
ing groundwater, and to balance  sos hMdricos y en la ejecucidn  recommandations suivantes:
demands at the river-basin level,  de losproyectos reladionados.  Recommandation 1: Axer le
and between urban and rural  Para esto es preciso:          dialogue avec les pays et le
populations, while ensuring  . Prestar mayor atenci6n a la  developpement institutionnel
access of the poor to water    vinculaci6n de los proyectos  sur la prise en compte des
xi



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
* More attention to factor-       del sector del agua con       questions sociales et
ing in concerns about           las estrategias de asis-  '   environnementales dans
equitable allocation of         tencia a los paises y las  .  le cadre de la mise en
water and water rights uestrategias de lucha con-            valeur des ressources en
in light of local cultural     tra la pobreza para c         eau et de resscutron des
preferences and rural-          lograr una mejor com-        projets. Pour cela, il faut:
urban needs                     prensi6n de las institu-      * veiller davantage a articu-
* Increased emphasis on           ciones y preferencias           ler les projets centres sur
implementation of safeguard     locales y observar y evaluar los  l'eau avec les SAP et les strategies
policies during project supervi-  efectos de los proyectos sobre  de lutte contre la pauvrete afin
sion by both the Bank and the   la pobreza                      d'avoir une meilleure connais-
borrower.                     * Realizar evaluaciones ambien-   sance des institutions et des pre-
tales y sociales estrategicas,  ferences locales, et de pouvoir
Recommendation 2: Deploy        inclusive consultas, como parte  suivre et evaluer les effets de ces
Bank resources and instru-        del proceso general de planifi-  projets sur la pauvrete;
ments more effectively to nur-    caci6n en el ambito del agua  * utiliser les evaluations strategi-
ture commitment to the          * Prestar mayor atenci6n a la     ques environnementales et
strategy through shared objec-    creaci6n de instrumentos eco-   sociales, et notamment les
tives, realistic diagnostics, and  n6micos para hacer frente a los  consultations, comme elements
partnerships aimed at policy       conflictos en las redes de agua  du processus de planification
reform and capacity building.     integradas, inclusive las aguas  des ressources en eaux;
Areas requiring particular attention  subterraneas, y para equilibrar  * veiller davantage a elaborer des
include:                          la demanda a nivel de las       instruments economiques pour
• Updating the Bank's water pol-  cuencas hidrograficas y entre   gerer les conflits lies aux
icy in the context of the forth-  poblaciones urbanas y rurales,  reseaux hydriques integres et
coming Sector Strategy Paper    asegurando al mismo tiempo el   notamment aux eaux souterrai-
and supplementing it with a     acceso de los pobres al agua    nes, et equilibrer les ponctions
series of Bank procedures and  * Prestar mas atenci6n a la incor-  sur les ressources au niveau des
good practice notes for each    poraci6n de las cuestiones rela-  bassins fluviaux, et entre les
subsector                       cionadas con la asignaci6n      populations urbaines et les
* Making greater use of adapt-    equitativa del agua y los dere-  populations rurales, tout en
able lending instruments and    chos sobre el agua, teniendo    veillant a ce que les pauvres
developing new, cost-effective,  en cuenta las preferencias cul-  puissent avoir acces a l'eau;
performance-based approaches    turales locales y las necesida-  * se preoccuper davantage de
to project selection, design,   des rurales y urbanas           I'affacturage pour les questions
procurement, and service      * Hacer mas hincapie en la apli-  concernant l'allocation equita-
delivery                        caci6n de politicas de salva-   ble de l'eau et les droits
* Strengthening economic and      guardia durante la supervisi6n  d'usage de l'eau en tenant
sector work to allow for        de los proyectos por el Banco   compte des preferences cultu-
improved diagnosis, higher-     y el prestatario                relles et des besoins des zones
quality dialogue with stake-                                    rurales et urbaines;
holders, and closer linkages    Recomendaci6n 2: Asignar      * accorder, lors de la supervision
with Country and Poverty     los recursos y los instrumen-      des projets, plus d'importance
Assistance Strategies         tos del Banco de manera mds       a l'adoption de mesures de
* Reorienting capacity building  eficaz afin defomentar la        sauvegarde, tant par la Banque
in the water sector toward    adhesion a la estrategia a tra-   que par l'emprunteur.
comprehensive water manage-   ves de objetivos comunes,
ment through World Bank       diagnosticos realistas y alian-   Recoimiandation 2: Deployer
Institute programs and global  zas orientadas a la reforma    plus efficacement les ressources
xii



Foreword
and regional capacity-          de las politicas y alfor-      et les instruments de la
building partnerships.          talecimiento de la capa-   '   Banque afin d'encourager
i                      3  . ~~~~~~~~~cidad. Los siguientes  radoption de la strate'gte
1      Recommendation 3:       r    temas requieren particular      enfondantl'action sur des
compCreate and sustain more         atencitn:                       objectifs partagses et
comprehensive water               Actualizar la politica del   dagnosticsaretagts est
management aUiances               Banco relativa al agua       des partenarfats axes sur
with like-minded part-            en el contexto del docu-     les rdformes et le renforce-
ners in the private sector, civil  mento de estrategia sectorial de  ment des capact6s. Les domaines
society, and the development      pr6xima aparici6n, comple-   qui requierent une attention particu-
community. This requires:         mentandola con notas sobre   liere incluent:
• Sustaining involvement in       procedimientos y practicas   * I'actualisation de la politique
global water policy networks    recomendadas del Banco para    de l'eau de la Banque dans le
and partnerships, with priority  cada subsector                contexte de la prochaine etude
to cross-border, integrated,  * Aprovechar mas los instrumen-  sur la strategie sectorielle, a
river-basin planning, driven by  tos de prestamo adaptables y  completer par une serie de
stakeholder demand, and to      elaborar nuevos enfoques       notes sur les procedures et les
the resolution of international  basados en el desempefio y    bonnes pratiques de la Banque
water disputes.                 eficaces en funci6n de los cos-  pour chaque sous-secteur;
* More attention to in-country   tos para la selecci6n y el dis-  * le recours plus frequent aux
water partnerships is required  efio de los proyectos, las     instruments de prets evolutifs
to build dialogue and leverage  adquisiciones y la prestaci6n  et la mise au point de nouvel-
local knowledge.                de servicios                   les methodes efficaces par rap-
* Entering new partnerships only  * Mejorar los estudios econ6mi-  port aux coOts et basees sur la
where the Bank has a clear      cos y sectoriales para obtener  performance pour la selection
comparative advantage ir;       diagn6sticos mas precisos, dia-  et la conception des projets, la
doing so, clearly specifying   logos de mejor calidad con las  passation des marches et
conditions for entry and exit.  partes interesadas y vinculos  l'organisation des services
* Driving the choice between      mas estrechos con las estrate-  * la realisation d'etudes economi-
private and public sector       gias de asistencia a los paises y  ques et sectorielles plus appro-
involvement by hard-nosed       de lucha contra la pobreza     fondies afin d'affiner les
institutional analysis of what  . Reorientar el fortalecimiento de  diagnostics, d'engager un dia-
works and what does not in     la capacidad en el sector de los  logue de meilleure qualite avec
differing country contexts.     recursos hidricos para lograr  les parties prenantes et de ren-
una gesti6n integral del agua a  forcer l'articulation avec les
Recommendation 4:              traves de programas del Insti-  Strategies d'assistance aux pays
Strengthen internal manage-       tuto del Banco Mundial y de     et de lutte contre la pauvrete;
ment, monitoring and evalua-      asociaciones a nivel mundial y  * reorienter le renforcement des
tion of water resource            regional para el fortalecimiento  capacites dans le secteur de
management activities through     de la capacidad.                1'eau pour l'axer sur la gestion
a streamlined organization,                                       globale des ressources en eau
more cohesive sector and          Recomendaci6n 3: Estable-       dans le cadre des programmes
country strategies, enhanced    cery mantener mds alianzas        de l'Institut de la Banque mon-
core competencies, additional  para la ordenaci6n integral        diale et des partenariats mon-
operational guidance and        del agua con asociados aflnes     diaux et regionaux pour le
training, and more rigorous     del sector privado, la sociedad   renforcement des capacites.
quality assurance arrange-      civily las instituciones de des-
ments. Chief among the issues to  arrollo. Para esto se requiere:  Recomniandation 3: Creer et
address:                        * Mantener la participaci6n en  maintenir des alltances plus lar-
xiii



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
* Clarifying the role of the      las redes y asociaciones      ges pour la gestion de
central Water Resource          mundiales sobre politi-  ,   l eau avec des partenai-
i Management Group and          -       cas relacionadas con el      res du secteurpriv4, de
its relationship with Sec-  r   agua, dando prioridad a  :    la socidet civile et de la
tor Boards and Regional         la planificaci6n trans-       communaute du ddvelop-
staff, particularly in rela-    fronteriza e integrada de    pement quipartagent les
tion to institutional and       las cuencas hidrografi-       me^mes conceptions. Pour
finaricial aspects of the       cas, con el liderazgo de      cela, il faut:
rural water portfolio, and con-  las partes interesadas, y a la  * maintenir la participation
sidering the establishment of   resoluci6n de los conflictos    aux reseaux mondiaux et aux
water resource management       internacionales sobre el agua.  partenariats axes sur la politique
coordinating bodies in each     Es preciso prestar mas atenci6n  de l'eau, en donnant priorite a
Region.                         a las asociaciones dentro del   la planification transfrontiere et
* Providing more vigilant and     pais para entablar un dialogo   integree des basins flu-viaux
independent quality assurance   sobre el agua y aprovechar los  fondee sur la demande des par-
for safeguard policies affecting  conocimientos locales.        ties prenantes, et a la resolution
water development.            * Establecer nuevas asociaciones  des differends concernant les
* Offering incentives and training  s6lo cuando el Banco tenga en  eaux internationales. II convient
to accelerate staff adoption of a  ello una ventaja comparativa  d'accorder une plus grande
comprehensive approach to       evidente, especificando clara-  attention aux partenariats natio-
water resources management.     mente las condiciones de        naux dans le secteur de l'eau
* Reassessing staffing levels and  ingreso y salida.              afin de renforcer le dialogue et
skills mixes to implement the  * Fundamentar la elecci6n entre  d'approfondir la connaissance
water strategy Bankwide. To     la participaci6n del sector pri-  du contexte local;
ensure adequate staffing and    vado y el sector puiblico con  * etablir de nouveaux partenariats
continuity, reliance on ad hoc  rigurosos analisis instituciona-  dans les domaines oii la Ban-
trust funds should be reduced   les de lo que da resultado y lo  que a manifestement int&et a le
and the Bank budget             que no da resultado en el con-  faire, en specifiant de facon
enhanced.                       texto de diferentes paises.     explicite les conditions d'entr6e
et de sortie;
Recomendaci6n 4: Fortale-     * decider du choix entre la parti-
cer la gestifn interna, el segui-  cipation du secteur prive et du
miento y la evaluaci6n de las     secteur public sur la base d'une
actividades de ordenaci6n de      analyse institutionnelle prati-
los recursos bfdricos medi-       que et approfondie de ce qui
ante una organizaci6n simpli-     marche et qui ne marche pas
ficada, estrategias sectoriales    dans les differents contextes
y nacionales mds coherentes,       nationaux.
competencias bdsicas mejora-
das, mds orientaci6ny capaci-     Recommandation 4: Renfor-
taci6n operacionaly arreglos    cer la gestion interne, le suivi et
mds rigurosos para asegurar     I'6valuation des activitds Ie%es 4
la calidad. Se han de abordar las  la gestion des ressources en
siguientes cuestiones:          eau par une politique axee sur
* Aclarar el papel del Grupo cen-  la rationalisation de l'organisa-
tral encargado de la gesti6n de  tion, l'amelforation de la cobe-
los recursos hidricos y su rela-  rence des strate'gies sectorieUes
ci6n con las juntas sectoriales y  et nationales, le renforcement
los funcionarios de las oficinas  des competences essentieUes, la
XIV



Foreword
regionales, en particular     fourniture de directives
en lo concerniente a los      operationneUles et de for-
aspectos institucionales      mations supplWmentai-
,       y financieros de la car-       res, et des arrangements
tera de proyectos hidro-      plus rigoureux au plan
16gicos rurales, y            de l'assurance de qualite.
considerar el estableci-      Les principaux objectifs
miento de 6rganos de          dans ce contexte sont les
coordinaci6n de dichos recur-  suivants:
sos en cada oficina regional   * preciser le r6le du Groupe cen-
• Adoptar medidas de garantia      tral de la gestion de l'eau ainsi
de la calidad mas estrictas e    que ses relations avec les com-
independientes para las politi-  missions techniques et les
cas de salvaguardia que afectan  Regions, en particulier pour ce
el desarrollo del sector del     qui est des aspects institution-
agua                             nel et financier du portefeuille
* Ofrecer incentivos y capacita-   des projets centres sur 1'eau en
ci6n para acelerar la adopci6n   milieu rural, et etudier la possi-
por el personal de un enfoque    bilite de creer dans chaque
integral de la ordenaci6n de     Region des organes de coordi-
los recursos hidricos            nation de la gestion des res-
* Reevaluar la dotaci6n de perso-  sources en eau;
nal y la combinaci6n de aptitu-  * faire preuve de plus de vigi-
des para aplicar en todo el      lance et d'independance dans
Banco la estrategia de ordena-   le domaine de l'assurance de
ci6n de los recursos hidricos.   qualite pour les mesures de
Para asegurar que la dotaci6n    sauvegarde touchant la mise en
de personal y la continuidad     valeur de l'eau;
sean adecuadas, es preciso     * offrir des incitations et une for-
depender en menor medida de      mation pour amener le person-
los fondos fiduciarios especia-  nel a accelerer l'adoption d'une
les y mejorar el presupuesto     approche globale en matiere de
del Banco.                       gestion des ressources en eau;
* revaluer les dotations en per-
sonnel et l'eventail des qualifi-
cations disponibles pour la
mise en ceuvre de la strategie
de l'eau dans l'ensemble des
services de la Banque. Afin de
garantir une dotation suffisante
en personnel et d'assurer la
continuite, il conviendra de
reduire les recours aux fonds
fiduciaires speciaux et d'accroi-
tre le budget de la Banque.
Robert Picciotto
Director-General, Operations Evaluation
xv






EXECUTIVE                         RESUMEN                            RESUME
I SUMMARY                                                                ANALYTIQUE
In 1997 more than 1.1 billion     En 1997, habia en paises de      En 1997, plus de 1,1 milliard
people in low- and middle-       ingreso bajo y mediano mas        d'habitants des pays a faible
income countries lacked access to  de 1.100 millones de personas que  revenu et A revenu intermediaire ne
safe water supplies, and far more  carecian de acceso al abastecimiento  pouvaient avoir acces a une source
were without adequate sanitation.  de agua potable y era mayor el  d'eau salubre et un nombre bien plus
Today, 166 million people in 18 coun-  numero de personas carentes  important encore ne disposait pas
tries suffer from water scarcity, while  de saneamiento adecuado. Actual-  d'equipements d'assainissement
another 270 million in 11 additional  mente, 166 millones de personas en 18  adequats. Aujourd'hui, 166 millions
countries are considered "water   paises padecen de escasez de agua, y  d'individus vivant dans 18 pays souf-
stressed." By 2025 affected popula-  se considera que otros 270 millones,  frent d'une p6nurie de 1'eau, et
tions will increase to about 3 billion  en otros 11 paises, estan en situaci6n  270 millions d'individus dans 11 autres
people, or about 40 percent of the  de 'estr6s" por carencia de agua.  pays sont consideres comme souf-
world's population, most of them in the  Hacia 2025, las poblaciones afectadas  frant d'un a stress hydrique n. D'ici a
poorest countries. There is now a con-  aumentaran a unos 3.000 millones de  2025, les populations touchees
sensus thatthe severity of the problem  personas, o un 400/o de la poblaci6n  passeront a quelque 3 milliards de
requires a strategic approach that  mundial, la mayoria de ellas en los  personnes, soit A peu pres 40 % de la
emphasizes equitable and sustainable  paises mas pobres. Hoy dia hay un  population mondiale, la plupart vivant
management of water resources.    consenso acerca de que la gravedad  dans les pays les plus demunis. On
del problema requiere un enfoque  s'accorde maintenant a reconnaitre
The Bank's Water Strategy         estrategico que haga hincapie en  que la gravite du probleme exige une
To inform development of the      la ordenacion equitativa y sostenible  approche strategique mettant l'accent
new World Bank Water Resources    de los recursos hidricos.        sur une gestion 6quitable et durable
Sector Strategy, the Operations                                    des ressources en eau.
Evaluation Departnent (OED)       La estrategia del Banco sobre
undertook the evaluation of how   ordenaci6n de los recursos       La strategie de la Banque pour
effectively the Bank's current strat-  hidricos                    1'eau
egy has been implemented. The     Para fundamentar la formulaci6n  Dans le cadre de la mise au point
comprehensive approach embod-     de la nueva estrategia para el sec-  de la nouvelle Strategie sectorielle
ied in the 1993 Water Resources   tor del agua del Banco Mundial, el  pour les ressources en eau de la
Management (the Strategy)         Departamento de Evaluaci6n de    Banque mondiale, le Departement
evolved in response to growing    Operaciones (DEO) realiz6 una    de l'evaluation des operations
unease within the Bank that water  evaluaci6n de la eficacia en la apli-  (OED) a entrepris d'examiner l'ef-
operations were failing to deliver  caci6n de la actual estrategia del  ficacite avec laquelle la strategie
sustainable development-water     Banco. El enfoque integral consa-  actuelle de la Banque avait et
and water-related projects were   grado en el documento titLlado La  appliquee. La philosophie de l'ap-
among the poorer performers in    ordenacion de los recursos hidricos  proche globale dont s'inspirait la
the Bank portfolio-and growing    (la Estrategia) de 1993 se elabor6  Gestion des ressources en eau (la
international concern about the   en respuesta a la creciente preocu-  Strategie) de 1993 a pris corps
mismanagement of global water     paci6n suscitada en el Banco en el  lorsque la Banque a constate avec
resources and poor service levels,  sentido de que las operaciones  une inquietude grandissante que
particularly for the poor.       relativas al agua no eran condu-  les operations concernant le
The Strategy is highly relevant to  centes a un desarrollo sostenible  secteur de l'eau ne permettaient
sound and sustainable manage-    -los proyectos sobre recursos     pas de promouvoir un developpe-
xvii



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
ment of water resources. It      hidricos y los proyectos         ment durable - dans le
recognizes that improving        relacionados con este sector  '  portefeuille de Banque,
performance in meeting          figuraban entre los de            les projets centres sur
water needs requires bor-        menor rendimiento de la         l'eau ou lies a l'eau etaient
=    rowing countries to reform       cartera del Banco- y a la   -    ceux dont les resultats
_    their water management           creciente inquietud interna-  !  taient les plus
institutions, policies, and      cional acerca de la ordena-     decevants - et que la
planning systems. It also        ci6n deficiente de los          mauvaise gestion des
acknowledges that this would    recursos hidricos mundiales y los  ressources mondiales en eau et la
mean changes in the Bank's inter-  insuficientes niveles de servicios,  mauvaise qualite des services, en
nal processes, training, skill mix,  particularmente para los pobres.  particulier pour les pauvres, ont
and the resources assigned to      La Estrategia es sumamente     suscite des preoccupations crois-
water and water-related operations.  pertinente a la ordenaci6n racio-  santes au sein de la communaute
The comprehensive analytical  nal y sostenible de los recursos  internationale.
frameworks advocated in the      hidricos. En ella se reconoce que  La Strategie repond tout a fait
Strategy paper are designed to   para mejorar el desempefio en la  aux imperatifs d'une gestion
help guide decisions about water.  satisfacci6n de las necesidades de  rationnelle et durable des
There are two major thrusts: to  agua es preciso que los paises   ressources en eau. Elle tient
produce an overarching water     prestatarios reformen sus institu-  dument compte du fait que les
resources management framework   ciones, politicas y sistemas de  pays emprunteurs doivent
that integrates the needs of the  planificaci6n relativos a la ordena-  reformer leurs institutions, leurs
water service subsectors, and to  ci6n de este recurso. Tambien se  politiques et leurs systemes de
present a reform agenda and      reconoce que esto entraAiara cam-  planification dans le domaine de
innovations to improve the rele-  bios en los procedimientos inter-  la gestion de l'eau s'ils veulent
vance, effectiveness, and sustain-  nos del Banco, la capacitaci6n, la  pourvoir de meilleure fa,con aux
ability of the main water service  combinaci6n de aptitudes y los  besoins en eau de leurs popula-
subsectors.                      recursos asignados a operaciones  tions. Elle reconnalt aussi que cela
sobre los recursos hidricos y rela-  implique de la part de la Banque
Implementation Is Broad-         cionadas con este sector.        qu'elle modifie ses processus
but Partial and Uneven             Los marcos analiticos integrales  internes, les formations dispen-
Implementing the 1993 Strategy   propugnados en el documento de   sees, la repartition des qualifica-
has advanced the Bank's corpo-  la Estrategia se han disefiado para  tions et les ressources consacrees
rate goals and mission, contribut-  ayudar a orientar las decisiones  aux operations centrees sur l'eau
ing to an emerging global        relativas al agua. Hay dos aspec-  ou liees a l'eau.
consensus on water resource     tos principales: producir un marco  Les cadres d'analyse d'ensem-
management. But implementation,  global de ordenaci6n de los      ble que preconise le document de
while broad, has been partial and  recursos hidricos que integre las  Strategie sont con,us pour guider
uneven, with big differences     necesidades de los subsectores de  les decisions concernant l'eau. Ils
across Regions, countries, and   servicios de agua, y presentar un  reposent sur deux grandes lignes
subsectors. Work remains to adapt  programa de reforma e innovacio-  de force : mettre au point un sys-
the Strategy to diverse country  nes a fin de mejorar la pertinen-  teme global de gestion des
contexts and to link water       cia, la eficacia y la sostenibilidad  ressources en eau, qui integre les
resource management to sustain-  de los principales subsectores de  besoins des sous-secteurs des
able service delivery.           dichos servicios.                services d'eau, et presenter un
programme de reformes et des
Reform is Difficult              La aplicaci6n es amplia, pero    innovations afin d'ameliorer la
While many Strategy principles   parcial y desigual               pertinence, l'efficacite et la viabil-
have been mainstreamed in eco-   Al aplicar la Estrategia de 1993 se  ite des principaux sous-secteurs
nomic and sector work, and have  han impulsado los objetivos insti-  des services d'eau.
xviii



Executive Summary
guided Bank involvement          tucionales y la misi6n del       La strategie est
in an increasing number of       Banco y se ha contribuido  '     appliquee de manibre
international water partner-     a un consenso mundial            generale -  mais sa
eships, awareness of water           incipiente sobre la ordena-      mise en ceuvre est
1   development issues at the        cipn de los recursos hidri-      fragmentaire et inegale
level of Country Assistance      cos. Pero la aplicaci6n,         La mise en ceuvre de la
Strategies remains elusive.      aunque amplia, ha sido          Strategie de 1993 a permis
Bank actions are a modest        parcial y desigual, con          de faire avancer les buts
driving force behind water man-  grandes diferencias entre las ofici-  institutionnels de la Banque ainsi
agement reforms, except in small  nas regionales, pafses y subsecto-  que la mission qui lui a et
countries. Even then, reform    res. Quedan pendientes tareas     assignee, et elle a contribue a
requires aligning Bank interven-  para adaptar la Estrategia a diver-  degager un debut de consensus sur
tions with country conditions and  sos ambitos nacionales y vincular  la gestion des ressources en eau.
the activities of other international  la ordenaci6n de los recursos  Mais si la strategie est appliquee de
actors. Other development institu-  hidricos con la prestaci6n de ser-  maniere generale, sa mise en ceuvre
tions, including multilateral and  vicios sostenibles.            demeure neanmoins fragmentaire et
bilateral development agencies,                                  inegale, avec des differences mar-
nongovernmental organizations    La reforma es dificil            quees entre les Regions, les pays et
(NGOs), and the private sector   Si bien muchos principios de la  les sous-secteurs. Des efforts restent
can, and do, influence the pace  Estrategia han sido incorporados  a faire pour adapter la Strategie aux
and direction of reform. Promot-  en los estudios econ6micos y sec-  differents contextes nationaux et
ing collaboration with these par-  toriales y han orientado la partici-  pour articuler la gestion des
ticipants is an important element  paci6n del Banco en una        ressources en eau avec l'organisa-
of the Strategy.                 creciente cantidad de asociaciones  tion de services viables.
The Bank has not widely       internacionales relativas al agua,
adopted the comprehensive        aun no se ha creado suficiente   Los reformes sont difficiles
principles at the heart of the   conciencia sobre las cuestiones  Un grand nombre des principes
Strategy. This is less a failure,  relativas al aprovechamiento de  qui sous-tendent la Strategie sont
however, than an indication of  los recursos hidricos a nivel de las  systematiquement inclus dans les
the complexity of water sector   estrategias de asistencia a los pai-  etudes economiques et secto-
reform. Even with sound gover-   ses. Las intervenciones del Banco  rielles, ce qui a conduit la Banque
nance, participation, institutions  son una pequenia fuerza impul-  a participer a un nombre croissant
and skills-all largely missing in  sora de las reformas en la ordena-  de partenariats internationaux
Bank client countries-such       ci6n del agua, salvo en paises   pour l'eau, mais la sensibilisation
reform takes 10-20 years.        pequenios; aun en ellos, la      aux problemes de la mise en
Reform also takes time. All too  reforma requiere que las interven-  valeur de l'eau dans le cadre des
often the Bank has expected      ciones del Banco se armonicen    Strategies d'assistance aux pays
reform to quickly follow invest-  con las condiciones reinantes en  demeure un vceu pieux. Les inter-
ment. But in water supply and    el pais y las actividades de otros  ventions de la Banque ont peu
sanitation, making investment con-  participantes internacionales.  d'influence sur les reformes con-
ditional on reform frequently leads  Otras instituciones de desarrollo,  cemant la gestion des ressources
to more successful outcomes.     entre ellas organismos multilatera-  en eau, sauf dans les petits pays.
les y bilaterales de desarrollo,  Et si c'est le cas, encore faut-il
Leadership and Ownership         organizaciones no gubernamenta-  adapter les interventions de la
Where there are champions for    les (ONG) y entidades del sector  Banque a la situation des pays et
reform, the results can be remark-  privado, pueden influir sobre el  aux activites des autres acteurs
able. In Brazil the Bank's water  ritmo y la orientaci6n de la   internationaux. D'autres institu-
programs are successful in the  reforma, y asi lo hacen. Promover  tions de developpement, et notam-
state of Ceara because of the per-  la colaboraci6n con esos partici-  ment les organismes multilateraux
xix



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
sonal interest of the gover-    pantes es un importante         et bilateraux de developpe-
nor and grassroots opera-       elemento de la Estrategia.  '   ment, les organisations non
tions and management. In   -       El Banco no ha adop-         gouvernementales (ONG) et
India the chief minister of  r  tado en forma generalizada      le secteur prive, peuvent
Andhra Pradesh pushed           los principios integrales       influer sur le rythme et le
til  through an extensive            basicos de la Estrategia. Sin   cours des reformes, et c'est
reform program of the irri-     embargo, esto no es tanto       ce qu'elles font. La promo-
gation sector.                  una falla, sino mas bien un     tion de la collaboration
indicio de la complejidad de la  avec ces participants est un ele-
Cross-Sectoral Operations,      reforma del sector de recursos  ment important de la Strategie.
Subsectoral Differences         hidricos. Aun cuando se cuente    Les principes generaux qui sont
The number of cross-sectoral    con una adecuada gesti6n de     au cceur de la Strategie n'ont pas
water resources management      gobierno, participaci6n, institucio-  ete largement adoptes par les serv-
operations is increasing, but   nes y conocimientos -todo lo    ices de la Banque. C'est moins la le
slowly. Most Bank operations    cual suele faltar en gran medida  signe d'un echec qu'une indication
remain project-focused because  en los paises clientes del Banco-,  de la complexite de la reforme du
that is seen as the most effective  las reformas suelen Ilevar de 10 a  secteur de l'eau. Meme avec les
way of building capacity, intro-  20 afios.                     atouts que representent une saine
ducing reforms, and enabling eco-  Con frecuencia, el Banco ha  gestion des affaires publiques, la
nomic and sector work in a time  esperado que la reforma ocurra  participation, les institutions et les
of declining budgets. Indeed, tai-  rapidamente despues de las inver-  competences - atouts qui font le
loring project design to the Strat-  siones. Pero en materia de abaste-  plus souvent defaut aux pays
egy's service-delivery-rather than  cimiento de agua y saneamiento,  clients de la Banque -, il faut de
comprehensive-initiatives       supeditar las inversiones a la  10 a 20 ans pour mener ces
appears to result in fewer prob-  reforma suele redundar en resul-  reformes a leur terme.
lem projects and catalyzes reform.  tados mas satisfactorios.     Les reformes demandent
In consequence, Bank efforts to                                 egalement du temps. Trop sou-
nurture policy reform and build  Liderazgo e identificaci6n con los  vent, la Banque a pense que les
domestic capacities have not    proyectos                       investissements seraient rapide-
matched the challenge in most   Cuando hay paladines de la      ment suivis de reformes. Mais,
countries.                      reforma, los resultados pueden  dans le secteur de l'alimentation
A major problem is that the   ser notables. En el estado de   en eau et de l'assainissement,
main water subsectors (water sup-  Ceara (Brasil), los programas del  on obtient souvent de meilleurs
ply, irrigation and drainage,   Banco sobre el agua son eficaces  resultats lorsque l'investisse-
hydropower, flood control, and  debido al interes personal del  ment est subordonne a la mise
environment) function independ-  Gobernador y a las operaciones y  en ceuvre de reformes.
ently, with little cross-sectoral  gesti6n por las comunidades de
planning and cooperation, and   base. En la India, el primer minis-  De l'importance du leadership et de
there has been only modest      tro de Andhra Pradesh impuls6   la prise en charge des operations
progress toward integrating water  un amplio programa de reforma  par les acteurs concernes
resources management activities  del sector de riego.           Dans les pays oii la cause des
within river basins. Greater atten-                             reformes est entendue, les resul-
tion is being devoted to making  Operaciones intersectoriales, dife-  tats peuvent etre remarquables.
existing infrastructure and institu-  rencias subsectoriales    Au Bresil, le bilan des pro-
tions work more effectively, but  Esta aumentando, aunque-lenta-  grammes de la Banque dans le
there is a long way to go.      mente, el numero de operaciones  secteur de l'eau est tres satisfaisant
There are also marked subsec-  intersectoriales para la ordenaci6n  dans l'Etat du Ceara parce que le
toral differences-reform in pub-  de los recursos hidricos. La mayo-  Gouverneur s'y interesse person-
lic sector irrigation and drainage  ria de las operaciones del Banco  nellement et que ce sont les pop-
xx



Executive Summary
is now significantly behind      siguen centradas en los          ulations locales qui ont pris
that in water supply and         proyectos porque se consi-       en charge les operations et
i sanitation, which is in-       -    dera que esta es la manera      la gestion des programmes.
creasingly accepting             mas eficaz de fortalecer la      En Inde, le ministre en
commercialization and pri-       capacidad, introducir refor-     Chef de l'Andhra Pradesh a
vatization. Other important      mas y realizar estudios eco-     pu mener a bien un pro-
elements of the Strategy-        n6micos y sectoriales en         gramme de reformes de
legal and policy aspects,        tiempos de retracci6n pre-       vaste portee dans le secteur
institutional development, partici-  supuestaria. En efecto, al adaptar  de l'irrigation.
pation of stakeholders in deci-  el diseno de los proyectos a ini-
sionmaking and decentralization,  ciativas de prestaci6n de servicios  Operations intersectorielles, dif-
a focus on the most needy-       conforme a la Estrategia -y no a  ferences sous-sectorielles
remain partially implemented.   iniciativas integrales- se obtie-  Le nombre des operations intersec-
While there was increased atten-  nen, al parecer, en menos proyec-  torielles de gestion des ressources
tion to cost recovery, water    tos problematicos y se favorece la  en eau augmente, mais lentement.
quality concerns, and the environ-  reforma. En consecuencia, las  La plupart des operations de la
ment, the broader issues of the  actividades del Banco para pro-  Banque restent centrees sur les
economic value of water, water   mover la reforma de politicas y  projets parce qu'elle considere que
and property rights, and mecha-  fortalecer la capacidad nacional  c'est la fagon la plus efficace de
nisms to equitably allocate an   no han estado a la altura de los  renforcer les capacites, d'introduire
increasingly scarce resource have  retos que enfrenta la mayoria de  des reformes et d'effectuer des
been neglected, even when Bank  los paises.                       etudes economiques et sectorielles
attention to the management of     Un problema importante es      a un moment ou les budgets
trans-boundary and international  que los principales subsectores  diminuent. De fait, il apparait que,
waters increased.                del agua (abastecimiento de agua,  lorsque les projets sont centres sur
riego y drenaje, energia hidroelec-  l'organisation des services, comme
Managing Complexity             trica, defensa contra las inunda-  le requiert la Strategie - plut6t
Determining the right level of   ciones y medio ambiente)         que sur un programme d'action
complexity and phasing is one of  funcionan independientemente,   global -, il y ait moins de projets
the unresolved dilemmas of a     con escasa planificaci6n y coope-  a problemes et que la dynamique
more comprehensive and inte-     raci6n intersectoriales, y s6lo se  des reformes y gagne. C'est la rai-
grated approach. Not everything  ha logrado un progreso relativo  son pour laquelle les efforts
can be done at once. The Turkey  hacia la integraci6n de la ordena-  deployes par la Banque pour faire
Izmir Water Supply and Sewerage  ci6n de los recursos hidricos en el  avancer les reformes, et renforcer
Project demonstrates the inadvis-  ambito de las cuencas hidrografi-  les capacites ne sont pas a la
ability of committing funds for  cas. Se esta prestando mayor     mesure des gageures auxquelles
large-scale expansion of facilities  atenci6n a que la infraestructura y  sont confrontes la plupart des
before addressing critical institu-  las instituciones existentes funcio-  pays.
tional issues. The Lesotho High-  nen mas eficazmente, pero es      L'une des difficultes majeures
land Water Project, in contrast,  muy largo el camino que queda   tient au fait que le fonctionnement
largely complied with the        por recorrer.                    des principaux sous-secteurs de
Strategy, but its sheer size and  *Tambien hay marcadas diferen-  1'eau (alimentation en eau, irriga-
complexity created an influential  cias subsectoriales: la reforma en  tion et drainage, hydroelectricite,
national implementation agency   cuestiones de riego y drenaje en  maitrise des crues et environ-
that government will have trouble  el sector publico va ahora muy a  nement) est compartiment6 et
controlling, and dam building    la zaga de la reforma en abasteci-  qu'il y a peu de planification et de
crowded-out attention to water   miento de agua y saneamiento,    cooperation intersectorielles. En
supply and sanitation. While it is  donde hay una aceptaci6n cada  outre, peu de progres ont et real-
essential to plan comprehensively,  vez mayor de la comercializaci6n  isMs pour integrer les activites de
xxi



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
greater success could be        y la privatizaci6n. Otros       gestion des ressources en
achieved through discrete,      elementos importantes de        eau au niveau des bassins
manageable, and                 l la Estrategia -aspectos       fluviaux. Des efforts sont
sequenced development.          juridicos y de politicas,       faits pour ameliorer l'effi-
-    desarrollo institucional,  j    cacite des infrastructures et
Impediments Remain              participaci6n de los intere-  i des institutions existantes,
There is tension between        sados en la adopci6n de         mais i reste encore beau-
the demands of the Bank's       decisiones y descentraliza-     coup a faire.
water strategy, country priorities  ci6n, y atenci6n a los mas necesi-  II y a aussi des differences nota-
for water development, and what  tados- auin se aplican         bles entre les secteurs : dans les
the Bank can deliver within the  parcialmente. Si bien se prest6  secteurs publics de l'irrigation et
constraints imposed by internal  mayor atenci6n a la recuperaci6n  du drainage, les reformes accusent
organization, budgets, and staffing  de los costos y las cuestiones de  maintenant un serieux retard par
and incentive structures. In water  calidad del agua y medio ambi-  rapport au secteur de l'alimenta-
supply and sanitation, and more  ente, se han descuidado las cues-  tion en eau et de l'assainissement,
recently in environment, the Bank  tiones mas amplias del valor  ou les principes de l'exploitation
has exercised its strategic advan-  econ6mico del agua, los derechos  commerciale et la privatisation
tage. But in other areas, particu-  al agua y a la propiedad y los  gagnent de plus en plus de terrain.
larly irrigation, the Bank needs  mecanismos para asignar equitati-  Les autres elements importants de
internal reform to become more  vamente un recurso cada vez mas  la Strategie - aspects juridiques et
effective.                      escaso, aun cuando el Banco     aspects relevant de l'action gou-
Links across the Bank-particu-  prest6 mayor atenci6n a la orde-  vernementale, developpement
larly in sharpening the develop-  naci6n de aguas transfronterizas e  institutionnel, participation des
ment focus on poverty alleviation  internacionales.             parties prenantes aux prises de
and institution building-need to                                decision et decentralisation, prior-
be strengthened and main-       Gesti6n de la complejidad       ite accordee aux plus pauvres -
streamed. Comprehensive         Uno de los dilemas auin no resuel-  ne sont encore appliques que de
treatment of water resource man-  tos de un enfoque mas completo  fagon fragmentaire. Si les prob-
agement has high transaction    e integrado es la determinaci6n  lemes de recouvrement des couits,
costs, particularly because many  del nivel correcto de complejidad  de qualite de l'eau et de la protec-
safeguard policies apply to water-  y de las etapas. No es posible  tion de l'environnement sont
related development. Country    hacer todo al mismo tiempo. El  davantage pris en ligne de compte,
management thus sees many       proyecto de abastecimiento de   les questions plus generales que
water interventions as risky ven-  agua y alcantarillado en Izmir  sont la valeur economique de
tures in a time of dwindling Bank  (Turqufa) demuestra que no es  1'eau, les droits d'usage de l'eau et
resources. In addition, water   conveniente comprometer fondos  les droits de propriete, les mecan-
development often transcends    para una expansi6n en gran      ismes permettant de repartir
borders, and the international  escala de las instalaciones si no se  equitablement des ressources de
dimension adds to the complexity.  han abordado antes las cuestiones  plus en plus rares ont et neg-
Until 2000, no one group had  institucionales de importancia cri-  ligees, meme lorsque la Banque a
been charged with overseeing    tica. En cambio, el proyecto de  entrepris de s'interesser davantage
and developing the Bankwide     recursos hidricos en las regiones  A la gestion des eaux transfron-
institutional retooling needed to  montafiosas de Lesotho se adhiri6  tieres et internationales.
ensure a consistent approach to  en gran medida a la Estrategia,
water resource management. But  pero debido a su gran tamanio y  Gerer la complexite
there are some good models,     complejidad se cre6 un influyente  Determiner le bon degre de com-
notably in the Africa and the Mid-  organismo nacional de ejecuci6n  plexite et d'echelonnement des
dle East and North Africa Regions.  que el gobierno tendra dificultad  operations est l'un des dilemmes
And it is expected that the new  en controlar, y se prest6 excesiva  non resolus de l'approche globale
xxii



Executive Summary
Bank Water Resources            atenci6n a la construcci6n      et integree. On ne peut
Management Group cre-           de presas, entoro    del        tout faire a la fois. Le Projet
Mated in early 2000 within             s     abastecimiento de agua  y  d'aiimentation en eau et
the Environmentally and         el saneamiento. Si bien es  jd'assainissement d'lzmir
e    Socially Sustainable Devel-     imprescindible que la pla-      (Turquie) montre qu'il n'est
opment Vice-Presidency          nificaci6n sea integral,   s    pas souhaitable d'engager
(ESSD) will address these       podrian lograrse mejores        des fonds pour de vastes
issues in the Water             resultados mediante inter-      travaux d'expansion des
Resources Sector Strategy Paper.  venciones de desarrollo discretas,  equipements sans avoir au preal-
manejables y realizadas en      able regle les problemes institu-
Better Guidelines Are Needed    secuencia.                      tionnels fondamentaux. Par
OED's staff survey found that                                   contre, le Projet eau dans les
overall satisfaction with the Strat-  Subsisten los impedimentos  zones montagneuses du Lesotho
egy document is high: about 75  Hay tensi6n entre las exigencias  s'appuyait dans une large mesure
percent considered it thorough,  de la estrategia del Banco sobre  sur les principes de la Strategie,
consistent with Bank objectives,  recursos hidricos, las prioridades  mais la taille et la complexite
and relevant to current Bank    de los paises para el aprovecha-  memes de l'operation a conduit a
work and borrower needs. But    miento del agua y los servicios  mettre en place un organisme
among informed staff, almost 60  que el Banco puede prestar den-  d'execution national influent que
percent thought that the recom-  tro de las limitaciones impuestas  le gouvernement aura du mal a
mendations are difficult to moni-  por la organizaci6n interna, los  contr6ler, et la construction du
tor and somewhat platitudinous.  presupuestos, la dotaci6n de per-  barrage a eclipse les problemes
Many comments described the     sonal y las estructuras de incentiP  d'alimentation en eau et d'as-
Strategy as "another unfunded   vos. En materia de abastecimiento  sainissement. Une planification
mandate." Independent reviews   de agua y saneamiento, y mas    d'ensemble est certes essentielle,
commissioned by OED also found  recientemente, de medio ambi-   mais on peut obtenir de meilleurs
that the Operations Policy is diffi-  ente, el Banco ha aprovechado su  resultats avec des operations de
cult to use as a guidance docu-  ventaja estrategica; pero en otras  developpement specifiques, d'une
ment: "It is too brief and abstract  esferas, particularmente la del  envergure raisonnable et echelon-
for most practitioners and Bank  riego, el Banco necesita una   nees dans le temps.
staff," noted one respondent.   reforma interna para aumentar su
Compounding this, the reviews   eficacia.                       Des obstacles demeurent
found that the Strategy needs to  Es preciso fortalecer los vincu-  II est difficile de conciier a la fois
be revised, based on lessons and  los internos en el Banco e incor-  les imperatifs de la strategie de
international best practices. In  porarlos en las actividades de  I'eau de la Banque, les priorites
this, the Bank needs to develop  desarrollo, en particular en cuanto  des pays en matiere de mise en
sensitive, flexible guidelines that  a centrar el enfoque del desarrollo  valeur de l'eau et ce que la
permit staff to set assistance prior-  en la mitigaci6n de la pobreza y el  Banque peut accomplir compte
ities and to determine acceptable  fortalecimiento institucional. Para  tenu des contraintes qu'imposent
tradeoffs in cases where the water  un tratamiento integral al tema de  l'organisation interne, les budgets,
Strategy imposes competing      la ordenaci6n de los recursos   la composition du personnel et
demands or where elements of    hidricos entrania altos costos de  les structures d'incitation. Dans les
the Strategy are not likely to be  transacci6n, sobre todo debido a  domaines de l'alimentation en eau
successful.                     que muchas politicas de salva-  et de l'assainissement, et plus
guardia se aplican al desarrollo  recemment clans celui de l'envi-
A Truly Comprehensive           relacionado con el agua. Por eso,  ronnement, la Banque a exploite
Strategy                        los directivos a cargo de las opera-  son avantage strategique. Mais
The prediction of a global water  ciones en los paises consideran  dans d'autres domaines et partic-
crisis makes it important for the  que muchas intervenciones relati-  ulierement dans celui de l'irriga-
xxiii



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Bank to reposition itself to    vas al agua son iniciativas     tion, elle doit engager des
meet the challenge. This is  _  riesgosas en momentos en        reformes internes pour
i creating opportunities for         que disminuyen los recur-       devenir plus efficace.
the Bank to implement a         sos del Banco. Ademas, el         11 faut renforcer et syste-
comprehensive water man-   i    aprovechamiento de los      4   matiser les liens entre les
agement strategy 'along the     recursos hidricos suele tras-   services de la Banque - en
following lines:                cender las fronteras y la       particulier pour mieux cen-
* Aim country dialogue          dimensi6n internacional         trer les actions de
and institutional development at  aumenta la complejidad.     developpement sur la lutte contre
making water development        Hasta 2000, no se habia enco-  la pauvrete et le renforcement des
more responsive to social and  mendado a ningun grupo la     institutions. Le traitement global de
environmental concerns and    supervisi6n y formulaci6n a nivel  la gestion des ressources en eau
give more attention to alloca-  de todo el Banco de la reorgani-  implique des couts de transaction
tion issues.                  zaci6n institucional necesaria para  eleves, en particulier parce que
* Nurture commitment to the     asegurar un enfoque coherente de  beaucoup de mesures de sauveg-
strategy through shared objec-  la ordenaci6n de los recursos  arde s'appliquent au developpe-
tives, realistic diagnostics, and  hidricos. Existen buenos modelos,  ment lie aux ressources hydriques.
partnerships aimed at policy  especialmente en las regiones de  C'est pourquoi les responsables-
reform and capacity building.  Africa y de Oriente Medio y Norte  pays considerent que les interven-
* Create and sustain comprehen-  de Africa; se espera que el nuevo  tions dans le secteur de l'eau sont
sive water management         Grupo del Banco encargado de la  des operations risquees a un
alliances with like-minded part-  gesti6n de los recursos hidricos,  moment oui les ressources de la
ners in the private sector, civil  creado a principios de 2000 den-  Banque diminuent. En outre, la
society, and the development  tro de la Vicepresidencia de Des-  mise en valeur de l'eau transcende
community.                    arrollo Social y Ecol6gicamente  souvent les frontieres, et la dimen-
* Strengthen internal Bank man-  Sostenible, encarara esas cuestio-  sion internationale ajoute a com-
agement and monitoring and    nes en el documento de estrategia  plexite des operations.
evaluation of water resources  sobre recursos hidricos.         Jusqu'en 2000, aucun groupe
management activities through                                 n'a ete charge de proceder a la
a more streamlined organiza-  Es preciso contar con mejores   reorganisation institutionnelle de
tion. Foster more cohesive    directrices                    1'ensemble de la Banque qui s'im-
country and water sector strate-  En la encuesta del personal reali-  pose afin de lui permettre
gies, enhanced core competen-  zada por el DEO se comprob6    d'adopter une approche
cies, additional operational  que en general, hay gran satisfac-  coherente pour la gestion des
guidance and training, and    ci6n con el documento de la    ressources en eau, et de suivre le
more rigorous quality assur-  Estrategia: un 75% de los encues-  deroulement de cette restructura-
ance arrangements.           tados opinaron que era completo,  tion. Mais il existe des modeles
que guardaba coherencia con los  valables, notamment dans les
objetivos del Banco y que era   Regions Afrique, et Moyen-Orient
pertinente a la labor actual del  et Afrique du Nord. Et le nouveau
Banco y las necesidades de los  Groupe de gestion des ressources
prestatarios. Pero de los funciona-  en eau cree au debut de l'an 2000
rios competentes, casi 60% opina-  au sein de la Vice-presidence
ron que las recomendaciones son  Developpement ecologiquement
dificiles de supervisar y algo tri-  et socialement durable (ESSD)
viales. Muchas observaciones alu-  s'attaquera sans aucun doute a
dieron a la Estrategia como "otro  ces questions dans le document
mandato sin financiamiento". En  de Strategie sectorielle pour les
examenes independientes enco-   ressources en eau.
xxiv



Executive Summary
mendados por eL DEO tam-         1I faut ameliorer les
bien se comprob6 que la          directives
politica operacional es difi-    L'enquete menee par l'OED
cil de utilizar como docu-       aupres des services de la
mento de orientaci6n: "Es        Banque montre que le taux
demasiado breve y abs-           de satisfaction concernant la
tracta para la mayoria de  UL    Strategie est eleve: environ
los profesionales y de los       75 % des agents considerent
funcionarios del Banco", dijo un  que ce document presente une
encuestado. En los examenes      analyse fouillee, coherente avec les
tambien se comprob6 que es pre-  objectifs de l'institution et qui cor-
ciso modificar la Estrategia sobre  respond bien aux activites actuelles
la base de las ense-nanzas recogi-  de la Banque et aux besoins des
das y las practicas 6ptimas inter-  emprunteurs. Mais pres de 60 %
nacionales. Al respecto, es preciso  des agents informes.ont estime que
que el Banco elabore directrices  les recomrnandations sont difficiles
perceptivas y flexibles que permi-  a contr5ler et qu'elles sont assez
tan al personal establecer priori-  banales. Beaucoup decrivent la
dades de asistencia y determinar  Strat6gie commne a un autre mandat
soluciones de compromiso acep-   qui ne fait pas l'objet d'un finance-
tables cuando la Estrategia sobre  ment o. Des enquetes indepen-
recursos hidricos imponga exigen-  dantes demandees par l'OED
cias en pugna o cuando sea       montrent aussi que la politique
improbable que algunos de sus    operationnelle est difficile a utiliser
elementos surtan efecto.         comme document de reference:
- C'est trop succinct et trop abstrait
Una estrategia                   pour la plupart des hommes de
realmente integral              terrain et des agents de la Banque
Habida cuenta del pron6stico de  a note une personne interrogee.
una crisis mundial del agua, es  Plus grave encore, les enquetes
importante que el Banco se repo-  montrent qu'il faut reviser la
sicione para responder ante ese  Strategie sur la base des enseigne-
reto. Esto crea oportunidades para  ments tires et des pratiques opti-
que el Banco aplique una estrate-  males internationales. A cet egard,
gia integral de ordenaci6n de los  il faut que la Banque elabore des
recursos hidricos acorde con los  directives rationnelles et souples
siguientes lineamientos:         qui permettent aux agents d'etablir
• Procurar que en el dialogo con  les priorites d'intervention et
los paises y en el desarrollo  d'operer les arbitrages necessaires
institucional el aprovecha-   lorsque la Strategie impose des exi-
miento de los recursos hidricos  gences antinomiques ou lorsque
responda mejor a cuestiones   certains de ses elements risquent
sociales y ambientales y preste  de se solder par un echec.
mas atenci6n a los problemas
de asignaci6n de recursos.     Une strategie veritablement
* Fomentar la adhesi6n a la      globale
estrategia a traves de objetivos  Avec la crise mondiale de l'eau
comunes, diagn6sticos realistas  qui se profile a l'horizon, il est
y alianzas orientadas a la    important que la Banque se repo-
xxv



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
reforma de las politicas       sitionne pour etre en
y al fortalecimiento de        mesure de relever cette
la capacidad.                   gageure, ce qui lui offrira
Establecer y mantener            l'occasion de mettre en
omds alianzas para la          ceuvr nene stratngie glob-
ordenaci6n integral del        ale de u'eau fondee sur les
agua con asociados afi-        principes suivants:
nes del sector privado,         * axer le dialogue avec les
la sociedad civil y los circulos  pays et le developpement insti-
de desarrollo.                    tutionnel sur la prise en
* Fortalecer la gesti6n interna, el  compte des questions sociales
seguimiento y la evaluaci6n del   et environnementales dans le
Banco de las actividades de       cadre de la mise en valeur de
ordenaci6n de los recursos        1'eau et se preoccuper davan-
hidricos, mediante una organi-    tage du probleme de reparti-
zaci6n simplificada, estrategias  tion des ressources en eau
sectoriales y nacionales mas    * encourager l'adoption de la
coherentes, competencias basi-    strategie en fondant l'action sur
cas mejoradas, mas orientaci6n    des objectifs partages, des
y capacitaci6n operacional y      diagnostics realistes et des
arreglos mas rigurosos para       partenariats axes sur les
asegurar la calidad.              reformes et le renforcement
des capacites;
creer et maintenir des alliances
larges pour la gestion de l'eau
avec des partenaires du secteur
prive, de la societe civile et de
la communaute du developpe-
ment qui partagent les memes
conceptions;
renforcer la gestion interne de
la Banque ainsi que le suivi et
1'evaluation des activites de
gestion des ressources en eau
par des mesures tendant a
rationaliser l'organisation de
l'institution. Encourager l'adop-
tion de strategies plus
coherentes pour les pays et le
secteur de l'eau, renforcer les
competences essentielles,
fournir des directives opera-
tionnelles supplementaires,
elargir l'eventail des formations
et prendre des dispositions
plus rigoureuses en matiere
d'assurance de la qualit.
xxvi



ABBREVIATIONS AND ACRONYMS
ADB           Asian Development Bank
AFR           Africa Region
APL           Adaptable Program Loan
BP            Bank Procedure
CAS           Country Assistance Strategy
CDD           Country-driven Development
CDF           Comprehensive Development Framework
CODE          Committee on Development Effectiveness
DFID          Department for International Development, U.K.
EAP           East Asia and Pacific Region
EC            European Commission
ECA           Europe and Central Asia Region
ESSD          Environmentally and Socially Sustainable Development Network
ESW           Economic and sector work
EU            European Union
FAO           Food and Agriculture Organization
GEF           Global Environment Facility
GP            Good practice
I&D           Irrigation & drainage
ICR           Implementation Completion Report
IDA           International Development Association
IFC           International Finance Corporation
IUCN          International Union for the Conservation of Nature
LAC (LCR)     Latin America and Caribbean Region
LIL           Learning and Innovation Loan
M&E           Monitoring and evaluation
MNA           Middle East and North Africa Region
NGO           Nongovernmental organization
O&M           Operation and maintenance
OECD          Organization for Economic Cooperation and Development
OED           Operations Evaluation Department
OP            Operational Policy
PIP           Project Improvement Plan
PROSANEAR     Water and Sanitation Program for Low-Income Urban Population, Brazil
PSI           Private Sector Infrastructure Board
PSP           Private sector participation
QAG           Quality Assurance Group
RDV           Rural Development Board
RWSS          Rural Water Supply and Sanitation
SA (SAR)      South Asia Region
SAL           Structural Adjustment Loan
SEA           Sectoral Environmental Assessments
UNDP          United Nations Development Program
UWSS          Urban Water Supply and Sanitation
WATSAL        Water Sector Adjustment Loan, Indonesia
WBI           World Bank Institute
xxvii



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
WRM           Water Resources Management
WSS           Water Supply and Sanitation
WUA           Water User Association
WW.TV         World Water Vision
xxvii'



The 1993 Strategy-
Still Relevant Today
T         he Strategy embodied in the 1993 Water Resources Management: A
World Bank Policy Paper is the benchmark for this evaluation.' It
evolved in response to growing unease within the Bank that water
operations were failing to deliver sustainable development and growing inter-
national concern about the mismanagement of global water resources and
poor service levels, particularly for the poor.
A Strategy Was Overdue                     promote compliance with cost-recovery provi-
When the Bank's water Strategy was issued,  sions and the implementation of water tariffs and
water-related projects were among the poorer  charges that reconciled economic efficiency,
performers in the Bank's portfolio. This was  social equity, financial criteria, and autonomous
emphasized by the influential Wapenhans Report and independent regulatory systems.3 Thus, to
of 1993, which was highly critical of the qual- improve water supply and sanitation in bor-
ity of the Bank's water lending as shown in the  rowing countries, OED recommended that the
findings of OED sector reviews of water supply  Bank should embark on medium-term programs
and sanitation and of iriigation and drainage, and  focused on sectoral adjustment and technical
trends in OED outcome ratings.2           assistance-followed by investment lending only
These sectors had neither comprehensive  when minimum and monitorable conditions for
water development policy nor guidelines. Almost  healthy expansion were met.
half the water supply and sanitation projects  Minimal policy and institutional content were
were begun without an established policy for the  also the hallmarks of the irrigation and drainage
sector-and without studies in the sector con-  portfolio-despite a marked shift in the late
text. Most failed to tap the synergy available from  1980s toward sector loans and a definite trend
complementary investments in sanitation and  away from new construction, toward rehabili-
environmental protection. Poverty considera-  tation. An increasing aversion to projects involv-
tions were mostly bypassed as the Bank    ing safeguard policies prevailed, particularly
responded to the pressure from influential seg-  involuntary resettlement and land acquisition.
ments of the population for better water and san-  Insufficient integration of engineering and social
itation services. There was a general failure to  science jeoparclized better irrigation service to



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
people, lower unit costs, and water conservation. endures that the severity of the world's water
Financial sustainability was elusive because  problems requires a strategic approach that
incentive structures that enabled stakeholders to  emphasizes the equitable and sustainable man-
work together to improve performance were  agement of water resources.
ignored. While effective in reaching the rural
poor, the perceived success of irrigation projects  Strategic Approach to Equitable and
was strongly affected by macroeconomic con-  Sustainable Water Management
ditions, emphasizing the need for comprehen-  The Strategy paper was the outcome of a hot
sive appraisal. Clearly, there was a need for debate. It fell hostage to another debate over
better policies and a strategic approach to guide  public access to information-a debate not
the Bank's water investment and non-lending  resolved until 1993-making it doubly con-
work.                                    tentious. Following protest letters from non-
governmental organizations (NGOs) representing
The Bank Strategy                        24 borrowing and 8 other countries, the Bank
The 1993 Bank Strategy described water policies  convened a consultative workshop in Washing-
needed to guide internationally sponsored water ton, D.C., in May 1992. The lessons from this
development. And today, most of the major  workshop made a substantial difference to the
multilateral development agencies and several eventual content of the Strategy paper-but not
bilateral agencies have adopted, or are formu-  without extensive lobbying pressures. The penul-
lating, water policies. With few exceptions, these  timate draft reflected divisions within the Bank
policies derive from the Dublin principles (box  between those who would rely on privatization
1.1) and are consistent with the Bank's Strategy. and market forces to solve the problems of the
The relevance of the key principles underly-  water sector and those who preferred a more
ing the Bank's Strategy was reaffirmed by the  comprehensive and participatory approach. The
1997 United Nations General Assembly Special final paper accommodated both perspectives.
Session, which called for urgent action to address  The Dublin and Rio Conferences, as well as
a looming freshwater crisis-and respond to  contemporary Bank work, influenced the Strat-
increasing Organization for Economic Cooper-  egy. These ideas and principles were driven by
ation and Development (OECD) concern about the concerns of global NGOs in the late 1980s
persistent water quality problems, the need for and earlier Bank statements, operational direc-
heavy investment in water delivery and treatment tives, and notes-the most important of which
infrastructure, and growing competition for finite  emerged in 1989-92.4 They were largely devel-
supplies (OECD 1998). Indeed, a consensus  oped by a coalition of water professionals from
developing and developed countries. An over-
riding concern of all involved was that dwindling
T h e D u b l i n              water resources had to be distributed more
Box 1 . 1        G       u dub  in               widely (figure 1.1) and protected from degra-
Guiding      Principles         dation (Shildimanov 2000a).
o.t. ..   The Strategy paper recognized that improv-
o ,:vq,s' 1 ;L 11 -_ 1 jl. ri 11ll i: [II  KC iML;!' '' " :"_pl   ing performance in meeting water needs requires
-i            IpT-il l clA-r,i . rol li,,- l,afl,l,Th :ui~  borrowing countries to reform their water man-
o 5':i)fL  lI;,; 1 :  IBI  __ 4tilh  '              agement institutions, policies, and planning sys-
1 iI  tems. It also acknowledged that this would
require changes to the Bank's internal processes,
o \'aiyo1c (lili          tA&             Quo ] Tb-  training, skills mix, and resources assigned to
gmuft dvw=                                        water and water-related operations. The main
o                         lr 7iGM    ctf f1 df]     recommendation was that a new approach-rec-
ooXDzglbqD9''           l G3ial                   ognizing that water is a scarce natural resource,
subject to many interdependencies in con-
2



The 1993 Strategy-Still Relevant Today
Water Availability Continues to
Figure 1 .1        Decline in Developing Countries
0 100%-
U,
E                                    De,veloped countries
6 0% -
.                   '***     D~~~~~~~~..eveloping countries - humid
CD 
>  40%4-
3                                    DeveopedcountriesDeveloping coun  ..
m  20%-
Cu
0%
. 20%-IIIIIII
a-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1950    1960    1970    1980    1990    2000    2010    2020     2030
Year
veyance and use-should be adopted by the  ulations to be adopted across sectors . . . in
Bank and its member countries.           countries where significant problems exist,
The twin requirements of comprehensive-  or are emerging, concerning the scarcity of
ness and country-specificity are the centerpiece. water, the efficiency of service, the allocation
Together, they challenge the Bank to avoid  of water, or environmental damage" (World
cookie-cutter blueprints for institutional reform  Bank 1994d, pp. 10-11, 13). There thus are
and water-sector management-and challenge  two major thrusts: to produce an overarching
borrowers to look beyond the short-term gains  water resources management framework that
from discrete projects. The aim is to:   integrates the needs of the water service sub-
* Maximize the contribution of water to coun-  sectors and a reform agenda and innovations
tries' economic, social, and environmental to improve the relevance, effectiveness, and
development while ensuring that resource  sustainability of the main water services
and water services are managed sustainably.  subsectors (figure 1.2). Traditionally, the
* Encourage and help countries establish com-  majority of the Bank's operations dealt with
prehensive analytical frameworks to foster  subsector development.
informed and transparent decisionmaking,  Country situations and constraints provide
with an emphasis on demand management. the pattern to tailor the comprehensive frame-
* Promote  decentralized  implementation  works. Recognizing that many borrowers
processes and market forces to guide the  would need help in designing a suitable ana-
appropriate mix of public and private sector  lytical framework and implementing the cor-
provision of water services.          responding   reform  effort, the Strategy
committed the Bank to assist governments in
The comprehensive analytical frameworks  institutional reforms and in establishing a
advocated in the Strategy paper are to help  strong legal and regulatory framework for
guide decisions about water resources and  dealing with pricing, monopoly organizations,
"enable coherent, consistent policies and reg-  environmental protection, and other aspects of
3



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
A Comprehensive Framework for
Figure 1.2          Water Management
/                .   ~~~~~~Integraited Water'.Re'sources Ma'nagement2 
Policies :r
.Strategies,-
Strategies~~~~~~~~~*               P~ollution      Energy
Institutions          Water        Irrigaoon   control
Instruments         supply and      and                       Navigaton
sanitation    drainage     Wetlands        Flood
Fisheries    management
Biodiversity
People         Food      Environment       Other
security
Water Service Subsectors
Source- After Global Water Partnership (20001
water management (World Bank 1994d). The  * Adopt water rights, pricing, and incentives
main areas of emphasis in the 1993 Strategy  (including adoption of new technologies and
are to:                                     managerial approaches) to encourage rational
• Build institutional and regulatory capacity in  and efficient allocation of water among com-
borrower countries sufficient to enable bor-  peting uses, discourage waste, and ensure
rowers to implement and sustain the com-  adequate water services.
prehensive approach to water-sector planning  * Ensure that water operations enhance human
and management.                           and natural environments, with special atten-
* Support international cooperation on man-  tion to safeguards, social impacts (particularly
agement and use of international waterways  on women), and meeting the needs of the
and bodies, recognizing that a truly compre-  poor.
hensive approach to water-resource man-
agement extends beyond the borders of   New Approaches and Initiatives
individual borrowers and beyond the time-  Are Even More Critical Today
frame of individual projects.           Apart from the attention needed to reform old
* Draw on the comparative advantages of   institutions and organizations and build new
organizations outside the Bank and involve  ones to deal with the strategic issues in water
stakeholders in decisions that affect them.  development, the most daunting challenge is to
Decentralization, participation, and partner-  mobilize funds. World Water Vision (WWV) 2000
ships are key instruments to increase stake-  estimates that the annual investment to meet all
holder ownership and accountability, build  water supply and sanitation, irrigation, industrial,
capacity, and ultimately lower the cost and  and environmental management needs by 2025
improve the effectiveness of operations,  will be $180 billion-today it is $70-80 billion
maintenance, safeguards, and monitoring and  (table 1.1). The WWV team postulated that
evaluation.                             investment for agriculture (mainly irrigation and
4



The 1993 Strategy-Still Relevant Today
Ta b I e  1. 1              u a      n v e s t m e n t   f o r  W a t e r   M u s t
.r e a s e
Water use                                                      . ..        r ..  , .
Agriculture                          alt:  I     E    -     °  -                 {,O
Environment and industry              ,                 ;
Water supply and sanitation            i ;                                       I
Total              ';I                            A                .
Source: WWC 2000.
Ta bIe    1 .2       A    i'luch    Greater         Role     for    t h e
T1v a t e     Sector
Source                                   ''' 'ii' 1 l
National                        . .
Publicsector                    . u
Private firms                         F il         .,
International
Donors                                                       . ,
Private investors                                   ,   -   ti'
Total            .                 - .  ,  .                                  ___
a. Assumes direct government subsidy of $20 billion to the poor
b. Does not include investment by industry
c Includes investment by industry, excluding hydropower.
Source: WwC 2000.
drainage) declined because the era of costly,     The Commission Report of the Second World
large-scale public capital investment in new irri-  Water Forum (March 2000) stated that:
gation is almost at an end-and that more effi-    To ensure that environmental quality is
cient user-managed rehabilitation, operation,     improved and people's needs are met, there
and maintenance are likely.5 The public sector    must be a redoublecl effort at technological,
provides most of the investment (table 1.2), but  financial, ancl institutional innovation. With
private investments (including contributions by  regard to technological innovation this means
industry) of $138 billion a year, or almost 70 per-  mobilizing the knowledge and investment
cent of the total, will be essential.             capacity of the private sector and supplementing
Even international donors are expected to     it with strategic investments. With regard to insti-
increase their contribution by a third-to $12 bil-  tutional innovation, the core challenges are
lion. This massive increased investment-which     stimulating new forms of involvement of citi-
would be even greater if irrigation and drainage  zens in managing water and providing incen-
investment were to increase-can be achieved      tives for private sector involvement. The
only if developing countries are able to create an  Commission emphasizes that unless full-cost
investment climate conducive to the private sec-  pricing for water services becomes accepted
tor and able to absorb these investments. This    practice, none of these will succeed. With com-
requires political stability and attention to     mitment, however, the problems can be over-
governance and institutions-particularly property  come. A secure world is possible, but we must
rights, rule of law, transparency, and participation.  change the ways we manage water.
5



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
This statement supports the assertion that the  ing the Strategy to ensure congruence with over-
Bank's 1993 Strategy is highly relevant to cur-  arching Bank priorities (poverty reduction,
rent global priorities. Fine-tuning will enable  governance, sound economic and fiscal man-
the Bank to make adjustments in response to les-  agement) and the greater focus on achieving
sons from positive and negative changes in the  results consistent with the Comprehensive Devel-
operating environment. That will involve updat-  opment Framework (CDF).



-~~A
The Bank's Water
Assistance and Portfolio
T         he Bank has substantially realigned the composition of water oper-
ations and non-lending work to incorporate crosscutting water
Strategy issues in a diverse set of countries.
Different Countries Present Different      * Water-short Mexico and Yemen are striving to
Challenges                                   sustainably manage groundwater in the face
Bank actions are generally only a modest driv-  of competing urban and agricultural water
ing force behind water management reforms, ex-  demand.
cept in small countries. Even then, reform  * The rapidly urbanizing populations of Brazil,
requires aligning Bank interventions with coun-  China, and India face the key challenges of
try conditions and other international actors.  providing water and sanitation while con-
Other development institutions, including mul-  trolling pollution that reduces the resource
tilateral and bilateral development agencies and  base.
nongovernmental organizations and the private  * In the central Asian republics, triage to de-
sector, can and do influence the pace and di-  termine appropriate maintenance and reha-
rection of reform. Promoting collaboration with  bilitation of failing irrigation systems is among
these international actors is an important element  the major development issues.
of the water Strategy, particularly in large coun-  * In Honduras and St. Lucia, land use policies
tries-China, India, Mexico, and Brazil-where  and regulation are key to sustainable water-
it is essential to improve selectivity by leverag-  shed management.
ing the relatively small external assistance. For  * While Pakistan is focused on solving its mas-
example, India is the second-biggest Bank bor-  sive drainage problems and resultant salin-
rower for water, yet the Bank's credits have pro-  ization, flood control has traditionally
vided only about 10 percent of national water  dominated the agenda in Bangladesh.
investment and less than half of all external as-
sistance for water development (Pitman 2001).  The challenge of comprehensive water
The design of relevant reforms and the time  resource management continues to be address-
frame for their implementation crucially depend  ing these critical development issues, and cop-
on the internal dynamics and water situation of  ing with such natural disasters as drought and
the country:                              the results of El Nino-all without neglecting
7



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
environmental management, institutional de-  Global Environmental Facility (GEF), has been
velopment, and financial, economic, and social involved in 17 PSP operations. Bank Group in-
sustainability. While the impact, scale, and tim-  vestments in PSP, which exceed $680 million,
ing of global warming on water resources and  cover 12 countries, of which a third are in the
sea levels are contentious, the likely effects need  low-income category eligible for IDA funding.
to be included in the discussion of long-term re-
gional and global water strategies.       Economic and Sector Work
Economic and sector work (ESW) for water has
The Mix of Instruments Has Changed        more than doubled since 1991. In 1992-98 the
The Bank's work has remained primarily'at the  number of ESW reports rose from 25 a year to
country level, complemented by selected global  about 30, falling back slightly during the Bank
programs. The custom package of assistance  reorganization of 1997. Unlike much of the ear-
depends on a country's needs. Over time, the  lier work, which dwelt on traditional technical
mix and nature of Bank products and services  issues, ESW after 1992 fully embraced the themes,
has changed and the Bank has increasingly  policy instruments, and objectives of the new
leveraged its other assets-cross-country expe-  Strategy, moving away from traditional water
rience, and relationships and capacity to connect management toward roles for the private sector,
clients with additional sources of finance, tech-  participation, and comprehensive water man-
nical expertise, and partnerships.        agement (figure 2.1). ESW on the private sector,
pricing, and markets has seen the biggest increase
Lending                                   in attention, but most of this work concerned
The range of instruments has changed in the last water supply rather than either sanitation or ir-
decade. Traditional specific investment lending  rigation and drainage. Social assessments have
dominates (80 percent), followed by specific in-  been notably absent. Partnerships to promote
vestment and maintenance loans (10 percent).  global public water and capacity building are the
But within this category, loans have financed a  most notable innovation post-Strategy.
wide range of activities, from single small-scale
projects to complex programmatic sectoral op-  Partnerships
erations. Poor experience with technical assis- Building global and regionalpublicpolicy. The
tance loans caused them to be reduced by a  Bank has been instrumental in forming and sup-
third, and only six were made post-Strategy.  porting a growing number of international part-
Adaptable Program and Learning and Innovation  nerships. Notable are the Global Water
Loans, introduced Bankwide in 1997, accounted  Partnership and the World Water Council in
for only 7 of the 201 operations since 1993.  1996. The two bodies have similar and over-
Sectoral Adjustment Loans (SALs) have been  lapping objectives, but they differ in the way they
used sparingly, most notably to leverage reform  contribute to sustainable water resources man-
in Jordan, and an ambitious SAL for water is cur-  agement. The World Water Council is more a
rently being completed for Indonesia.     forum than a network, views itself as the world's
Since 1989, the Bank has successfully facili-  water policy think tank, and is publishing a
tated the privatization process to leverage large  new journal, WaterPolicy, which focuses on pol-
private investment. Private sector participation  icy aspects of water resources. Conversely, the
(PSP) in water supply and sanitation has grown  Global Water Partnership, initially chaired by a
remarkably, and took off in 1992 in response to  Bank Vice President, attempts to translate rec-
global liberalization and the easing of fiscal re-  ommendations for action on water management
straints. To date, more than $21.8 billion has been  into specific services for developing countries
invested for 86 water supply utilities, most of it and to catalyze funding mechanisms for service
in the well-governed middle- to higher-income  implementation. Through a consultative process,
developing countries. The Bank, with the In-  the partnership developed the Framework for
ternational Finance Corporation (IFC) and the  Action, establishing a shared view of appropri-



The Bank's Water Assistance and Portfolio
ESW Is Responsive to the Water
Figure 2.1          Strategy
Private sector, pricing,
and markets
Participation
Comprehensive water
management _
Water policy analysis
Environmental management
Institutional and regulatory
Sectoral reviews                                    *   Post-Strategy
Addressing the needs
of the poor _                                       Pre-Strategy
Water management
0     5    10    15   20    25    30    35    40   45    50
Number of ESW activities
Source: OED
ate strategies, mechanisms for implementation,  gional dialogue on water policy, development,
and priorities for immediate action and invest-  and management. The 1997 MNA Regional Water
ment to obtain a World Water Vision. The frame-  Policy Initiative is a partnership with the Euro-
work was presented at the Second World Water  pean Union (EU) and the European Investment
Conference organized by the World Water Com-  Bank. The Africa Region hosted the Africa Water
mission at The Hague in 2000. The UNDP-World  Resources Management Policy Conference in
Bank Partnership on International Waters was es-  Nairobi (May, 1999), leading stakeholders to es-
tablished in 1998.                         tablish an African Water Resources Forum to
Not all global policy partnerships are long-  exchange knowledge among African profes-
term or formal. The World Commission on Dams  sionals and practitioners. The Council of Minis-
received substantial buy-in across the globe,  ters of Water Affairs of the Nile Basin has asked
but was dissolved after issuing its final report in  the World Bank and its partners to organize and
November, 2000.1 An informal partnership be-  host a consultative group-the International
tween the Bank and Germany has sponsored   Consortium for Cooperation on the Nile-that
four international roundtables on transboundary  will seek coordinated and transparent support
water policy and management to support the  for cooperative projects in the Nile Basin. The
Global Water Partnership's Integrated Water Re-  Consortium will emphasize sharing the benefits
sources Management Window. In addition, the  of development rather than focusing on alloca-
Business Partners for Development partnership  tion alone.
has a three-year water and sanitation component  Capacity-building Partnerships. The oldest
sponsored by the Bank, the U.K. Department for  global water partnership-the 1977 UNDP-World
International Development (DFID), and private  Bank Water and Sanitation Program-has been
water companies. It is studying public-private  a model of governance for subsequent partner-
partnerships in eight countries to see what de-  ships. Supported by 11 bilaterals, it seeks to
termines success.                          "influence without taking over" in 30 countries.
The Africa and Middle East and North Africa  Aiming to meet the needs of the poor, it thus de-
(MNA) Regions of the Bank are facilitating re-  veloped self-standing demonstration programs
9



Bridging Troubled Waters: Assessing the. World Bank Water Resources Strategy
outside the scope of the Bank's lending program.  invest $70-80 billion in water development. Of
Managed by the Bank, it leverages bilateral  this, multilateral and bilateral agencies supply
experience into larger-scale investments by the  about $9 billion, of which the World Bank pro-
Bank and others-and builds capacity to    vides from $2 to $3 billion, or about 3 percent
strengthen  national policy  reforms  for  of the global funding for water.
community-based approaches.                 Between 1988 and 1999, the Bank approved
The World Bank Institute's (WBI) Water Pol-  $28.8 billion (1996 dollars) for water projects,
icy Capacity Building Program meets the demand  including 319 country-based investment opera-
for knowledge and learning dissemination sup-  tions and one regional program (the Aral Sea), ris-
ported by formal training. Supported by four UN  ing from 56 countries before 1993 to 70 after.2 In
agencies and five bilateral partners since 1994, addition, the Bank lent about $6.2 billion for
borrowers qualify if they show commitment to  water-focused investments in 91 other projects that
water reform and if Bank staff judge the sus- included significant water development compo-
tainabiity of program impact to be likely. Rated  nents.3 Comparing lending for water before and
as successful by clients, the program has reached  after the Strategy shows an increase of 21 percent,
9,000 participants in 90 countries. Almost half of from $14.5 to $17.5 billion, while overall Bank
participants surveyed said that WBI-sponsored  lending increased by 9.4 percent. As a result, the
activities initiated country reforms of water man-  Bank's portfolio of water projects rose steadily
agement policy.                           from 10 percent of total projects in 1988 to 14 per-
The Bank has also been successful in enabling  cent today, even though the share of lending for
local initiatives to grow into international part-  water has declined since 1997 (figure 2.2).
nerships to build capacity and country owner-  Of the lending for water, a third went to East
ship for sectoral reform. A 1995 WBI workshop  Asia and the Pacific (EAP), a fifth each to South
in Mexico gave rise to the International Partici-  Asia (SA), and to Latin America and the Caribbean
patory Irrigation Network, which now has mem-  (LAC), with the balance divided among Africa
bers in over 44 countries and national chapters  (AFR), Europe and Central Asia (ECA), and the
in the 10 biggest borrowers for irrigation. The  Middle East and North Africa (MNA). This dis-
Network supplements the former Bank-      tribution is similar to that of overall Bank lend-
sponsored International Program for Research in ing. The volume of lending for water remained
Irrigation and Drainage that moved to the Food  heavily concentrated before and after the Strat-
and Agriculture Organization (FAO) in 2000.  egy, with more than half going to only five coun-
Since 1996, the Bank has supported the African  tries: Brazil, China, India, Indonesia, and Mexico
Water Utilities Partnership for Capacity Build-  (figure 2.3). The share going to China and India
ing, which organizes management assistance  increased from 25 percent before 1993 to al-
from more experienced partners to utilities serv-  most 40 percent after. Indeed, the overall port-
ing rapidly growing urban populations. A simi' folio became more concentrated: 85 percent of
lar partnership is being developed for South  lending covered 48 countries before the Strategy,
Asia. In 2000, a new Bank-Netherlands Water Part-  but only 24 countries after.
nership emanating from the Second World Water  Because the Bank's water activities are frag-
Forum began mobilizing significant Dutch fund-  mented across many sectors, Bank involvement
ing to apply practical experience, lessons, and  in water development is considerably greater
innovation to Bank-supported operations.  than suggested by Bank statistics for the tradi-
tional water sectors. The composition of the
A Larger Portfolio Whose Quality Has      Bank's water portfolio has been realigned sig-
Improved, Albeit Unevenly                 nificantly since 1993, mainly because of an in-
The Bank is the only lending institution with a  creased focus on the environment and on
global mandate to improve water management,  multisectoral projects, watershed development
and its most visible assistance has been invest- in agriculture projects, and social sector, trans-
ment lending. Each year, developing countries  port, and urban investments (figure 2.4).4
10



The Bank's Water Assistance and Portfolio
The     Upward       Trend      in   Banl1     Lending
Figure 2.2          for Water May Be Over
20 -
Projects
15 -
0
198B        1990        1992        1994         1996        199B
Year
Source: OEO.
Bank commitments to the "other sectors" cat-  cultural development projects and social sector
egory grew eightfold after 1993 to reach $6.2  projects (table 2.1). As a result, the amount lent
billion. And most of this was for water devel- (but not the number of projects) to the tradi-
opment embedded within more general agri- tional water subsectors (water supply and san-
Le nd i ng       f or  Wa t er   H as   B ee n
F i g u r e 2 . 3   C on c e nt ra t ed      i n  R e I a t i v e I V  Fe w
C o u n t r i e s
China                             ab%                          -    27%
India                  10014
Indonesia  _e.7      %
C.)~~~~~~~~~~~57
Mexico  _56.0%
Brazil         19            13 2%
Pakistan    3S
Turkey CEO.
Vietnam c2.2s t                                Post-Strategy, 199u99 p
Peru e   2.2% a                              Pre-Strategy 1983-93
Bangladesh  _2A%
0         1,000      2,000      3,000      4,000      5,000      6,000
Millions of dollars and percentage of total lending
Source:COED.



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Lending to the Traditional Water
Figure 2.4           Sectors Has Declined Since the
1993 Strategy
Other sectors
Irrigation and drainage
Water supply
and sanitation
Environment
Hydropower                                  *  Post-Strategy, 1994-99
Fisheries                                 *  Pre-Strategy, 1983-93
0      1,000    2,000   3,000    4,000   5,000    6,000    7,000
Millions of dollars committed
Source. OED.
itation, irrigation, and drainage) declined. Given  as good as other sector projects in complying
that most "other sector" water projects are em-  with the Country Assistance Strategy (CAS)
bedded in operations managed by nonwater    poverty strategy.5 Despite this, more water in-
staff or are not managed at all in demand-led so-  vestment goes to poorer countries than Bank in-
cial funds, there is growing concern that water  vestment as a whole, primarily because irrigation
policy oversight and coherence is being diluted.  and drainage investments have become more
That makes it more difficult to apply the prin-  sharply focused on the poorest countries. Indeed,
ciples of the Strategy.                     the poverty focus of irrigation and drainage
projects rose by 23 percent after the Strategy.
The Poverty Focus of Water Operations Is    Conversely, formal water supply and sanitation
Getting Better                              operations declined by 13 percent-primarily be-
The Strategy gives priority to the provision of ad-  cause of the increased focus on lending to fi-
equate water and sanitation services to the poor.  nancially viable urban utilities that outweighs the
OED's analysis of Bank Quality Assurance Group  new generatiori of pro-poor rural Water Supply
(QAG) data found that water projects were not  and Sanitation (WSS) projects. Indirect lending
Wate r S u pp I y       a n d   Sa n itatio n      I n vestme nts
Table 2.1          iin Nontraditional Sectors Are Increasing
Investment ($millions)"    i3          1994-99   Projects (number)            _994-99
Official WSS                r           3,984    Official WSS                10            67
Other sectors                          '10181    Other sectors                             53
Total                                   5,165    Total                        X           120
a Constant 1996 US $
Source OED data
12



The Bank's Water Assistance and Portfolio
for WSS implemented through community-driven  propriate and realistic reform measures, or in tai-
social funds is strongly pro-poor.        loring project design to meet the needs of tar-
Compelling evidence exists that social con-  get populations.
cerns are being increasingly addressed in water
operations (figure 2.5), but it is too soon to  But There Are Subsectoral Differences
judge outcomes.6 Increasing poverty analysis  Water projects as a whole ranked behind
and establishing institutional mechanisms to tar-  Bankwide projects in conducting adequate analy-
get the poor and monitor impacts of Bank in-  sis of the institutional framework-and were
vestments on poverty enhanced the focus on  less realistic in financial appraisal. This was pri-
poverty alleviation through water operations.  marily because of the rural sector's weakness in
But substantial room remains for targeting the  designing financial management systems and
poor and vulnerable populations within water  poor assessment of project risks in irrigation
sector operations. Of most concern across the  and drainage. In their approaches to social de-
Bank is the scant attention given to the direct im-  velopment concerns in project design, irriga-
pact of these operations on the poor.     tion and drainage projects fare significantly
better than water supply and sanitation. They are
Overall Project Design Has Been Improving  more participatory, incorporate the views and
The quality of water operations at approval is  wishes of various stakeholders better in the
generally better than the quality of all other  project design, and do a much better job of
Bank investments, according to QAG data, but  putting in place social impact and poverty mon-
with some deficiencies. While water operations  itoring mechanisms. Water supply and sanitation
address social and stakeholder analysis better  projects, by contrast, articulate their development
than other Bank subsectors, they are notably de- -objectives more clearly-and they are 25 percent
ficient in forming appropriate partnerships with  better than the irrigation and drainage portfolio
other development partners, in pushing for ap- on satisfactory analysis and treatment of insti-
Inclusion of Social Development
Figure 2.5          and Poverty Concerns in Water
Projects Has Been Increasing
Percent, two-year project cohort (n=1 18 projects in total)
90 -
80  -                                             _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
70 -
60  -               _ _ _ _ _             _ _ _ _ _ _
50  -  -_                                __
40-    -                                  -         _
30 -          __________                           -_-- Pove   focus
-2-- Community participation
20-
10Ž- 0Gender
10                                                 -0-- Resettlement
0 -                        I      I                 I    lI
1986-88     1989-90      1991-92     1993-94     1995-96      1997-98
Year
13



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
tutional issues, and on the quality and coherence  and sanitation. But it was not as bad as natural
of economic justification.                resources management, which was way below
The weakness of rural sector water operations  the Bank average.
also increases the risk of implementation prob-  The irony here is that more "realism" will lead
lems. Factors contributing to the risk are coun-  to a more problematic portfolio. In the MNA Re-
try conditions threatening achievement of gion the high-risk water supply and sanitation
development objectives-economic manage-   portfolio appears to reflect the Bank's tough
ment and past portfolio performance-and the  and principled stand on urban water reform in
vigilance of sector management. In "realism,"  a difficult Region, rather than flawed project
which flags chronic overoptimism and a failure  design and supervision.7 Of the 16 Bankwide
to recognize implementation problems early on, water supply and sanitation problem projects, 3
natural resources management and water sup-  had risk factors that were political; 3, institutional;
ply and sanitation were near the Bank average  and the remaining 10, financial and managerial.
(74 percent), while irrigation and drainage were  None of the Bank's irrigation operations high-
much less realistic. Sector management was also  lighted financial or utility management risks be-
less proactive in addressing lingering problems  cause there were few benchmarks against which
in irrigation and drainage than in water supply  to judge them.
1 4



hA.
The Water Strategy Has Been
Only Partially Implemented
T         he Bank has not widely adopted the comprehensive principles at
the heart of the Strategy. This is less a failure, however, than it is an
indication of the complexity of water sector reform, which even in
OECD countries takes 10-20 years.
Only two of the six Bank Regions (AFR and  gies within the CAS framework, a benchmark of
MNA) have produced regional water strategies  successful Strategy implementation. But this re-
in line with the Bank Strategy, and only one  quires significant cross-sectoral coordination, a
(MNA) has developed country and sector strate-  duty for which Bank staff have few incentives
gies driven by a regional sequencing of priori-  and inadequate resources. If water is mentioned
ties for action. By contrast, some Regions (LAC)  in a CAS, it is more likely to be water supply and
are bundling subsector strategies to determine  sanitation, not irrigation) or comprehensive water
national and regional strategies. Few borrowers  resources management.' Water supply and san-
take a long-term holistic view that water is a vital itation, raised as an issue in 57 countries, is pro-
resource that needs careful stewardship to en-  moted as a way of improving health and labor
sure sustainability, equitable access, and use.  productivity and, hence, reducing poverty. Irri-
The number of cross-sectoral water resources  gation is mentioned in only 34 percent of CASs,
management operations is increasing only  and such issues as water user groups, partici-
slowly. Most Bank operations remain project-  patory management, and water rights occur in
focused because that is seen as the most effec-  less than a tenth. Of most concern is the near
tive way of building capacity, introducing  absence of water supply and sanitation issues for
reforms, and enabling economic and sector  Africa CASs-a Region that is not only poor but
work in a time of declining budgets. Indeed, tai- is also experiencing rapid urbanization.
loring project design to the Strategy's service-  Only one CAS, for water-short Yemen, ex-
delivery initiatives appears to result in fewer  plicitly promotes sustainable water resource use
problem projects and catalyzes reform.    and a need to focus' on water. For the other 97
countries covered by CASs, 64 have no reference
Treatment of Water Issues in CASs Has      to a comprehensive framework, a core require-
Been Weak                                 ment of the Strategy. A comprehensive approach
The Strategy emphasizes the critical importance  was found in the CASs for seven of eight mainly
of embedding projects in country water strate-  arid MNA countries (with significant water
1 5



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
issues), but only Ethiopia and Senegal in AFR.  These interpretation difficulties could be over-
Thailand, Vietnam, and the Philippines in EAP  come if the CAS included a table showing the
raise all three comprehensive management is-  country's status in all sectors and the reasons for
sues: water policy, water management, and a na-  the Bank's level of involvement in each sector
tional framework plan. In ECA, the management or subsector. This would also have the advan-
of international waters and the control of water  tage of making the selectivity criteria for Bank
pollution have been a major theme in CASs.  involvement more transparent, probably en-
The mention of water strategy issues in a  hancing synergistic partnerships with other as-
CAS is not enough to bring attention to needed  sistance agencies.
reforms and not a very good measure of the ef-
ficacy of the water strategy and of ESW.2 Negli-  Projects Have Become More Responsive
gible comment in the CAS could mean there are  to the Strategy
no problem issues-or that they are addressed  The new generation of economic and sector
either satisfactorily through Bank operations or  work has changed the design of Bank water
outside the framework of Bank country assis-  projects. Evaluation of the design of 177 water
tance. In Ghana, active reform efforts have  projects against the key principles of the Strat-
strong domestic ownership and multidonor in-  egy shows that they are increasingly responsive,
volvement. Tunisia is recognized as the most ad-  with the average trend upward since 1993 (fig-
vanced country in water management in MNA, ure 3.1).3 Each project was evaluated only against
while South Africa has an exemplary water law  relevant Strategy principles. For example, a rural
and process for implementing reform. But even  water supply project is not a relevant instrument
where water issues are important, there may be  for reforming regional or river basin water re-
no mention in the CAS because the Bank's coun-  sources management, just as a dam safety or flood
try macroeconomists have other perspectives  prevention project is not a relevant instrument
and concerns.                             for reform of water tariffs and subsidies. So it is
Improving Responsiveness to the
Figure 3.1 Water Strategy
Compliance with the water policy: 4=High, 3=Substantial, 2=Modest, 1=Negligible
4.5 -
4.0 -
3.5-
2.0 -                                                                         l
1.5 -
1.0 -                                                          -4--+ Mean
- Max
0.5-                                                             -   Min
- Min
0.0-III
1992              1994               1996              1998               2000
Year
16



The Water Strategy Has Been Only Partially Implemented
neither practical nor appropriate for any one  and a focus on the most needy-remain par-
project to fully respond to all the recommended  tially implemented (figure 3.2). The inadequate
components of the water Strategy. Indeed, OED's  attention to the legal and policy aspects of insti-
analysis found that highly rated projects were  tutional development is cause for concern. These
those that focused on four or fewer elements of  issues, critical to ensuring the sustainability of
the Strategy in project design.             water reform initiatives, embrace appropriate
Water projects fell into two classes-the mi-  mechanisms for cross-sectoral coordination, par-
nority (20 percent) considered comprehensive  ticipation of stakeholders in decisionmaking and
water resources management at the river basin and  decentralization, sufficient powers to enable pol-
national scales, and the majority (80 percent) fo-  icy institutions to operate effectively, and the
cused only on the project, with negligible larger-  quality of the regulatory environment.
scale linkages. Because very few projects took the
comprehensive view before 1993, this is a notable  Regions Have Pursued Different
achievement. Despite the lack of large-scale link-  Approaches to Comprehensive
ages, project-focused operations scored highly on  Water Management
the comprehensiveness rating if they included  There are substantial differences in the way re-
other Strategy elements in design. In many cases,  gional lending operations address comprehen-
while projects delivering water service infra-  sive water resources development.4 Adherence
structure were not appropriate vehicles for  by Region to the comprehensive principle is
reforming basin-wide or national water manage-  varied (figure 3.3). Some of this is due to dif-
ment, they did tackle systemic institutional reform  ferences in hydrologic endowment, level of eco-
issues. And many projects appeared to avoid is-  nomic development, willingness to reform, or
sues involving high transaction costs, long ges-  pre-Strategy starting point. MNA scored low on
tation periods, and high perceived risk.    its national and basin-level approach because
Other important elements of the Strategy-legal  many of its large countries do not have large
and policy aspects, institutional development,  perennial river basins. The exceptions are
F i g u r e  3 . 2   P o s t - S t r a t e g VO p e r a t i o n s  A r e  S t i l I
Fo c used      o n   Proj ects
Comprehensive at project level
Water service organizations
Management and regulatory
Finance and subsidies
Water service charges
Comprehensive at national level
Disadvantaged groups
Comprehensive at basin level
Legal, institutions, and policy
0            20           40           60            80
Percentage of all water operations
1 7



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Comprehensive Coverage of
Figure 3.3          National and River Basin Strategy
Elements        Varies       by   Region
EAP
ECA
r SAR
.2
c  LAC
* ~~~~~~~~~~~~~~~~~~Project
MNA                                                           River basin
AFR                                                          National
0%           20%           40%           60%           80%           100%
Coverage of Strategy principles
Morocco, where the Water Resources Manage-  larly in China, in augmenting measures to improve
ment project is piloting a River Basin Agency, financial and environmental sustainability.
and Jordan, where the Jordan River Valley Au-  The improvement in strategy responsiveness
thority is central to Bank assistance for reform.  of regional water portfolios since 1993 is a meas-
The real cause for concem is the scant progress  ure of the Regions' effectiveness in promoting
made at the national and basin level in South Asia the water Strategy (figure 3.4). While MNA and
and in Latin America and the Caribbean, al-  AFR started at the bottom, they show the most
though there are exceptions in Brazil, Nepal, improvement over the past six years. Starting
and Bangladesh. In Latin America, Bank water  higher, Latin America and the Caribbean shows
operations are most active in water supply and  the smallest improvement. In all cases, the level
sanitation and are not linked to river basin man-  of improvement is strongly related to the regional
agement. Three exceptions are flood protection  organization for water resources management,
assistance in Argentina, water quality manage-  as discussed in Chapter 5.
ment in Brazil's Guarapiranga project, and inte-
grated water resources management in the river  As Have Subsectors
basins of Brazil's Ceara state. Most of the Bank's  The various water subsectors also differ in the
water-related efforts in Latin America are strongly  extent to which they have followed the Strategy.
linked to commercialization or to ensure envi-  Subsectors vary substantially in integrating proj-
ronmental and social sustainability.       ects into policy, institutional, development, and
The Bank scores highly on its responsiveness  planning frameworks (figure 3.5). Except for
to the Strategy at the basin level in the ECA and  the water resource management and sector proj-
EAP regions, frequently because water projects  ects, all other subsectors give the greatest at-
dovetail neatly into existing regional sea or river  tention to project design issues that attempt to
basin management organizations. Even so, the  internalize local externalities. Irrigation-the tra-
Bank has been very effective in improving op-  ditional home of water resources planning and
eration and longer-term planning-and, particu-  management in most client countries-is below
1 8



The Water Strategy Has Been Only Partially Implemented
Level of Effort in 1993-99 Differs
Figure 3.4             by Region
1993                                     1999
_                                                                     I
2         2.2       2.4        2.6       2.8         3        3.2        3.4        3.6
Modest                                         , Substantial
Response to the comprehensive principle
the water supply and sanitation projects in in-  power base and influence, particularly in South
corporating Strategy issues.                   Asia and in East Asia and the Pacific, where most
One reason is that irrigation organizations  irrigation projects are located. In many irrigation
generally have substantial power and vested in-  projects, policies and investments to ensure
terests that resist reforms that would lessen their  service delivery take priority over more global
Comprehensive Water Management
Figure      3.5       of   Projects         by    Subsector
Subsector
Hydropower
Rural water supply
Environment
Urban water supply                                                       Project
Irrigation and drainage                                                    River basin
Water resources and                                                       National
sector projects
0%           20%          40%          60%           80%          100%
Coverage of Strategy principles
1 9



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
concerns. Hydropower projects meet the high-  omy. Emerging requirements for addressing the
est standards at the project level, but they score  broad environmental aspects of water resources
badly at the national level-that is surprising, be-  management and maintenance of the ecological
cause their relatively large scale should argue for  functions of freshwater systems present new
a more integrated approach.                challenges in water resources management.
Appropriately, environmental and water re-  Each subsector addresses the Strategy's rec-
source management projects are better at deal-  ommendations on water and pricing policy,
ing with the bigger picture of water resource  management, the regulatory environment, and
management than with the four subsectors   institutional reforms in different ways (figure
dealing with service delivery, which are only  3.6). Water resource management and water
modestly involved in comprehensive water man-  sector projects are superior on all criteria, fol-
agement at the river basin and national levels. lowed by water supply and sanitation projects
This is a problem for both the Bank and its  on six. Irrigation and drainage projects are the
clients. Water reform is inherently political, and  worst for five of the eight criteria. Attention to
the Bank can only facilitate change, not enforce  the needs of disadvantaged groups (poverty,
it. Profound organizational problems plague most  resettlement) and water policy is inadequate.
countries, where water jurisdiction and man-  Attention to water service management and
agement are fragmented across many agencies  regulation received the greatest attention, except
and split among states and provinces. Com-  in irrigation and drainage. Water service organ-
pounding this in some Regions is a dearth of tech-  izations considered decentralization of the or-
nical skills-and different foci. Water supply  ganization, its regulatory framework for pricing
utilities have to deal only with securing supplies  and service quality, operational and financial au-
and delivering them-effectively a closed system.  tonomy, and customer -participation in man-
Irrigation, by contrast, is only one input in a com-  agement decisions. Again, irrigation and drainage
plex agricultural crop production system that is  gave the least attention to finance and subsidies
vital to rural development and a national econ-  and to water service charges. Because irrigation
Subsectoral Compliance with the
Figure     3.6      Strategy        Elements         Is  Mixed
Subsector
Water services
management and regulation
Water service organizations                                     W
Finance and subsidies
Water service charges
Water resources
management and regulation
Water service policy 1                                         WR&SM
Disadvantaged groups _                                        * WSS
Water resources policy  _                                     *  I&D
0%           20%           40%           60%           80%
Percent of projects substantially responsive
20



The Water Strategy Has Been Only Partially Implemented
uses more than three-quarters of the develop-  neglected for so long, is beginning to receive the
ing world's water resources, this is a cause for attention it deserves.
concern. In most respects these findings show
that there are fundamental philosophical differ-  Groundwater Has Been Mismanaged
ences in the way the sectors are treated. Irriga-  Groundwater mismanagement has profound
tion and drainage are still very much in the  social and environmental impacts. Most of the
public goods domain, dominated by conserva-  world's poor rely on groundwater for drinking,
tive public sector agencies. Water supply and san-  and as much as half the irrigation that sustains
itation have moved toward commercialization  the green revolution has come from ground-
and, in some cases, privatization.       water. But the lack of regulation and effective
water pricing have led to the salinization of
Water Projects Tackle Environmental      aquifers on which people rely for water sup-
Issues from Different Fronts             plies and agricultural employment. Notable ex-
Water development has profound impacts on the  amples of such contamination include the
environment and its managemnent. The Bank  coastal aquifers of Gaza, Gujarat, westjava, and
has addressed these concerns directly through  Mexico.
environmentally focused water projects-and  The Bank, having nearly ceased to finance
indirectly with safeguard policies to evaluate  public sector groundwater development, is start-
alternatives and provide plans that minimize or  ing to focus on managerial and remedial meas-
mitigate harmful effects. AFR, ECA, and MNA  'ures, an effort it needs to expand rapidly. Mexico
have initiated a series of major initiatives with  has a new water management regime based on
GEF to support integrated management of the  transferable property rights, management by
basins of regional seas and major rivers. A new  users, and the elimination of distorting subsidies,
initiative for cooperative management of the  and results are encouraging. In India, rural
Mekong River basin has been undertaken by  power subsidies promote overpumping of
EAP. In LAC, a new GEF-supported regional groundwater. These distortions are at last being
groundwater management program has been  recognized and addressed through Bank-
initiated. Environmental projects in the water sec-  supported state fiscal reform programs.
tor represent a major growth area in the work
of the Bank and are a source of innovation in Investment Can Improve Drainage, but
approaches to their identification, preparation,  Sustainability Is Key
and implementation.                      Poor drainage spoils as much land as new irri-
Environmental projects are now the third  gation creates. Bank projects have been partic-
largest category of water-related institutional  ularly effective in addressing this issue through
support and investment in the Bank's portfolio. investment, as in Pakistan, but sustainability re-
This category increased from 11 projects pre-  mains a problem. In Egypt and Turkey, invest-
Strategy to 48 projects post-Strategy, and $3.3 bil- ment in drainage projects enabled irrigated crop
lion has been committed since 1993. Many  yields to double in many areas, but weak links
national programs deal with environmental man-  between irrigation and drainage agencies and the
agement through legislation and regulation that emerging water user associations threaten op-
includes water and institution-building. Under the  eration and maintenance. Community involve-
Baltic Sea, Danube Basin, and Black Sea envi-  ment underlies the success of soil reclamation
ronmental programs, the Bank is supporting  through better groundwater management and
new initiatives to address the impacts of non-  drainage in Uttar Pradesh.
point pollution from agriculture and rural set-
tlements on surface and ground water resources. Successful Watershed Management Requires
Specific projects are concerned with pollution  Participation and a Long-term Perspective
control, drainage, watershed management, and  Although almost $1 billion has been invested in
erosion prevention. Groundwater management,  watershed management, only a few projects are
21



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
free-standing, with three-quarters of the 42 water-  classified as environmentafly sensitive-a marked
shed operations embedded in more general de-  increase. Seven safeguard policies particularly
velopment projects cutting across 11 subsectors.5  apply to water operations (box 3.1). Those clas-
The primary focus of the majority of watershed  sified as likely to have potentially adverse en-
projects is on improving soil and water conser-  vironmental impacts that are sensitive, diverse,
vation, not on managing watersheds as a whole. or unprecedented (category A) have tripled in
A quarter of the projects deal with reducing sil-  number and doubled their share in the total
tation, fewer than 10 percent with pollution re-  portfolio. There is now greater willingness to ac-
duction, and less than 5 percent with integrated  knowledge site-specific impacts (category B)
water management. Projects in Europe and Cen-  that can be mitigated or reversed. Presumably
tral Asia and in East Asia and the Pacific are con-  a result of more careful project design and/or se-
cerned more with the effects of pollution and  lection, the proportion of water projects forcing
siltation, those in LAC with agricultural man-  involuntary resettlement has fallen by a tenth-
agement, and those in Africa with community re- to 37 percent of all Bank projects. Dam safety
source management.                       requirements are routinely applied to any proj-
The most successful projects have high gov-  ect involving the impoundment of water. The
ernment and community ownership, mainly be-  India and Indonesia dam safety projects have
cause they have sharply focused objectives. been the first Bank operations addressing dam
Poorly performing projects tended to focus on  safety per se.7 Based on the lessons from these
short-term goals supported by project subsidies  projects is a second generation of dam safety
that could not be sustained in the long term, were  projects and components under the Aral Sea
not supported by an enabling environment, and  Basin Program and in Albania, Armenia, the
depended too much on ineffective government  Kyrgyz Republic, Peru, and Sri Lanka.
agencies unable to coordinate effectively at the  The compliance at entry of water projects
local level or scale up the few successes.  with safeguards is higher than that of other Bank
Compare them with the successful Madagas-  projects. But this assessment comes largely from
car Second Environment Program prepared en-  a desk review that dealt with only two environ-
tirely by Malagasy agencies that took a long
view-15 years-with the strategy of main-
streaming environmental concems into macro-    B o x 3  I       W o r l d
economic management and sector programs.
Under the program, Malagasy agencies, assisted                    gI        -
by 10 donors and four international NGOs,                       P o l i c i e s
worked in teams to formulate the institutional and
investment program. With this broad consensus  s   nko
on strategy and coordination, implementation             l            iis
of water-related components is proceeding well.6  oOne li  o b
Another notable success, China's Loess Plateau  n
Watershed Rehabilitation Project, has substantially  * E
reduced local soil erosion by 20-30 million tons  Na
annually (and the total sediment load of the Yel-  Rural Developmi
low River by about 1 percent). It has also brought  * S
substantial socioeconomic benefits to marginal  S     m-
farmers on the plateau.                    *    u
Compliance with Safeguards Is
Demanding
Since the water Strategy was issued, almost  Pe        ter_nat
three-quarters of all water projects have been
22



The Water Strategy Has Been Only Partially Implemented
mental questions-Was the environmental analy-  needed to more effectively implement national en-
sis adequate? Did it cover analysis of alternatives  vironmental and social legislation, develop coun-
and economic evaluation?-and three stake-  try ownership of the safeguard concept, and
holder and social analysis questions. The qual- foster mainstreaming by borrowers. This reveals
ity of safeguards at supervision, however, was  the dilemma of the safeguard policies. Unless
worse.8 Recently QAG, with the support of the  mainstreamecd by borrowers, they primarily pro-
Bank's new Quality Assurance and Compliance  tect the Bank from risk and criticism. After intense
Unit, has expanded the review of projects for  opposition by environmentalists, Nepal's Arun III
quality at entry and quality of supervision to in-  project was dropped by the Bank-yet Nepal is
clude' review of all ten safeguard policies.  now embarking on a'dam twice the size on the
Of projects in the A environmental category,  same site, using private sector financing.
82 percent were satisfactorily supervised; for
category B, this dropped to 55 percent. Why the  Addressing Institutional Concerns by
discrepancy? Policy guidance of category A proj- Involving Stakeholders and the Private
ects is well defined; the projects are highly vis-  Sector
ible to Bank management and relatively well The water strategy insists that policies affecting
resourced. But policy guidance and compliance  water rights be carefully evaluated to ensure that
standards for category B projects are poorly de-  they do not harm the poor, who often need water
fined, allowing considerable discretion for task  rights to earn income. There are well-
managers. Much depends on the borrower, who  documented instances of such harm. Dams re-
frequently feels that safeguards are an expensive  duce the downstream flow of water. Irrigation
Bank imposition (as in the Nicaragua Social wells dry up traditional springs and shallow in-
Fund) and who does not have the institutional,  digenous wells. Agricultural drainage pollutes
technical, and organizational skills to meet Bank  downstream water sources. But this evaluation
requirements. Within the Bank, incentives to  was unable to find any Bank projects that sys-
implement safeguard policies are weak. Recent tematically reviewed pre-project water uses to
decentralization of responsibility and budgets to  determine the effects of the project on water ac-
the Regions and country units eroded the ca-  cess and use by different socioeconomic groups.
pacity of the Environment Department to mon-  The current emphasis on water rights comes
itor implementation of policies, and competition  from experience in Chile, which has been trad-
for resources reduced the environment to a low-  ing water rights and increasing economic effi-
priority sector. Task managers often viewed en-  ciency since 1981. While Chile's short rivers and
vironmental inputs as an added cost and chose  small drainage basins make it a special case,
to do without specialist help unless absolutely  water trading has been particularly effective in
necessary. These changes diminished the Bank's adjusting the allocation of water between urban
capacity to mainstream the environment into  and agriculture uses. Several preconditions-
country programs and to implement its safe-  including a strong link between water and land
guard policies effectively (Liebenthal 2002).  rights, a prior history of informal water trading,
Some countries have found the Bank's safe-  a sound legal system, a system for registering
guard policies too demanding and too costly, water rights, and good governance-make water
and have sought alternative funding with fewer  trading work. An independent regulatory system
conditions. In Morocco, a large dam component  to allocate water rights and safeguard essential
(a key element of its water resources management users is crucial, as are a good hydrological in-
project) was dropped after completion of essen-  formation base and titling system.
tial preparation work by the Bank. There are still  A major impediment to awarding water rights
echoes from the Narmarda controversy. While is the resistance of borrowers to relinquishing
safeguard policies have proven to be successful  control. Many borrowers fear that private rights
in integrating environmental and social issues  will lead to private monopolies. Many of these
into the design of projects, greater efforts are  fears are unfounded. Research shows that
23



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
informal water trading of de facto rights takes  notably, this has to be correctly sequenced with
place even when expressly forbidden by law, as  upstream reform of irrigation agencies. In Nepal's
in Fordwah-Sadiqia in Pakistan and Gujarat in  Sunsari Morang Irrigation project, the initial del-
India. The issue for the Bank is how to lever-  egation of operation and maintenance to water
age these examples into public policy discussions  users' groups took place before the reliability of
with borrowers. Major efforts are under way on  water supplies was assured and the groups lost
water rights and pricing in Brazil and Mexico, their raison d'etre. Investment in group forma-
but substantial resources and time are required  tion activities was premature and had to be re-
to identify users and register water rights.  peated. In the Philippines, several groups found
the operation and maintenance task too tech-
Decentralization and Participation Have Been  nical-or too onerous, given their limited access
Key to Success                            to heavy equipment-and reverted to state man-
Decentralization involves users in planning and  agement. Conversely, a Bank credit enabled
managing water projects, and encourages stake-  water user associations in Turkey to import their
holders to contribute to policy formulation. Tra-  own heavy maintenance equipment.
ditionally considered in a government context,
decentralization also applies to such large proj-  Community-driven Development Works-
ects as irrigation, with operation and management  But Is It Sustainable?
devolved to farmers. The Bank recognizes that a  Projects that focus on community-driven devel-
variety of organizations-private firms, financially  opment have much more social policy content
autonomous entities, and community organiza-  and poverty focus than other water projects.
tions-contribute to decentralizing water delivery. They use a bottom-up approach in which com-
That is why it supports projects that introduce dif-  munity organizations, as both stakeholders and
ferent forms of decentralized management and  beneficiaries, have authority over decisions, in-
that focus on division of responsibilities between  cluding direct responsibility to manage internal
public and private entities. About 70 percent of and external resources. These characteristics
the Bank's projects address decentralization of should mean more ownership and sustainabil-
water resource management.                ity, because they are sensitive to social devel-
Including beneficiaries has been central to bet-  opment concerns and include the poor.
ter management, and water projects, particularly  Community-driven development water proj-
irrigation and rural water supply, have done  ects are often funded through social funds. Most
much better than other Bank projects in this re-  of the water investment components under so-
gard. Beneficiary involvement has facilitated  cial funds-between 2 percent and 44 percent of
better system operation and management. De-  a fund-tend to be for water supply, drainage
spite this, women all too frequently are over-  works, and small irrigation schemes. In Laos,
looked as important stakeholders in land and  under the Luang Namtha Provincial Development
water management. Irrigation performance in Al-  project, social funds provide local water schemes
bania, India (Andra Pradesh), Mexico, Niger,  and enable technical assistance for training to de-
and Turkey improved when the Bank moved   velop, supervise, and operate water and sanita-
away from  mandating cost-recovery goals tion systems. In Angola the Social Action project
through covenants to persuading governments focuses on rehabilitation and expansion of water
that empowering stakeholders was more effec-  supply using appropriate and cost-effective tech-
tive. The lesson: operation and maintenance  nologies (hand-dug wells) and improves the ca-
improve when water user groups have financial  pacity of NGOs and communities to; plan,
autonomy and arrange operation and mainte-  manage, and maintain investment. This is oc-
nance themselves.                         curring even in more developed economies-in
Second-generation problems are now emerg-  the Russian Federation, the Community Social
ing from evaluation of participatory irrigation  Infrastructure project rehabilitates and upgrades
management (Svendsen and others 2000). Most existing water and wastewater infrastructure.
24



The Water Strategy Has Been Only Partially Implemented
Evidence shows that water projects managed  subject to bitter legal disputes, which the Bank
by social funds do not pay enough attention to  has tried to mediate, and the losses to the con-
developing organizations and institutions that en-  cessionaire may exceed $16 million.
sure long-term sustainability. The Honduras so-  There is concern among NGOs that the new
cial fund evaluation found that 83 percent of the  focus on private sector participation will have
systems assisted by the project had too little  adverse consequences for the water and sani-
revenue to cover operational costs, and half tation needs of the poor. Non-urban areas lack
had no technical assistance from either the gov-  the economies of scale so attractive to private
ernment or NGOs.                          investment. And peri-urban areas pose the
A concern that cuts across all social fund  biggest service challenge to public and private
lending is that while the investments are com-  sectors alike, particularly as they tend to house
munity- and demand-led, there are weak link-  migrants escaping from rural poverty. Where the
ages to the sectoral apex agencies and almost  private sector cannot deliver or sees the risks as
no linkage with national or Bank sectoral strat- too high, there may be a case for the Bank to
egy. While responsive to the Bank's water  intervene to improve capacity and policy to up-
Strategy, which encourages subsidiarity and  grade public sector utilities.
demand-led approaches, the laissez-faire ap-
proach may not necessarily focus on the areas  Pricing Promotes Efficiency and
of greatest need. It is difficult to judge whether  Conservation, but There Are Few
the poor are given priority in these projects be-  Successful Examples
cause the funds are dispersed on a first-come,  Water pricing is key to the Bank's water strat-
first-served basis, and the poor are not normally  egy and water allocation (Rogers 1992). In the-
in a position to take advantage of such oppor-  ory, underpriced resources are frequently
tunities unless special efforts are made.  misallocated, mismanaged, and wasted. In prac-
tice, however, water resources have only a nom-
Private Provision Is Cost-Effective-But Has It  inal price set by a small license fee because of
Helped the Poor?                           the economic and cultural difficulties of putting
The Bank facilitated the commercialization of  a value on a natural resource. Consequently, al-
public water utilities and regulatory frameworks  location is almost always made by prior appro-
to leverage substantial private investment. Pri-  priation or administrative fiat.
vatization of municipal water supplies in Africa  Within the water services sectors, efficient
and in Latin America and the Caribbean has  water pricing combined with appropriate fee col-
achieved greater area coverage at no public  lection and good management ensures water
cost. But getting the private sector to focus on  service delivery by enabling system operation
the alleviation of poverty and to design tariffs  and maintenance-and thus meets the Bank's
in a way that does not discriminate against the  poverty alleviation objectives. The corollary of
poor has proved hard to achieve in practice.  pricing-attention to cost minimization-focuses
Even so, typical full-cost tariffs charged by pri-  managerial attention on staffing overheads, sys-
vate sector utilities range from $0.20 to $0.90 per  tem efficiency, water loss reduction, ancl efficient
cubic meter, much cheaper than water vendor  billing systems. This has positive environmen-
or trucked supplies, which can be more than 10  tal impacts, since more efficient water use and
times more expensive.9                     attention to production costs (particularly for agri-
To date, only a few private sector participa-  cultLre) generally reduce water pollution and in-
tion management ventures have failed, and these  crease conservation. And when water is seen as
mainly because of poor governance. In The  a commodity, more attention is paid to its allo-
Gambia, instability following a 1995 military  cation in the market environment.
coup undermined lease and management con-    The Middle East and North Africa was the best-
tracts for operation and maintenance. The 1995  performing Region, thoroughly covering pric-
Aguas del Aconquija concession in Argentina is ing and financial issues in the design of projects.
25



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
East Asia and the Pacific, boosted by China's ex-  A large external constituency of stakeholders still
tremely well-developed financing regulations,  wants to maintain social water pricing, which is
performed almost as well. The best-performing  difficult to manage with formulaic guidelines. For
sector was water supply and sanitation, in which  policies to be effective, countries need an ap-
two-thirds of all projects covered these issues sub-  paratus for setting prices and the capacity to ad-
stantially. Irrigation, heavily influenced by India's  minister them. Most client countries have neither
low ratings, was the poorest-performing sector.  and are hindered by loading the pricing mech-
Were there specific cost-recovery targets?  anism with multiple objectives.
How did these relate to the financial health of  The Bank's ability to give practical advice on
the agency? Were efficiency and equity taken into  pricing is diminished because few staff or con-
account? And did the revenues collected go  sultants have experience in setting tariffs or
back into service provision? Globally, most Bank  managing the finances of utilities and irrigation
projects pay lip-service to cost recovery, but  authorities. This shortcoming is being addressed
only two-thirds of Bank projects have addressed  by the Bank's Water and Sanitation Sector Board.
it substantially. Of the sector loans, those for  Only a few Bank operations contain irrigation
water supply sector adjustment were the best-  service-fee components within a work program
performing. Conversely, those for the environ-  for a functioning and financially autonomous ir-
ment seldom addressed cost-recovery issues.  rigation service provider. Given the political
The Bank has been trying to widen the knowl-  sensitivity of pricing, it is essential to be realis-
edge base for water supply benchmarks through  tic in setting performance targets and linking
a Web site for participating utilities. The inter-  them with institutional reform.
national benchmarks, such as those dissemi-
nated by the Asian Development Bank, provide  The Bank's Effectiveness on Key Strategy
only "order of magnitude" comparisons of effi-  Elements Varies Widely
ciency. For the irrigation sector there are virtu-  The results of the qualitative and quantitative
ally no benchmarks because the technical, social,  evaluation described above were classified in
and institutional features of irrigation service  terms of how effectively the Bank has imple-
arrangements are complex and geographically  mented the Strategy and are summarized for
diverse. Many Bank capacity-building efforts in  cross-sectoral comparison in figure 3.7. Clearly,
water supply and sanitation utilities are directed  much remains to be done, particularly on bet-
at developing cost accounting and financial  ter alignment with the Bank's overarching goal
management frameworks as the basis for a pric-  to alleviate poverty, on ensuring that a com-
ing policy. This is lacking for irrigation, which  prehensive planning framework is adopted, and
relies mainly on financing from budget transfers.  that more attention is given to allocation and pric-
The battle to mainstream the economic and  ing, water rights, gender, and addressing systemnic
financial aspects of pricing policy in both sec-  institutional problems that have slowed the path
tors has largely been won inside the Bank but  to reform. But, as the next chapter shows, get-
not in client countries or the international arena.  ting results will remain a major challenge.
26



Th.e Water Strategy Has Been Only Partially Implemented
F i g u r e   3   7       The       Ba n It's       Ef f ective ness               i n   Im    p lementi ng
the      Strategy            Varies Considerably                           by    Sector
Very effective                         Moderately effective                           Ineffective
Comprehensive water resources management                                                    O    Alignment with the Bank's
poverty strategy
0   Working in partnership with other  0   Raising awareness      0    Getting borrowers to adopt
international development              of comprehensive       ,   comprehensive water
agencies to build consensus on         water resources            resources management
management of international            management at
waters                                 country level         0    Introducing the river basin
as a unit of account
0    Environmental          0    Improving the management and
management and              conservation of groundwater
pollution control               0    Improving coordination among
all water users
0    Allocation issues and
opportunity cost of water
Water supply & sanitation
O    Setting standards and regulatory environment for utilities    0   Expanding access and      O   Increasing access to
O    Enabling commercialization and/or privatization of urban          participation in rural        sanitation
water supplies                                                     and deprived areas
0 Gender concerns
0    Cost-recovery       0    Decentralization              O   .Ensuring institutional and organizational
and tariffs                                                 standards for other sector WSS
O    Cross-subsidies    O    Sector poverty strategy
O Addressing concerns about
affordability
Irrigation & drainage
O    Participatory management          0    Improving system operation and    O    Water rights
and water user associations            maintenance
0    Poverty impact      0    System redesign for more    0    Decentralization
efficient operation
0   Water quality and drainage        0    Gender issues
0    Increasing user    0    Transparency and full cost
charges                 accounting of water delivery
service
0    Organizational reform and unbundling
activities
0   Reforming the legal and
regulatory framework
0   Conjunctive use of surface and
groundwater
O Addressing subsidies
that discourage water
conservation-e.g. rural
electricity tariffs
Hydropower
O    Regulatory environment and dam safety            O   Environmental concerns and
safety                                               involuntary resettlement
O    Integrated water sector strategy
O Multipurpose development
Environmental management
0   Watershed management and            0    Decentralized management
conservation
0    Institutional and regulatory environment   0   Strategies to address underlying
institutional constraints
0    Participation and Social Concerns      0   Gender issues
27






R  :t      ~~~~4
Why It's Difficult to
Get Good Results
T         he core business of water resources management is to establish in-
centives for water users to protect and conserve the resource, allo-
cate it to higher-value uses, and reallocate as demand changes. This
needs to be done in a holistic way at the river basin level because exter-
nalities and opportunities for reallocation do not occur just within sectors.
Each use has an impact on the resource that affects its value and the per-
ceived risks to other users.' In the Philippines, for example, private sector
investors ranked the lack of watershed protection against polluters as the sec-
ond most critical risk for urban water supply investment, the first being the
risk of nonpayment for bulk water supplied to public sector distributors.
Comprehensive Water Management            defining and enforcing water rights through ad-
Is Inherently Difficult                   ministrative and economic instruments,3 this is
Integrated water resource management by river viable only when it is supported by specialist
basin organizations is difficult to set ulp. To be  knowledge that varies by subsector. More im-
effective, it requires sophisticated institutions  portant, these subsectors perform better when
and good governance-things lacking among  they have autonomy and clearly defined gov-
most of the Bank's borrowers. A review of global  ernance and accountability. Each subsector's
experience suggests that a more hybrid ap-  specific policy and financing challenges differ
proach to integrated water resource management from those of the other subsectors and from
(the Strategy aims to create a perfect super- those of overall water resource management.
institution) would focus on enhanced coopera-  A recent global review of holistic approaches
tion among existing institutions (table 4.1)  to planning (OED 2000b) found that it is best to
(Millington 2000).2 The Bank's approach to Strat-  avoid delegating responsibility for integrated
egy implementation has matured along this path  planning to separate "super-institutions" created
since 1993.                               specifically for the task. Experience suggests that
The hybrid approach recognizes that while  these are either ineffectual in the short term or
water resources management needs to focus on  unproductive or unsustainable in the long term.
29



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Ta b I e  4 . 1       Mature        Water       Resource         Management
Organizations Do Not Run Water Businesses
River basin organization function                          New     t                          Mature
Planning. Water and natural resource data collection and processing,
systems modeling, water and natural resource planning                       o
Projectmanagement Feasibility, design, implementation, operation
and management, raising financing                         .
Allocation. Allocating water shares (quality and quantity), cost
sharing principles, and user/license to support RBO activities              0
Policy andstrategy developmnent. For economic, financing, and
environmental issues, community awareness and participation
Monitoring and evaluation. Water use and shares, pollution and
environmental conditions, oversight and review of projects
promoted by subsector partners                                                    .
Source Modified after Millington (20001.
The biggest problem for river basin organizations  operation for natural resource management. But
is that they tend to take the form of regional struc-  it also has a strong interest in reducing the eco-
tures that attempt to claim (but often merely du-  nomic and human costs of water conflicts that
plicate) the responsibilities of existing regional  lead to suboptimal development and sometimes
departments of national ministries.             wasteful investment.
A pervasive problem facing these new or-        The Bank, with its ability to mobilize funding,
ganizations is securing adequate funds for water  its knowledge, and its convening power, has
resources management activities. To mitigate   the capacity to lead on the issues associated
this problem, new bodies should be given re-    with international waters. The Bank's first foray
sponsibiity for coordinating the relevant ele-  into this area, the Indus Water Treaty in the
ments of existing organizations and ensuring    1960s, clearly demonstrated this. It also showed
the participation of stakeholders, including    that solutions take a long time and require a high
NGOs, civil society, and the private sector: the  level of commitment. The Indus problem was
goal should be integrated planning, but not     solved only because the Bank worked at it for
integrated implementation. Decentralized gov-   10 years and had the personal commitment of
ernance-subsidiarity-is a key component of      Bank President Eugene Black. It is notable as
this approach. In practice, however, lack of    being the only case where the Bank helped es-
local capacity and basic data are frequently crit-  tablish formal procedures for allocating water be-
ical constraints in Bank client countries. An-  tween countries. Over the last decade a series of
other difficulty is that river basins frequently  regional programs focused on basin-level envi-
transcend national borders, and this adds another  ronmental management of freshwater, coastal,
dimension.                                      and marine resources have been undertaken in
ECA, MNA, and AFR. The key lessons leamed are
International Water Cooperation Is             that success is based on a shared vision, sustained
Essential but Controversial                     commitment, and broad-based partnerships.
Intemational waters are always a potential source  The lesson from the Bank's current portfolio
of conflict, even more so when they are shared  is that each international and intrastate water
by water-short countries. The Bank's primary in-  problem has a unique blend of political, envi-
terest in these situations is to foster economic co-  ronmental, and socioeconomic factors. As the
30



Why It's Difficult to Get Good Results
Aral Sea program illustrates, there are no easy  Transforming Strategy into Action
solutions. Before significant funds can be com-  Is Difficult
mitted, much needs to be done to facilitate part-  The Bank's water reform agenda has been unclear
nerships, agree on approaches, and formulate to most stakeholders and insufficiently linked to
policies for each situation. For Bank staff and  national economic issues.4 This shows the value
managers there are few institutional incentives  of developing and disseminating short country
for undertaking such risky cross-regional en-  water strategies closely linked to CASs. All stake-
deavors in times of declining budgets, despite  holders complained about lack of knowledge
the requirements of the Bank's water Strategy.  and the asymmetry of available knowledge, which
Consequently, corporate culture will need to  skewed decisionmaking. They argued that the
change significantly before the Bank can as-  Bank needs to be more inclusive, moving beyond
sume its appropriate leadership role in interna-  the usual government department clients to in-
tional waters. And because these usually are  volve politicians and the public in discussing
high-risk situations, often taking years to estab-  water strategy and development priorities.
lish and ensure stakeholder ownership, the Bank  OED's Rural Vision to Action study of five
should have a clear exit strategy.        countries found significant differences between
Bank staff and local stakeholders on what was
Water Is Not Seen as an Important         important.5 Almost two-thirds of country stake-
Economic Resource                         holders believed that the central government
Reforming water management requires concerted  should directly allocate their country's water re-
action to elevate social and environmental con-  sources among competing users; only a quarter
cerns, set development priorities, correct poor  of Bank staff did. Similarly, Bank staff were
governance and ineffective public-sector insti- three times more likely than country stake-
tutions, and redress large knowledge and skill  holders to believe that small rural communities
gaps. Most important, unless the enabling con-  could plan and manage water supply systems.
ditions are in place-a conducive political econ-  A recent review by the Bank's Quality Assur-
omy and strong local leadership-a water reform  ance Group (QAG) of five water-related pieces
agenda is unlikely to be viable. The agenda is  of ESW concludes that the relevance of water pol-
extremely ambitious, and agreeing on the se-  icy reform needs to be improved, primarily
quence and scope of activities in a country set- through greater management of and attention to
ting is difficult, time-consuming, and risky.  major pieces of ESW.6 Management is criticized
One major difficulty is in linking water devel- for providing support systems for ESW that are
opment to the CAS agenda. Water sector inter-  "largely unclear and inadequate." This lack of
ventions in CASs are generally subsumed under  clear priorities is especially true of ESW to sup-
broader development goals, such as securing  port water reform. QAG noted that with staff typ-
macroeconomic stability, alleviating poverty, im-  ically over-programmed, ESW tends to get lower
proving natural resource use and the environment,  priority, and quality can suffer because of this.
or removing infrastructure bottlenecks.     QAG criticizes traditional ESW for failing to
The explicit valuation of water as an input to  strike a balance between short, quick-response,
public health, food production, and environ-  informal tasks and longer gestation, more costly
mental maintenance is fraught with difficulty,  formal tasks.7 In commenting on the India water
leaving it undervalued until there are problems.  management review, QAG suggests that these
Indeed, water issues tend to attract political at-  old-style ESW products "may not be the appro-
tention mainly for extreme events-Bangladesh's  priate vehicle for effecting policy change. Crisp,
Flood Action Plan, El Nino Emergency Loans for  timely, analytical pieces, based on well-
Peru and Bolivia, or the Sudan and Zimbabwe  conceived and broadly representative work-
Drought Recovery Credits-or when things go  shops in the country, can much better serve as
wrong-arsenic in Bangladesh's groundwater  instruments for Bank dialogue and engagement
and India's Narmarda controversy.         in the sector."
31



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Major recommendations are that stakeholders  Selectivity and Good Management
should be more closely involved in preparing  Are Important
and reviewing ESW task teams for major sector re- The theoretical underpinnings of comprehensive
ports and should include adequate representation  water management are sound, but such a large
of macro and sector economists to avoid the di- task cannot be accomplished everywhere at
alogue being restricted to technicians of the Bank  once-or quickly. Selectivity is therefore im-
and client. In reviewing a sewerage project in In-  portant, as is recognition that the Bank's proj-
donesia, for example, QAG commented that the  ect horizon of five to seven years is simply too
limited results and impact of the study could have  short to carry out the reforms needed to estab-
probably been achieved quicker, and at a much  lish comprehensive management. The usual so-
lower cost, by organizing a workshop in Indonesia  lution-a series of projects-can work, but only
at which each of the seven cities surveyed by the  if properly sequenced within the comprehensive
study could have provided a description of issues  framework. China's Tarim Basin II, the Brazil Sec-
they face as they try to expand service. In con-  ond Water Modernization, and the Morocco
trast, the review of the Water Sector Adjustmnent Water Resource Management projects demon-
Loan environmental assessment is given high  strate good practices in this area. They need to
marks for an outstanding effort to address this issue  be adapted and adopted in other water-related
in a participatory fashion, while raising doubts as  sectors. It is also important to focus on doing a
to whether this kind of approach was either replic-  few things right to demonstrate new approaches
able or affordable for the Bank.         that work. While it is necessary to be compre-
Country stakeholders (in Brazil and'India) ob-  hensive, it is not necessary to be complex.
served that there seems to be an unwillingness
by the Bank to continually learn from evolving  Seven Ways to Improve Results
implementation lessons-process seemed more  The Bank has many options for improving per-
important than substance once a project was ap-  formance in the water sector:
proved. The staff focus was on meeting dis-  * Establish ownership and leadership.
bursement targets and responding to directives  * Find win-win solutions and opportunities.
and mandates from headquarters that the stake-  * Judge results, not plans.
holders saw as having little relevance to local is-  * Step up the country and sector dialogue.
sues or concerns. Lack of continuity of Bank staff  * Manage complexity and accept tradeoffs.
was also seen as a problem (Chapter 5). There  * Use partnerships to build capacity.
was frustration that Bank staff, because of these  - Be patient-reform takes time.
pressures, could not take more time for non-
lending work and for facilitating public policy  Establish Ownership and Leadership
debate on water issues.                   Much of the success of institutional reform is
owed to an independent agency outside the
Detailed Guidelines Have Been Lacking     concerned ministries and agencies. In Mali and
Even though Water Resources Policy Review and  Albania, the government ensured the agency's
Strategy Formulation (FAO 1995) guidelines  independence and freedom to reform. In Brazil,
were jointly prepared by the UNDP, FAO, and  the Bank's water programs are highly success-
the World Bank at the request of the Subcom-  ful in the state of Ceara because of the personal
mittee on Water Resources of the UN Adminis- interest of the governor and grassroots opera-
trative Committee for Coordination, these were  tions and management. In India, the chief min-
only modestly effective. There was no follow-  ister of Andhra Pradesh pushed through an
through in the Bank (or elsewhere) to make the  extensive reform program of the irrigation sec-
guidelines fully operational, based on the lessons. tor. But in other states and countries there are
Nor was there a realistic assessment of the re-  few champions, and water sector reform is
sources required to implement them through  mired in political indifference and bureaucratic
lending and nonlending operations.        malaise.
32



Why It's Difficult to Get Good Results
Find Win-Win Opportunities and Solutions  subsectors worked independently with limited
The Bank is in a unique position of being able  interaction, sending mixed signals to the client.
to see the macroeconomic and political condi-  Frequent changes of task manager due to Bank
tions that provide opportunities for compre-  reorganization caused significant problems for
hensive reform. In all cases, the precursors to  the government after Bank delays led to the
water reform were outside the water sector-and  eventual cancellation of a $100 million com-
reform of water is typically second or third gen-  plementary investment.
eration, following in many cases reform of the  While the water strategy stresses the impor-
power sector. Macroeconomic crises of the late  tance of sound environmental and social as-
1980s were the motivating force for irrigation re-  sessment and compliance with the Bank's
form in Mexico and for debates on water sec-  safeguard policies (box 3.1), the borrower's
tor reform in Australia, Chile, and India. In South  costs of compliance may be significant. Invol-
Africa, water sector reform has been part of re-  untary resettlement is generally among the im-
construction of the economy in the post-  portant social safeguard issues in water projects.
apartheid era. A major change in Poland's In a Bankwide review of projects that involved
environmental and water management, sup-  resettlement, the average number of affected
ported by the Bank and other donors, was ac-  people per project had declined from 30,500 to
celerated by the ongoing EU accession process.  11,600 post-Strategy (Annex F). While a vast
Financial crisis drove water sector reform in  majority of these are only affected by acquisi-
Brazil, France, Mali, Niger, Senegal, Turkey, and  tion of land, a much smaller number need to be
the United Kingdom, and more recently in the  physically relocated. Resettlement action plans
Philippines Metro-Manila water concession. In  are agreed with the borrower prior to project ap-
many of these cases, water reform also benefited  proval for regular investment projects, though 16
from the synergy of political and economic lib-  percent are finalized during implementation,
eralization. All too frequently, however, Bank  due to the programmatic nature of projects.8
water staff promote reform when the enabling  Given the need to construct dams to conserve
conditions are absent.                    as much water as possible for future demand and
the current lack of capacity to implement safe-
Judge by Results, Not Plans               guard policies in some borrower countries, the
Water development requires multisectoral co-  Bank faces significant technical and public re-
operation and safeguards that can be costly to  lations challenges in water sector development.
clients. In the Yemen Taiz Water Supply project,  The main lesson OED drew frorm its 1998 re-
water supply staff pursued their quest for water  settlement review was that results rather than
by administrative reallocation from rural to urban  plans should be the touchstone of quality man-
use-neglectful of insufficient groundwater-  agement.9 The main lesson for water operations
while agriculture and social sector staff, cognizant is that there needs to be a clear shift from re-
of the importance of water in the rural economy  settlement policy and planning to procedures and
and local needs and customs, argued that a  practice. There is an urgent need for the Bank
more socially inclusive approach was required.  to review quality control procedures, including
The compromise, a project with many social safe-  the adverse effects of water management, to
guard components, is proving too complex to  ensure that reviews are transparent and inde-
implement effectively. Consequently, there is a  pendent. More emphasis needs to be given to
standoff between the local landowner and the  sectoral environmental assessment and moving
Taiz water supply agency. The key resource  upstream to help borrowers solve root safe-
issue of how to address the groundwater min-  guard problems-institutions, governance, and
ing on which all livelihoods depend is still un-  knowledge gaps-before they get in the way of
resolved. Similar problems occurred in the  development. There also is rising demand for tak-
Trinidad and Tobago Water Sector Institutional ing more explicit account of borrowing countries'
Strengthening project. Bank staff in different  policy and regulatory regimes and for making
33



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
determined efforts to seek harmonization be-  the scale of farmers' private sector initiatives,
tween domestic legislation and Bank policies  making the projects irrelevant because of in-
prior to project processing.              sufficient beneficiary involvement in project de-
sign and unreliable power supplies.10
Step Up the Country and Sector Dialogue     Failure to heed the findings of the Argentine
Understanding the country and sector context is  public sector investment review led to pro-
vital for developing a comprehensive develop-  longed and expensive involvement in the
ment strategy. Morocco's strong government Yacryreta Dam project long after it was shown
ownership, sound sector administrative capacity,  to be subeconomic. Changed project manage-
and an organization allied with -decentralized  ment compounded the Bank's failure to appre-
water distribution utilities (R6gies) enabled a  ciate government sovereigntv over procurement
successful outcome. In Metro-NManila, knowl- regulations annd led to withdrawal from Turkey's
edge transfer and dedication over a number of Berke Hydroelectric project in 1995, two years
years translated into success. The various. water  after approval of the loan. Similar problems had
sectors naturally differ in their readiness for re-  also affected the national drainage project, but
form. In Chile the successfiul Environmental In-  were resolved. A major difficulty is the Bank's
stitutions Development project established an  continued optimism about the public sector's in-
effective national environmental management tent to reform, in spite of substantial evidence
agency, yet regulation of water pollution by min-  to the contrary.
ing failed because of vested interests. Where  When there is deep country dialogue the re-
political and administrative zransaztion costs are  sults can be ouistancling, as Mai's Office du
high, reform may be cosmetic-passing a water  Niger Consolidation Irrigation project demon-
law, for example-with no attempt to enforce it. strates, The Office was restructured, its financial
Low client commitrnent and institutional ca-  health restored, government monopolies were
pability allied with ambitious project objectives  unbundled, and agricultural production bur-
account for much of the poor performance of four geoned-helped by improved land tenure and
of the six water supply and sanitation adjustment  market liberalization. This success led other
loans. In Colombia and Honduras, the loans  donors to invest more, leveraging the Bank's in-
achieved their objective of providing increased  vestment by 250 percent. In the Baltic Sea En-
access to water by the poor. But they failed in  vironrment Prograrn and the Nile Basin Initiative,
their institutional objectives, mainly because the  the strong and sustained commitment of the
project scope exceeded the capacity of sector in-  cooperating governments has been critical for
stitutions that suffered from frequent managerial  their success to date.
changes and political interference. In Algeria
and Ghana, similar problems and ill-defined per-  Manage Complexity and Accept Tradeoffs
formance objectives, poor governance, and cor-  Determining the appropriate level of complex-
ruption prohibited financial sustainability.  ity and phasing is one of the unresolved dilem-
Insufficient country and sector dialogue  mas of a more comprehensive and integrated
dooms projects to failure, sometines blinding the  approach. Not everything can be done at once.
Bank to changed circumstances. The ambitious  Turkey's Izmir Water Supply and Sewerage proj-
Brazil NE Irrigation Engineering project ignored  ect, completed in 1996, demonstrates the inad-
the macroeconomic situation and wavering po-  visability of committing funds for large-scale
litical commitment to continued investment in  expansion of facilities before addressing critical
public sector irrigation. The result? The project institutional issues. A gradual program aimed first
delivered products no one wanted. Subsectoral  at building management capacity and encour-
reviews can ensure that investment priorities  aging efficient use of existing facilities would
are clearly linked to a development strategy led  have been a better approach.
by borrowers. In India and Pakistan, public  At the other end of the scale, the Lesotho
tubewell development projects underestimated  Highland Water Project is one of the few that
34



Why It's Difficult to Get Good Results
largely complied with the Bank's water Strategy.  reveals both administrative and technical inef-
A complex project facilitating interregional and  ficiencies-not least, volumetric measurement of
interbasin water transfer, its ambitious engi-  water supply and consumption.
neering objectives are nearing full achievement.
Its sheer size has created an influential national  Use Partnerships to Build Capacity
implementation agency that government will Creating a shared vision among the Bank, bor-
have difficulty in controlling. The environmen-  rowers, and other development partners is the
tal and social aspects remain only partially im-  key to successful implementation of the Bank's
plemented, and are now being given increased  water Strategy, and the Bank has made some
attention-as is Lesotho's water supply and san-  major accomplishments on the international
itation subsector after a decade of benign neg-  stage (Chapter 2). The biggest challenge is con-
lect.' All these examples indicate that while it verting donor-led partnerships into country-led
is essential to plan comprehensively, greater  partnerships. In most countries, the finance min-
success can be achieved through discrete, man-  istry does not share the Bank's vision about the
ageable, and sequenced development.      importance of water in their economies. The
Indeed, unbalanced growth approaches to in-  Bank needs to ensure that the highest levels of
stitutional development are seen as superior to  the government and the Bank understand how
centralized planning approaches (Ellerman 2000;  critical water development and management
Hirschman 1994). Successful "unbalanced" in-  are to the future of the countries. But one can
terventions set up tensions and highlight un-  hardly fault ministers of finance when the bulk
foreseen problems that catalyze additional and  of the Bank's country assistance strategy ignores
sequential reform efforts. Thus the Bank's ex-  the importance of water.
perience suggests developing country water  A major concern, however, is that inability to
strategies as a means to highlight where and  meet the costs of proliferating partnerships may
when to selectively intervene-and then ensure  have reputational risks when the Bank fails to
that the targeted interventions are realistically  deliver. For example, the Bank allocated far less
scheduled and funded.                     than anticipated for the WBI water program, leav-
A comprehensive attack on all the problems  ing a greater burden for its partners. Indeed,
faced by an institution cannot hope to achieve  budget cuts have recently skewed the WBI water
final results in a specified time.12 Instead, a few  program toward the area of strongest'demand-
aspects can be identified on which progress is  water and sanitation reform. That deemphasizes
feasible given the general operational level of the  sectors that need reform the most-national
institution, and the program can concentrate on  water management, and irrigation and drainage.
those aspects for a reasonable period-say,  Such induced selectivity may prove short-sighted.
three years. After that, the progress made will Another area of risk is that performance stan-
have ripple effects on other parts of the institu-  dards to judge the efficacy and relevance of
tion. At that point, a new program can be de-  partnerships and arrangements for monitoring
signed  that takes account of the new     and evaluation are still nascent.
situation-including changes in personnel-but
that focuses on another limited number of ob-  Be Patient-Reform Takes Time
jectives. In sum, institutional development efforts  All too often, the Bank has expected reform to
should abandon comprehensiveness of scope  quickly follow investment. But in water supply
and schedule, pursuing instead a partial, cu-  and sanitation, making investment conditional on
mulative, and highly focused approach (Israel  reform frequently leads to more successful out-
1987). Good examples of interventions that cre-  comes. The Indonesia and Jordan water SALs are
ate ripple effects are governance and institution  good examples of the challenges and achieve-
building efforts that make service providers ac-  ments, while Mexico's Second Water Modern-
countable to customers (water user associa-  ization shows the advantage of the long-term
tions), and full cost accounting that frequently  programmatic approach. The success of a
35



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
sequenced and incremental approach that bal- and had a marked impact on poverty. OED's re-
ances learning with doing and building stake-  cent evaluation of the rural water supply sector
holder ownership is illustrated by the first phase emphasized that building stakeholder ownership
of the Uttar Pradesh Sodic Soils Reclamation  takes time (OED 2000c).
project. It increased agricultural productivity
36



VA~~~
WAL1
7~~~~
Improving Bank
Management and
Internal Incentives
L       ong before the Bank's 1993 water Strategy and policy were pub-
lished, many staff believed that the lending and nonlending initiatives
of the water sector should focus primarily on policies to improve water
service delivery operations.1 Task managers knew that adding a multisec-
toral water resources management dimension to a lending operation would
greatly complicate it, especially when resources allocated to delivery
operations were already too low and decreasing. The consensus of staff was
that water-scarce countries needed special attention-otherwise, resource
management should be evaluated (perhaps through a nonlending program)
when the viability of water investment was at risk.
The challenge was to design a Bank imple-  lem. First, the demand-led approach made it dif-
mentation strategy based on processes and pro-  ficult to clefine resource requirements. Second,
cedures that were cost- and resource-effective. the Bank was then expanding its environment
Resolving this challenge became important be-  and social sector staff. And third, the Bank was
cause policy and strategy formulation had in-  aggressively trying to cut overhead costs.
cluded widespread participation, coordination,  While some uncoordinated action was taken
and dialogue with other donors and NGOs. One  to assess the resources required, the imple-
group of leading NGOs, supportive of the Bank's  mentation plan agreed to when the Strategy
water Strategy, was 'concerned that the Bank  was presented to the Board was never prepared
would not be able to deliver on its promises of in detail, and thus never institutionalized. So,
action.2                                  adoption has been voluntary, depending on
Thus alerted, management agreed that the  whether operational units have the interest-or
Bank's capacities and abilities to implement the  more important, the resources-to give attention
Strategy would have to be reviewed and sub-  to water resource management.
stantially increased if the policy objectives were  Advisory staff in the Bank did translate the con-
to be effectively addressed. But three issues  ceptual framework into practical implementa-
clouded management's perception of the prob-  tion guidelines for client countries. But the joint
37



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
UNDP-World Bank technical paper-A Guide to icy objectives that require a holistic approach-
theFormulation of Water Resources Strategy (FAO  such as implementation of its water Strategy-
1995)-was seen as an end in itself. As with the  get lost by subdivision.
Strategy's implementation plan, there was no  Councils and Sector Boards within ESSD and
follow-through in the Bank to make the guide-  PSI differ in their effectiveness on water issues.
lines fully operational or to assess the internal re-  Both sector boards have produced a series of per-
sources required to implement the guidelines  formance improvement plans focused on the ef-
through lending or nonlending interventions.  ficiency of their operations. The Urban Water
Supply and Sanitation Board has been develop-
The Bank Is Poorly Organized to          ing a coherent plan to improve the efficiency of
Implement the Water Strategy             its operations and water service delivery function.
In 1995 the operational Regions reverted to a  But the same is not true of the Rural Sector
two-tier system with country management units  Board. Under this board, water-related opera-
directly supported by sector management units. tions-even though they account for half its
The sector units functioned like the old techni- lending-are only part of a mandate that spans
cal departments, providing specialist staff to re-  a complex of 16 rural development activities. As
spond to a country director's needs-despite the  a result, managerial guidance and oversight on
fact that water knows no borders. Most sector  water development get lost in bigger rural de-
units are large (70 to 120 staff) and structured  velopment issues. It was only in the spring of
such that water resources management cannot  2000 that a new Water Resources Management
be treated in a holistic manner. Urban water sup-  Group was formed under ESSD to address this.
ply is separated from rural development (and  It is too early, however, to judge the effective-
thus irrigation and drainage), and in some Re-  ness of this new set-up and the way that energy,
gions from environment and social develop-  environment, infrastructure, rural development,
ment. In addition, demand for sector support is  and WBI training will be coordinated.
unpredictable because it is controlled by bud-  One possible solution for better water serv-
getary provisions from the country units, and the  ice delivery in the rural sector is to focus ex-
continuity of staff involvement cannot be guar-  clusively on the efficiency and sustainability of
anteed. Until 1999 the Africa and MNA Regions  water delivery in the same way that urban water
were the only ones with a functioning water re-  supply concerns itself only up to the household
sources management unit capable of delivering  tap. The delivery systems for urban water and
a regional approach. Since then, all Regions  for irrigation and drainage are both capital-
have begun to set up regional water teams, and  intensive, with similar economies of scale, or-
all have lead water specialists/advisors.  ganization, subsidies, and financial viability
Strategic leadership for water resources man-  issues. In irrigation, this would require full at-
agement remains fragmented within the Bank.  tention only up to the bulk delivery and sales
Rural development (including irrigation and  point-where farmers' water user groups would
rural water supply) and the environment are  then take responsibility for further management
under the vice-president for Environmentally  and allocation. Indeed, there may be a case for
and Socially Sustainable Development Network  greater involvement of PSI staff in Bank efforts
(ESSD). Urban water and sanitation (WSS) is to reform public sector irrigation agencies to cap-
under the vice-president for Private Sector and  italize on their expertise in unbundling complex
Infrastructure Network (PSI), primarily to re-  public sector utilities. That would focus atten-
flect the Bank's strategy of encouraging privati- tion on getting water delivery right and make util-
zation of public sector activities, such as water  ities financially viable. It could also focus the
supply and sanitation. The division of water-  attention of irrigation staff on improving the
related development into two separate organi-  management of water below the utilities' deliv-
zational units may promote other Bank policy  ery point and strengthening the linkages between
strategies (privatization), but specific Bank pol- irrigated agriculture and rural development.
38



Improving Bank Management and Internal Incentives
Bankwide thematic groups that focus on the  reform. But as in the Africa Region, the water
water service sectors have been successful at service sectors remain split under separate sec-
knowledge management, particularly in water  tor units, and MNA staffing and funding arrange-
supply and sanitation. There is some cross-  ments make it difficult to respond to regional
coordination among the various thematic groups  water challenges in a timely and comprehensive
on subsectoral issues, and Bankwide discussion  manner.
to advocate the case for holistic water resources
management is just beginning, aided by the  Staff Resources Are Stretched Too Thinly
Bank-Netherlands Water Partnership. But the  Since 1993, there has been a substantial increase
knowledge function is now seriously eroded  of specialist staff in natural resources and envi-
by recent budget cuts in the Bank.        ronment, a modest increase in water supply
and sanitation, but a substantial decrease in ir-
But Successful Institutional Approaches   rigation and hydropower. There has also been
Are Evolving                              a substantial decrease in senior technical staff,
Despite the fragmented approach in the Bank,  primarily due to retirement.
there have been successful examples where   The results of an OED survey (Annex G)
water resource issues were treated in a holistic  show that Bank staff clearly believe they lack the
manner, with the encouragement and active  funds and personnel to carry out the Strategy
support of the regional management. None,  (figure 5.1). Few internal incentives favor the
however, has been institutionalized. And they de-  long-term, comprehensive, cross-sectoral view
pend heavily on unpredictable non-Bank bud-  required for water resource management.
getary support and the use of consultants.  Strongly favored is the project-oriented enclave
The African Water Resources Management approach that focuses on service delivery.
Initiative unit, set up in 1995, is the only self-  Staffing needs and recruitment are contentious
contained unit in the Bank that has performed  issues, with most staff, believing that the Bank
as anticipated in the recommendations for im-  had made little effort to quantify staffing at the
plementation of the Strategy. It is a "bottom-up"  regional and sectoral levels or in the networks.
initiative led by staff with the ability to organ-  Inadequate recruitment of new staff is a signif-
ize and attract non-Bank staffing and funding re-  icant concern, as is the loss of skills to imple-
sources. Not dependent on budgetary support  ment the Strategy-,a view not shared by
from Bank country lending programs, the ini- less-experienced staff.
tiative has considerable flexibility in choosing pri-
orities. This obviously works, since it is gaining  External Stakeholders Also See
strength from partnerships with stakeholders to  Problems
meet borrowers' demand for assistance in for-  NGO interviews also raise some serious questions
mulating their water strategies across sectoral  about the perceived barriers to successful Strat-
boundaries.                               egy implementation: "The high degree of inter-
The comprehensive approach has also made  nal disagreement over fundamental aspects of the
it possible for the Bank to influence almost all policy, such as whether to adopt a comprehen-
the key national and international water re-  sive planning approach, coupled with a low
sources challenges in the Region, including river level of interest in the policy shown by water proj-
basin management. It is still too early to evalu-  ect task managers, indicates that without con-
ate the full impact of the initiative, but sub-  certed efforts by concerned governments and
stantial increases in Bank budgetary support by  NGOs, the policy and its new approaches are frag-
the Africa Region clearly indicate management's ile and may never be fully implemented." From
recognition of its positive role.        this and other evidence, the NGOs expressed con-
In MNA, a sector manager attracted enough  cern that "the pressure to lend . .. has not been
staff to one of the sector units to maintain a re-  removed and continues to work against aspects
gional initiative on comprehensive water policy  of the water policy that recommend greater
39



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Staff Views on Implementing the
Figure 5.1          Bank's Water Strategy
Insufficient personnel
Too much dependence
on outside funding        .....J...     ......      .
-.~~~~~ ~ ~~~   ~  ~  ~~~~~ 1.  ...  . ...   ...
Insufficient budget for a
comprehensive approach                               .
Lack of staff continuity
0%         20%         40%        60%         80%        100%
Proportion of Bank staff in agreement
attention to smaller and cheaper alternatives."  Better Guidelines Are Needed
And they believe that "there is no clear con-  The water sector needs better guidelines. OED's
stituency-either inside or outside the Bank-  staff survey found that overall satisfaction with
strong enough to ensure that the water policy  the Strategy document is high: about 75 percent
will be implemented and enforced."         considered it thorough, consistent with Bank
Local stakeholders are confused by the lack  objectives, and relevant to current Bank work and
of coordination between the Bank's water   borrowers' needs.3 But among informed staff, al-
subsectors, and the mixed messages this sends.  most 60 percent thought that the recommenda-
Country stakeholders say that the Bank ap-  tions are difficult to monitor and somewhat
pears to be internally divided on one of the  platitudinous. Many written comments described
basic principles agreed at Dublin (to deal with  the Strategy as "another unfuinded mandate."
water holistically)-and that the internal divi-  Independent reviews commissioned by OED
sion limits Bank effectiveness, and thus the  also found that the operations policy statement (OP
pressure it can put on governments to de-  4.07; see Annex A) is difficult to use as a guidance
velop a comprehensive regulatory and insti-  document: it is too brief and abstract for most prac-
tutional environment. Even within the various  titioners and Bank staff. Compounding this, they
subsectors, the Bank does not practice what  found that the Strategy needs to be revised, based
it preaches about integrating the approaches  on lessons learned and international best practices.
to water development and incorporating en-  In this, the Bank needs to develop sensitive, flex-
vironmental concerns. Stakeholders in Brazil ible guidelines that permit staff to set assistance
thought that the Bank's urban water group  priorities and to determine acceptable tradeoffs in
seemed fixated on privatization and water tar-  cases where the water Strategy imposes compet-
iffs, driven more by Washington's agenda than  ing demands or where elements of the Strategy
by local concerns.                         are unlikely to be successful.
40



71
Recommendations
R        ecommendation 1: Aim country dialogue and institutional devel-
opment at integrating social and environmental concerns with water
resource development and project implementation.
This requires:                            mitment to the Strategy through shared objec-
* Greater attention to linking water projects tives, realistic diagnostics, and partnerships
with CAS and poverty strategies, to achieving  aimed at policy reform and capacity building.
better understanding of local institutions and  Areas requiring particular attention include:
preferences, and to monitoring and evaluat-  * Updating the Bank's water policy in the con-
ing project effects on poverty.          text of the forthcoming Sector Strategy Paper
* Adopting the use of strategic environmental  and supplementing it with a series of Bank
and social assessments, including consulta-  procedures and good practice notes for each
tions, as part of the overall water resources  subsector.
planning process.                      * Making greater use of adaptable lending in-
* More attention to be given to developing eco-  struments ancl developing new, cost-effective,
nomic instruments to manage conflict in inte-  performance-based approaches to project
grated water systems, including groundwater,  selection, design, procurement, and service
and to balance demands at the river basin  delivery.
level, and between urban and rural populations,  * Strengthening ESW to allow for improved di-
while ensuring access of the poor to water.  agnosis, higher-quality dialogue with stake-
* More attention to factoring in concerns about  holders, and closer linkages with Country
equitable allocation of water and water rights,  and Poverty Assistance Strategies.
in light of local cultural preferences and rural-  * Reorienting capacity-building in the water
urban needs.                             sector toward comprehensive water man-
* Increased emphasis on implementation of   agement through WBI programs and global
safeguard policies during project supervision  and regional capacity-building partnerships.
by the Bank and borrower.
Recommendation 3: Create and sustain more
Recommendation 2: Deploy Bank resources  comprehensive water management alliances
and instruments more effectively to nurture com-  with like-minded partners in the private sector,
41



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
civil society, and the development community.  and country strategies, enhanced core compe-
This requires:                           tencies, additional operational guidance and
* Sustaining involvement in global water pol- training, and more rigorous quality assurance
icy networks and partnerships, with priority  arrangements. Chief among the issues to address:
to cross-border integrated river-basin plan-  * Clarifying the role of the central Water Re-
ning, driven by stakeholder demand, and to  source Management Group and its relation-
the resolution of international water disputes.  ship with Sector Boards and Regional staff,
More attention to in-country water partner-  particularly in relation to institutional and fi-
ships is required to build dialogue and lever-  nancial aspects of the rural water portfolio,
age local knowledge.                     and considering the establishment of water re-
* Entering new partnerships only where the  source management coordinating bodies in
Bank has a clear comparative advantage in  each Region.
doing so, clearly specifying conditions for  * Providing more vigilant and independent
entry and exit.                          quality assurance for safeguard policies af-
* Driving the choice between private and pub-  fecting water development.
lic sector involvement by hard-nosed institu-  * Offering incentives and training to accelerate
tional analysis of what works and what does  staff adoption of a comprehensive approach
not in differing country contexts.       to water resources management.
* Reassessing staffing levels and skills mixes to
Recommendation 4: Strengthen internal man-  implement the water strategy Bankwide. To
agement, monitoring, and evaluation of water re-  ensure adequate staffing and continuity,
source management activities through a     reliance on ad hoc trust funds should be re-
streamlined organization, more cohesive sector  duced and the Bank budget enhanced.
42



ANNEXES
ANNEX A: WORLD BANK OPERATIONAL POLICY 4.07, WATER RESOURCES
MANAGEMENT
1. Bank' involvement in water resources man-    tion of grouncdwater resources, giving pri-
agement entails support for providing potable  ority to the provision of adequate water
water, sanitation facilities, flood control, and  and sanitation services for the poor.
water for productive activities in a manner that  (e) Avoiding the waterlogging and salinity
is economically viable, environmentally sus-  problems associated with irrigation invest-
tainable, and socially equitable.             ments by (i) monitoring water tables and
2. The Bank assists borrowers in the following  implementing drainage networks where
priority areas:                               necessary, and (ii) acdopting best man-
(a) Developing a comprehensive framework      agement practices to control water
for designing water resource investments,  pollution.
policies, ancl institutions. Within this frame-  (f) Establishing strong legal and regulatory
work, when the borrower develops and      frameworks to ensure that social concerns
allocates water resources, it considers    are met, environmental resources are pro-
cross-sectoral impacts in a regional setting  tected, and monopoly pricing is prevented.
(e.g., a river basin).                     The Bank requires legislation or other
(b) Adopting pricing and incentive policies that  appropriate arrangements to establish
achieve cost recovery, water conservation,  effective coordination and allocation pro-
and better allocation of water resources.  cedures for interstate water resources.
(c) Decentralizing water service delivery,
involving users in planning and managing  These issues are discussed in the project
water projects, and encouraging stake-  documents.
holders to contribute to policy formula-  3. Individual water lending operations are explic-
tion. The Bank recognizes that a variety of  itly linked to the country's priorities for reform
organizations-private firms, financially  and investment and to the Bank's program of
autonomous entities, and community organ-  support.
izations-may contribute to decentralizing  4. If inadequate progress by borrowers in these
water delivery functions. Thus it supports  priority areas leads to serious resource mis-
projects that introduce different fonns of  use and hampers the viability of water-related
decentralized management, focusing on   investments, Bank lending is limited to oper-
the division of responsibilities among the  ations that provide potable water for poor
public and private entities involved.   households or conserve water and protect its
(d) Restoring and preserving aquatic ecosys-  quality without additionally drawing on a
tems and guarding against overexploita-  country's water resources.
43






ANNEX B: METHODOLOGY
1. Study Design-The Approach Paper        inherent in some projects was treated, if at all,
of October 21, 1998                       by limited add-on corrective actions, and rarely
The Bank's Water Policy has been operational  by substantive adjustments to project design.
since 1993. Since then the Bank has expanded  Irrigation and water supply/sanitation projects
its sector work and invested $16 billion in over  tried, with varying success, to implement pric-
180 new operations costing $40 billion in 80  ing schedules and cost recovery agreements to
countries. Given this large and diverse port-  help with recurrent costs and achieve more effi-
folio, and CODE's request for an evaluation of cient water management within projects.
the Policy, OED proposes to test compliance of  In 1993, the Bank issued a comprehensive
recent operations with the Policy, assess its rel- statement-Water Resources Management, A
evance to country needs, and estimate the effi-  World Bank PolicyPaper. This paper took three
cacy, efficiency, and sustainability of its  years to complete, a measure of the range and
implementation.                           intensity of the debate that surrounded it. There
was little disagreement on the fundamental
Background                                issue-to reverse the trend whereby demand was
The challenge for future water management is  outrunning supply of fresh water, while its qual-
enormous. In 1995, 29 countries with popula-  ity was declining due to user abuse. While the
tions totaling 436 million experienced water  debate was over the practicality of proposed
stress or scarcity. By 2025, about 48 countries will solutions, it also raised awareness at all levels
do so, and the number of people adversely  in the Bank of the relevant issues and the need
affected will exceed 1.4 billion, the majority in  for a new approach.
the least-developed countries.' Many countries
with limited water availability also have a large  The Bank's Water Policy
proportion of their total area in international river  The Bank's Water Policy has two functions. First,
basins. Where water resources are scarce,  it seeks to encourage reforms in water man-
dependence on shared water increases the risk  agement institutions, policies, and planning in
of friction and social tensions-as is already the  borrowing countries. Second, it is intended to
case along the rivers Euphrates, Jordan, and  guide the Bank in helping borrowers create
Nile.                                     incentives to promote these reforms and the
The Bank's portfolio of water projects  tools to implement them.
accounts for 14 percent of Bank lending.    The Policy has three central themes: (i) a
Between 1985 and 1998, the Bank invested  comprehensive analytical framework for iden-
more than $33 billion in water-related projects. tifying priorities (holistic planning); (ii) the insti-
Until the mid-1980s, however, the Bank treated  tutional and regulatory systems, supported by
the various water subsectors (water supply, irri- legislation, that promote reform (with emphasis
gation, hydropower, drainage, flood control,  on decentralization and participation); and (iii)
etc.) separately. It recognized intersectoral impact the financial and opportunity costs of water in
but did not seek to systematically optimize water  all its competing uses (an economic good).
allocations. The damage to aquatic ecosystems  Annex 1 organizes the recommendations in
45



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
matrix form, and provides a structure for sub-  policies, and planning systems. Thus, reform is
sequent analysis and reporting. Two other impor- identified as the principal outcome of Bank and
tant principles are that special attention should  other interventions.
be given to participation by women because they  Improvements in Bank capacity and specific
are the primary managers of domestic water  Bank interventions are portrayed as inputs and
(the gender dimension), and that the require-  outputs in figure B.1. The Policy recommends
ments of the poor for water should take prece-  a number of ways for the Bank to intervene to
dence (the poverty dimension).             help promote water management reforms. These
include assisting governments through sector
Conceptual Framework of the Study          work and technical assistance in formulating
The conceptual framework for the main analyt-  priority policy, planning, and institutional
ical exercise of the study, depicted in figure  reforms-and investments-that are consistent
B.1, is adapted from the logical framework  with the Bank's Water Policy. These priorities
underlying results-based management. The prin-  should guide the Bank's sector lending pro-
cipal impact of the Bank's Policy is identified as  grams. Individual lending operations should be
the improvement of water sector performance:  linked to and promote the priorities for reform
the provision of water services, such as irriga-  and investment. The Policy also places a high
tion and water supply/sanitation, in an eco-  priority on Bank support for upgrading the skills
nomically viable and environmentally sustainable  of country policy analysts, planners, managers,
manner. The Policy meets the Bank's overarch-  and technicians.
ing objective of reducing poverty by giving pri-  Bank actions are only a modest driving force
ority to the water requirements of poor    behind water management reforms.2 A host of
communities. The Policy recognizes that, to  country and region-specific variables influence
improve the performance of the water sector, it reforms in borrowing countries. Countries dif-
is first necessary to help borrowing countries  fer in their water requirements and endow-
reform their water management institutions,  ments, economic and political conditions,
F i g u r e B . 1   Conceptual           Framework
Impacts                      Improved Water Sector performance
International
Reforms in water management
Outcomes                       ntons, policies, and planning          C     
Outputs                         Bankoperations, lending and
nonlending
Inputs                     Budget, skills, procedures, andpartnerships
46



Annexes
institutional capacities, and environmental prob-  Bank interventions on the ground, the study
lems. Other development institutions, includ-  will reflect OED's conventional standards for
ing multilateral ancd bilateral development  assessing value added: the relevance to coun-
agencies, nongovernmental organizations, and  try conditions of recent Bank activities, includ-
the private sector, also influence the pace and  ing economic and sector work, portfolio and
direction of reform. And promoting collabora-  pipeline investment operations, and develop-
tion with these international actors is an impor-  ments in organization and training; the efficacy,
tant element of the Water Policy. Thus, the  efficiency, and sustainability of activities show-
design of relevant reforms, and the time frame  ing results; and the contribution of the activities
for their implementation, crucially depend on the  to institutional development.
internal dynamics and water situation of the
country, and on the quality of partnerships  Methodology
involved in water sector operations. Figure B.1  The study has four components: a desk review,
aligns country conditions and other interna-  focus-country studies, thematic studies, and out-
tional actors with Bank interventions as con-  reach. It will be conducted in three phases. The
tributors to reform.                      phase 1 review will concentrate on the Bank's
actions, phase 2 will expand the analysis to
Study Objectives                          include the country and other partner contri-
The purpose of the study is to evaluate the  butions, and phase 3 wifl consolidate and report
Bank's performance in implementing the Water  the findings.
Policy and derive lessons for improving Bank
lending and nonlending activities and Bank staff  Desk Review
capabilities. Five main issues will be examined:  The desk review will cover all Bank-financed
* The extent to which Water Policy themes  water projects approved since 1993 as well as
and priorities have been internalized into  projects nearing approval, a total of about 190
Bank procedures, staffing patterns, and staff operations. The evaluation format will use quan-
development programs                    titative scoring to assess in particular the com-
* The quality of lending and nonlending instru-  pliance of these projects with respect to the
ments operational departments have used to  Water Policy. Compliance, in this context, refers
implement Water Policy priorities       to the extent to which the project's objectives and
* The influence Bank interventions have had on  design are intended to promote, or already have
national and international water resource  prompted, reforms in water management insti-
policies and institutions, and how that influ-  tutions, policies, and planning consistent with the
ence was affected by conditions specific to  water policy matrix (table B.1). The relevance
particular countries and shared river basins  of Bank nonlending activities, such as sector
* The development effectiveness of Water Pol-  work and policy dialogue with govemments, will
icy instruments in light of those results that be examined because in many countries they
can be observed                         have led, and even dominated, Bank involve-
* And, most important, country-specific con-  ment in water sector reform. The desk review
ditions most likely to induce water policy  will include in-depth evaluation (including some
reforms-for example, severe water scarcity,  field visits where practicable) of up to 10 inno-
fiscal deficits, liberalizing regimes-and the  vative projects promoting reforms to identify
"levers" accessible to the Bank to encourage  lessons for broader application.
and shape government interventions.
Focus-Country Studies
The study will focus on water management The study will examine the Bank's role in pro-
reforms-the outcomes-as the measure of suc-  moting water sector reforms in five countries.
cess in implementing the Bank's Water Policy.  Brazil has been selected as a pilot because of the
Since it is too early to estimate the impact of rapid evolution of its water management system
47



Bridging Troubled Waters Assessing the World Bank Water Resources Strategy
Ta b I e    B . 1        W   ater       Policy         Matrix          of    R e c o m       m  e n d e d
R e f o r m s
Comprehensive Analytic Framework       _
National/State Level                     Regional/Basin Level           |          Infrastructure Projects
National/state water strategy should reflect  Investments, policies, and regulations in one  I Projects should be planned and assessed in
social, economic, and environmental objectives  part of a river basin potentially affect other  the context of a broad river basin and national
and be based on a sound assessment of water  activities in the basin. The framework should  water strategy. Projects should internalize
resources. The strategy deal should spell out  be formulated in the context of a broad  environmental management needs (e.g.,
priorities for providing water services; estab-  national/state strategy, be sensitive to socio-  water quality, in-stream  flows). Socio-
lish policies on water rights, water pricing  economic concerns related to water, and  economic assessments should accompany
and cost recovery, demand management, pub-  incorporate environmental management    all projects. Project planning should be trans-
lic investment, private sector participation;  needs. This is an indicative and dynamic plan-  parent and participatory, and based on accu-
and meeting environmental management      ning process. Formulation of frameworks   rate information. Projects should be reviewed
needs. Strategy formulation should be trans-  should be transparent and participatory, and  by appropriate management agencies.
parent and participatory.                 based on accurate information.
Institutional and Regulatory Systems    __I
Legal, Policy and Planning               Regulatory and Management                   Water Service Provision
Institutional structures-and laws-at the  Agencies for the regulation of water services  Water service organizations should be finan-
national and regional levels to coordinate the  and the T0anagEmenl of water resources.  E cially and operationally autonomous-within
formulation and implementation of policies  Water services to be regulated with respect  an appropriate regulatory framework. Water
for improved water management, water      to pricing and quality of service. Water man-  services should be decentralized to the low-
service delivery, public investment programs  agement responsibilities include inter alia  est appropriate level. Water service cus-
and environmental management. Policy and  settiing standards, issuing permits, basin oper-  ; tomers and users should participate in the
planning institutions at the river basin level  ations, and the collection and analysis of  formulation of management decisions.
may also be appropriate. Stakeholders actively  data. Regulatory and management decisions
influence policy decisions, and policy-makers  should take place at the lowest appropriate
are ultimately responsible to the public.  level with stakeholder participation.
Economic and Social Issues
Financing and Subsidies                   Water Service Charges                       Poverty Alleviation
Public sector financing should be focused on  Waterservice organizations should befinan-  Special efforts should be directed to meet-
public goods. Water service organizations  cially autonomous and operate under a hard  ing the water supply and sanitation needs of
should be partially self-financing and use pri-  budgetconstraintwith explicit cost recovery  the poor and redressing the neglect of the
vate capital markets; subsidies should be  targets. Service charge mechanisms should  rural poor. Policies that undermine subsis-
transparent and justified; subsidy programs  promote incentives for performance by  tence agricultural or fisheries should be care-
should not create perverse incentives     providers and efficiency by users. Cross-  fully evaluated and, where necessary, there
subsidies between users and regions should  should be adjustments and compensation.
be minimized, but equity pursued.
in the last 10 years, and the Bank's large port-        and India), the screening criteria developed
folio of projects and economic and sector work          from  the desk review, and discussions with
in that country. Selection of the other focus           internal and external partners in the study. Coun-
countries wiUl be guided by studies already being       try selection will be regionally balanced, cover
undertaken by OED (such as the CAEs for China           a significant percentage of Bank-financed water
48



Annexes
projects, and reflect diversity in country-specific  and selected external participants and to help
conditions. For each focus country the study will  produce the design paper; five focus-country
assess-by desk review and selected city/project  workshops to be held in-country with govern-
visits-water management institutions, policies,  ment officials, Bank task managers, relevant
and planning; the role played by the Bank and  international organizations, and other stake-
other actors; partnership with other development holders to discuss the evolution of water man-
agencies; and country-specific conditions.  agement reforms in the country and the Bank's
role; formal and informal interviewvs to learn
Thematic Studies                          from the experience of Bank staff; a phase 1
During phase 2, at least three thematic studies will  workshop to discuss the results of the desk
investigate important issues that cannot be ade-  review and Brazil focus study and revisit the
quately treated in the desk review and focus-  approach for phase 2; and stakebolder workshops
country studies. Final selection of these themes  near the end of the study to review the draft
will follow the workshop concluding phase 1. report. Some of the workshops will be profes-
Three subjects have been tentatively programmed:  sionally facilitated by a consultant with experi-
* Bank Capacity. The stucly would assess the  ence in water management issues and water
evolution of Bank capacity in all water sec-  policy evaluation.
tors-staff qualifications, training programs,
documentation, coordination with other agen-  OED and Partner Roles
cies, and so on.                        OED will link the study with ongoing QAG
* International Watercourses. The Water Policy  studies and OED's CAEs, the rural development
advocates better management of shared inter-  study; the aicd coordination study; and other
national water resources. The Bank is cur- thematic, country, and project evaluations. At the
rently supporting international cooperation in  same time, OED will work closely with Bank
a number of international basins, including the  country departments, national governments,
Aral Sea, the Mekong Basin, Lake Victoria, the  other development banks and bilateral donors,
Nile River, and the Senegal River. This the-  NGOs, the Global Water Partnership (managed
matic study would evaluate the success of by ESDGW), and other partners, as appropriate.
those interventions and include up to four  Because of ESD)GW's strong interest in this topic,
case studies.                           and because of its intention to build on the
* Implementation of Pricing and Cost Recovery  results of the study to formulate a revised Bank
Reforms. Sustained progress toward the objec-  strategy for water resources management, OED
tives of the Water Policy depends in many  will carry out the desk review, country case
countries on successful implementation of studies, and workshops in consultation with
higher tariffs for water. Commitment to such  ESDGW. Guidance for the overall study would
policy reforms depends on political will at the  be provided by a three- or four-person review
local level to execute the new pricing regimes.  panel of senior international experts from devel-
The objective will be to assess whether the  oped and developing countries.
Water Policy pricing prescriptions are effec-
tive in the focus countries and identify pat-  2. Implementation
terns of successful intervention. The 10  The study has three components: a desk review,
in-depth case studies proposed for the desk  focus-country studies, and outreach. It was con-
review may supply other examples.       ducted in four phases. Phase 1 involved dis-
cussion with the Bank's Global Water Unit to
Internal and External Outreach            develop the terms of reference for the study and
In an effort to tap the knowledge and opinions  discuss the methodology, which was subse-
of Bank staff and other stakeholders, the fol-  quently discussed with Bank staff and selected
lowing activities are planned: an entry workshop  external stakeholders. The study officially started
to discuss study methodology with Bank staff  after approval of the Approach Paper by the
49



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Board's Committee on Development Effective-  1994-99) to determine how development and
ness (CODE) on October 21, 1998. Phase 2   project objectives have changed.
undertook detailed examination of Bank data and  * A review of 146 CASs covering 98 countries
documents, reviewed the Bank's organizational  to determine responsiveness to the Strategy.
response to the OP, and initiated a pilot coun-  * An in-depth review of post-1994 operations
try study in Brazil, and a Roundtable Conference  against a standard evaluation process (Annex
to discuss findings in Brasilia, sponsored by  D) to determine responsiveness to the
OED. Subsequently, internal and external stake-  Strategy.
holders met in June 1999 to review interim  * A special study of 292 QAG evaluations cov-
results and make suggestions for improvement.  ering the period 1997-99 to determine qual-
Phase 3 continued the documentary research and  ity at entry and at supervision based on QAG
country studies. OED participated in two coun-  typology.
try studies and roundtables sponsored by ESSD:  * A special study of 103 randomly drawn oper-
India (May 2000) and Yemen (October 2000).  ations to determine coverage and trends of
GWU undertook two further in-country country  social development issues pre- and post-
studies and roundtables in the Philippines and  Strategy (Annex E).
Nigeria during 2000. A special OED study was
also made of China. At all four roundtables, a  In addition to desk studies, many Bank task
standard (anonymous) written questionnaire  managers were interviewed to check and sup-
was applied, and these formed the basis for plement the findings from the desk review.
drawing cross-comparisons among study coun-
try views on Bank effectiveness. Phase 4, final-  Focus Country Studies
ization of the draft report based on feedback  The study examined the Bank's role in pro-
received, started in November 2000 after review  moting water sector reforms in five countries.
of the first draft OED evaluation, report, which  Brazil was selected as a pilot because of the
had been circulated within the Bank and to  rapid evolution of its water management sys-
peer reviewers on September 2000. The revised  tem in the last 10 years, and the Bank's large
draft was completed on December 20, 2000, portfolio of projects and economic and sector
and was sent for formal Bank review in order work in that country. Subsequent country stud-
to present the final report to CODE in late Feb-  ies were regionally balanced in order to cover
ruary 2000.                              a significant percentage of Bank-financed water
projects and reflect diversity in country-specific
Desk Review                             conditions. For each focus country the study
The desk review covered different sets of data:  assessed-by desk review and selected city/
* A comparison of OED's evaluation ratings  project visits-water management institutions,
and lessons learned from over 300 water and  policies, and planning, the role played by the
water-related operations completed in the  Bank and other actors, partnership with other
period 1988-99. These data were then parti-  development agencies, and country-specific
tioned into pre- and post-Strategy groups  conditions.
centered on 1993, and comparisons were
made to establish the differences in county  Thematic Studies
operating conditions.                 The thematic studies were not undertaken, as suf-
* A review of economic and sector work by  ficient funds were not available.
Strategy elements for the same period and
making the same comparison to establish  Internal and External Outreach
how content-classified under Strategy ele-  . An entry workshop with Bank staff was held
ments-varied from one period to another.  in December 1998.
* A content review of Bank 410 operations  * Five focus-country workshops were held-
during 1988-99 (163 in 1988-93, and 247 in  two attended by OED, three by ESDGW.
50



Annexes
* A series of informal workshops was held  * Stakeholder workshops to discuss the draft
with Bank staff to discuss the methodology  OED report were organized by the Water
in the period November-April 1999.       Resources Management Group in October
* A phase I workshop organized by ESDGW     2000.
was held in the Bank in June 1999.
51






ANNEX C: SECTOR PERFORMANCE-RECOVERING FROM
A TROUBLED PAST
At the time the Bank's water Strategy was under  mined the Bank's mission to reduce poverty
preparation, water-related projects were among  and missed the synergy from complementary
the poorer performers in the Bank's portfolio. investments in sanitation. Although there were
Since 1993 that performance has improved,  sound sector policies, none addressed the need
although it remains below the Bank average. for development strategies that were environ-
While the water Strategy may have contributed  mentally sustainable or adequately addressed
to the improving trend, the more immediate influ-  competing uses of water. Even so, almost half
ence was the drive to improve overall Bank per-  of the 120 country-specific projects evaluated
formance following the 1993 Wapenhans Report, were begun without an established policy for the
which was highly critical of the quality of the  sector, or without studies in the sector context.
Bank's lending, and the responses to OED sec-  In many cases, the lack of a sector approach
tor reviews of water supply and sanitation in  meant that there was insufficient provision for
1992 and of irrigation and drainage in 1995.  the poor, and that the Bank responded too
The recovery, however, has not been evenly  much to the pressure from influential segments
distributed or the same for all subsectors. Water  of the population for improved water and san-
supply and sanitation has recovered more than  itation services. Thus many projects addressed
irrigation and drainage since 1993. The principal  immediate local problems, such as how best to
reason for this is that the water supply and san-  get water supplies quickly into major cities,
itation (WSS) subsector has benefited from mul- regardless of other demands for water. Sanita-
tiple Project Improvement Plans (PIPs); irrigation  tion and environmental protection were only
and drainage has had no PIPs. The WSS portfolio,  ancillary considerations. Even when considered,
guided by the PIPs, was extensively restructured  sanitation was normally the first area to be
after 1993 to eliminate the most risky projects and  scaled-down or eliminated when escalating costs
to concentrate on institutional development and  forced borrowers to revise project plans.
financial and organizational sustainability in the  The development effectiveness of Bank oper-
remainder. The irrigation and drainage subsector,  ations and their sustainability was frequently
in contrast, has been, and remains, weak on pol- jeopardized by taking the easy option to increase
icy and institutional issues, focusing instead on  a country's infrastructure rather than exercising
costly participation approaches that enhance  the Bank's leverage to obtain sector reforms.
ownership among stakeholders but leave    Only 2 WSS projects demonstrated success in
untouched some more important factors for sus-  poverty relief; another 20 claimed success but
tainability. This Annex first reviews the issues  provided no means of measuring it. The low pri-
contributing to the poor performance of the past,  ority given to sanitation services and environ-
then analyzes current performance trends.  mental protection was often due to the failure
of governments in setting up efficient sector
Water and Sanitation Lacked a Unified     organizations and management and well-
Sector Approach                           balanced water resources management strategies.
The 1992 OED evaluation of the WSS portfolio  The Bank also failed to promote water tariffs and
found that the lack of a sector approach under-  charges that reconciled economic efficiency,
53



Bridging Troubled Waters. Assessing the World Bank Water Resources Strategy
social equity, and financial criteria. Yet, enforc-  more comprehensive and reminiscent of the
ing such pricing policies is a necessary condi- integrated rural development loans of the
tion for efficiency savings and ensuring  1970s-but may suffer from the problems of
contributions to investment that would increase  impracticality because of their complexity and
the share of the population with safe water and  dispersed geographical nature.
sanitation.                                 The evaluation argued that the Bank should
There was compelling evidence that the pre-  continue to finance large irrigation schemes
requisites for good utility performance are auton-  because of the economies of scale and high rates
omy and an independent regulatory system.  of economic return. Even so, there was a definite
Water supply and sanitation organizations had  trend away from new construction toward reha-
relied too much on government involvement and  bilitation, but not enough was being done to
public finances because the Bank did not use its  promote system upgrading, a process that uses
influence to encourage governments to grant engineering and social sciences to improve irri-
management and financial autonomy to utilities.1 gation service to people, lower unit costs, and con-
Experience showed that the time span on one  serve water where it is scarce. In particular, OED
project is too short for developing an enabling  argued that the Bank's traditional response to
framework and building well-staffed and efficient inadequate water service delivery-raising water
utilities. Thus, OED recommended that the Bank  charges-did not work because it ignored the
should embark on medium-term   programs   incentive structure that enabled stakeholders to
focused on sectoral adjustment and technical work together to improve performance. Nascent
assistance, followed by investment lending only  attempts at participatory irrigation management
when minimum and monitorable conditions are  were starting to yield results, yet there was still
met for a healthy expansion.              insufficient recognition of the new institutions and
governance-particularly financial autonomy-
Irrigation's Success Was Built on Weak    needed to make them successful.
Policy and Institutional Foundations        The environmental and human impact of irri-
The 1995 OED Irrigation and Drainage Sector  gation development was a cause for concern.
Review cautioned that the success of irrigation  Where health issues were incorporated into irri-
may be its Achilles' heel. The review said that gation projects the results were outstanding, but
since irrigation was a major component of the  too many opportunities for a synergistic approach,
green revolution that decreased food prices and  as for example with catchment management,
allowed greater access by the poor, the success  were overlooked. Drainage was still the biggest
of irrigation might lead to complacency and  single source of environmental problems stem-
reduced investment because of lower financial  ming from irrigation and, in the worst cases,
returns. Although irrigation projects were found  salinization of soils led to loss of productive
to be effective in reaching the riral poor, their land and livelihoods. The record on involuntary
perceived success was strongly affected by  resettlement was mixed (Annex F). Sometimes its
macroeconomic conditions, further emphasizing  application was unsatisfactory, partly because
the need for comprehensive appraisal.     of inadequate design due to peripheral Bank
As investment in new irrigation projects involvement and inherited problems, and partly
declined in the 1980s, many projects changed  because of borrowers' reluctance to fully embrace
from a primarily engineering focus to become  the Bank's resettlement policies because of addi-
"rural development" projects with an irrigation  tional costs and delays. As a result, there was an
component, and there was a marked shift from  increasing aversion within the Bank and among
financing of specific irrigation schemes to sec-  borrowers to use Bank finance for projects with
tor loans. The evaluation found, however, that resettlement, particularly dams, even when there
while sector loans appeared to promote reform,  was sound economic justification for doing so.
in many cases they contained minimal policy and  Finally, the evaluation showed that there
institutional content. These projects were also  were a number of Bank institutional constraints
54



Annexes
to the "new agenda" for irrigation reforms. There  strategy in the Bank's subsequent lending and
was a pervasive concern that many of the issues  nonlending operations. As Chapters 1 and 2 of
raised by OED were either marginal or would  the main report explain, a concerted effort was
prove to be costly to the Bank, such as reset-  made after 1993 to shift the direction of Bank
tlement. Irrigation professionals were also wary  water activities.
of increased user participation because they
perceived it would lengthen the implementation  Portfolio Performance
period and may prejudice project results. A sur-  The overall performance of 336 water projects
vey of staff revealed that they thought engi-  completed in the period 1988-99 was below the
neering design aspects were three to four times  Bank average, based on the assessment of proj-
more important than design of agricultural sup-  ect results along three related dimensions-out-
port, production, and marketing facilities. Not come, institutional development impact, and
surprisingly, there was concern at the declining  sustainability of project benefits (figure C.1).2
pool of irrigation engineers and their replacement  OED's exit ratings reflect performance over the
by nontechnical specialists and economists:  life of the project and provide critical insight into
"there is a risk of decline of quality of work in  the current policymaking environment of Bank
the future if this trend continues." Yet manage-  clients and many valuable lessons. Almost half
ment rebutted the recommendation for increased  the water portfolio was active in the most recent
supervision to ensure construction quality and  six years of the period.3
land acquisition primarily because of the budget  Outcome. OED's outcome rating is based
implications-small in terms of overall project  on whether the project achieved most of its
cost, large in terms of Bank staff resources  major relevant goals efficiently and with few
needed.                                   shortcomings, considering the importance of its
Many of the deficiencies noted in the two  major stated objectives and the associated costs
OED reviews were addressed by management  and benefits. It takes account of how relevant
and corrected through implementing the water  the project's objectives were to the country's
FigureC .1          Post-Strategy Water Ratings Are
Below      the    Bank     Average
Better-
140%   -i            i ]   A_                  _  _  _  _  _  _  _  _  _  _
_-              _
120%  - f<_
120%                   _      _    _      \       Bank average 100% /
100%   /     -                ;                            - - -
80%   -0c 1-__                                                 _
60%-
40%                                                                     Worse
____                                             Post-Strategy
20% -      l       l     l     l     l     l     l      l     l     l
1988        1990        1992        1994        1996        1998
Year
55



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
development strategy. The portfolio showed   estimated rate of return in its water portfolio since
marked improvement, increasing from just over  1993, and reduced the risks. The most risky
40 percent satisfactory in 1988 to three-quarters  sector was water supply adjustment lending,
satisfactory by 1991. Thereafter, satisfactory out-  which delivered a rate of return 80 percent
come ratings declined steadily until 1996, when  below expectations-not surprising, given that
they bottomed out at 53 percent. In the last three  most of the benefits are predicated on relatively
years of the period the score improved, but it  quick and substantial institutional reform. Eco-
remained 5-10 percent below the Bankwide     nomic returns from agricultural projects are not
average of 72 percent.4 While this trend seems  without risk either, and mature at about 20 per-
broadly correlated with the introduction of the  cent less than planned. The least risky projects
Bank's water Strategy, this is purely coinciden-  are urban water supply and hydropower, pri-
tal, since a typical water project is implemented  marily because outcomes are determined by
over seven years. Thus, the downward trend   very clearly defined development objectives and
starting in 1991 reflects quality at entry in the early  well-defined costs.
to mid-1980s.5 When the outcome is related to   Institutional development. This was higher
the date of project approval, the results show that  for water projects than the Bankwide average
the upturn after 1996 follows improved quality  before 1994. Emphasis on institutional devel-
at entry since 1992. Much of this was because the  opment-and client ownership-is essential to
Bank increased its attention to portfolio quality  move beyond project financing and to achieve
following the 1993 Wapenhans Report.         long-lasting improvements in developing coun-
Efficiency is an important component of the  tries' utilization of human and financial
outcome rating. Two-thirds of all water projects  resources. Despite a long decline between 1991
had estimates of economic or financial effi-  and 1995, institutional development ratings
ciency. In line with water strategy recommen-  recovered because of greater private sector
dations, urban water supply projects increased  involvement, beneficiary participation, and the
their use of efficiency tests by almost 40 percent.  adoption of a tougher line with public sector
Conversely, there was a decline of 9 percent for  implementing agencies (box C.1). One of the
irrigation and drainage, and 38 percent for  most notable features of the water portfolio is
hydropower. There is a marked difference     the high correlation of unsuccessful project out-
between the optimism shown at appraisal and  comes (even though most projects substantially
outcomes for projects completed after 1993-  achieved their physical objectives) with modest
most of it related to institutional performance.  or negligible institutional development, and
Table C.1 shows that the Bank has improved its  vice versa (figure C.2).
Ta b I e  C .1             eptabIe        Leves        o f  Efficiency
c cept for ad justment lending)
Arerage subsectlral gor e     ateot retuirn (perc;;I)
dI4I hiz5 i.1-l  lisheries                 H iil 14ydropowerF    1y
Pre-Strategy
Post-Strategy
Pre-Strategyefficiency gap'
Post-Strategy efficiency gap'            __                     I       ll      I            -i
a. The "efficency" gap is the difference between appraisal and exit economic or financial rate of return.
b. The rate of return is for those projects that had infrastructure investment components; adjustment per se cannot be explicitly measured by standard efficiency tests
c Retums and ratings for hydropower projects are heavily conditioned by the efficacy of powergeneration, regulation, and managementand only weakly linked to watersector performance.
56



Annexes
High Borrower Ownership Ensures Success
in Albania
The political and economic collapse of Albania provided a win-  drainage). The ex-post economic rate of return is estimated to
dow for reform of the irrigation sector through the Albania Irri-  be 38 percent compared with 17 percent estimated at appraisal.
gation Rehabilitation Project (1994-2000). The Bank moved  Overall, 85 percent of WUAs have successfully managed WUA
quickly from appraisal to approval (10 months) and provided  administration, water allocation and distribution, O&M, and fee
substantial supervision to respond quickly to an evolutionary and  collection and are beginning to become a focus for self-help on
community-driven reform program. A new Irrigation Code and  issues of social development and governance. Actual cost recov-
Regulation for Water Users' Associations was approved by Par-  ery by WUAs ranges from 35 percent to 100 percent, and aver-
liament in 1996. A comprehensive Law on Irrigation and Drainage  ages 60 percenL
covering restructuring of all existing public sector water enter-  There are still unresolved problems. As the ECA Region
prises into drainage boards was adopted by Parliament in 1999.  notes: 'despite their achievements, WUAs and federated WUAs
Irrigation sector reform succeeded because it had strong  have yetto prove their sustainability, simply establishing [them]
central government support and newly established local man-  is not a goal in itself ... but the start of a long journey toward
agement. Conservative public sector agencies unwilling to  establishing sustainability." A large number of absentee land-
reform were bypassed by government and replaced by the pri-  lords threatens the sustainability of many WUAs. Agriculture
vate sector. Water user associations (WUAs) were set up and  remains primarily at a subsistence stage and economically sub-
given complete responsibility for operating all irrigation facil-  optimal farm sizes are a disincentive to farming. About 40 WUAs
ities (including reservoirs and primary irrigation canals) over an  have ceased operation due to lack of interest in agriculture and
area of 70,000 ha, and 12 WAUs have federated. Rehabilitation  mass urbanization of farmland around Tirana and Durres. Unre-
significantly exceeded appraisal projections and at consider-  solved land drainage problems are causing waterlogging of the
able cost savings (32 percent for irrigation and 57 percent for  coastal plain and depressing agricultural production.
Fig   ~ u re  C          i 2                                      :
Figure C.2             Key to Satisfactory Outcomes                                       ,.
(n=306 projects)
60%
Proportion of   50%
completed                _ %
water projects
with institutional  40%
development
that is:         30%
g Substantial       _                        _
20%
*   Modest
*   Negligible   10%
0%                                ___
Satisfactory                    Unsatisfactory
OED outcome rating
57






ANNEX D: ASSESSING WATER PROJECT DESIGN UTILIZING THE WATER
POLICY MATRIX DEVELOPMENT FOR THE BANK'S 1993 WATER
STRATEGY PAPER
Evaluation Methodology                            2. Modest: The project design addressed these
1. Does the project intervene in a specific category?  issues with numerous shortcomings.
If yes, score the nature of the intervention    1. Negligible: The project design addressed these
according to the general criteria listed below.   issues in a completely inadequate manner.
2. If the project does not intervene in a specific  N/R: Category not relevant (N/R) in this project
category, is the category relevant to the proj-      context.
ect design? If yes, does the SAR/PAD discuss    N/D: Category appears relevant, but no specific
the issue?                                           project component addresses it, and the
SAR/PAD does not discuss the category
Scores:                                                 (N/D) in sufficient detail. [Note: this mark has
4. High: The project design addressed these             a negative connotation because, if the issue
issues with no major shortcomings.                   is relevant, the SAR/PAD should discuss it.]
3. Substantial: The project design addressed      D: Category is relevant, no specific project inter-
these issues with some major shortcomings.         vention, but the SAR analyzes the issue.
T a b I e  D . 1                  s m  e n t   C r i t e r i a   f o r E1im       afM      9
National/state level                               mm                       Projects
National/state water resources                                             Water resource planning for physical
Strategy/plan                            ,                                    infrastructure
Legal and policy                    -i                                     Water service organizations
Water resources:                       .    .    >                         Urban water utilities
National/state water laws, policies, decrees  , .   l r  Iq t I J1.L I l`1'1:!-.  Irrigation water user organizations
Water councils & commissions                                                Rural water user groups
Hydropower companies
Water services:                    *    . *'  in ,q ':iI ''
Laws for water service & regulatory
organizations Policy statements
and government decrees
Financing and subsidies               .         |                           Disadvantaged groups
Infrastructure financing terms and conditions  .i,ni..I..,,-,1, r  Ir.l. L:-i  Low-cost WS&S for rural and urban poor
-  ,i ,, ,'\ j,  'CI.4s1+l>  ,, it clResettlement
Gender
Indigenous groups
59



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
1. Comprehensive Management                  ity, legal mandates, political backing,
A. National/State Level (alphanumerical      etc.?
score)                               VI.   Are the policy institutions supported by
I.    Based on sound assessment of water         competent water management agencies?
resources and alternative development  VII.  Water Service Policy and Legal Interven-
scenarios?                                 tions (alphanumerical score)
* Environmental/ecological issues an       * Effective regulatory framework: pricing"
integral part of the framework?            service, environmental standards, etc.?
* Stakeholders fairly represented in frame-  * Water service organizations operate on a
work formulation?                          commercial basis?
II.   The framework addresses policy issues,   * Explicit policy statements regarding: serv-
such as water rights, water pricing, cost  ice pricing, subsidy levels, etc.?
recovery, private sector participation,  * Water service organizations appropriately
capacity building, etc.?                   decentralized?
III.  Is there a clear relationship to national/  B. Management and Regulation
state goals and policies?                  Water Resource & Environmental Man-
IV. B. Regional/Basin Level (alphanumeri-        agement Agencies (alphanumerical
cal score)                                 score)
V.    Based on sound assessment of water       * Agency's monitoring and planning capa-
resources and alternative development      bility strengthened?
scenarios?                               * Collaboration  with  other agencies
* Environmental/ecological issues an inte-   involved in water management, i.e., envi-
gral part of the framework?                ronmental, fisheries, agriculture?
* Stakeholders fairly represented in frame-  * Does the agency have an outreach/ pub-
work formulation?                          lic education program?
* Is there *a clear relationship to the    * Plans and decisions reviewed and ap-
national/state framework?                  proved  by  an  appropriate  policy
C Projects (alphanumerical score)            institution?
* Based on a sound assessment of water  VIII. If the agency provides infrastructure (i.e.,
resources?                                 bulk water supply or flood control), is this
. Environmental/ecological issues an inte-   unit a distinct financial and operational
gral part of project planning?             entity, separated from planning respon-
* Project embedded in broader regional/      sibilities?
basin and national/state frameworks?       Water Service Regulation Bodies (alpba-
* Is project planning and review con-        numerical score)
ducted in a transparent and participatory  * Does the body set cost recovery, tariff,
manner?                                    and accounting policies?
- Does the body monitor the financial per-
2. Institutional Development                 formance of water service organizations?
A Legal and Policy                         * Does the body review and approve tariff
Water Resource Policy and Legal Inter-     proposals for water service organizations?
ventions (alphanumerical score)          C Water Service Organizations (alpha-
* Are there coordination mechanisms          numerical score)
across agencies and jurisdictions?   IX.   Is the organization financially and oper-
* Do major stakeholders (water users, civil  ationally autonomous, and operating on
society, NGOs, etc.) participate in policy  a commercial basis?
making?                                  * Is the organization under an appropriate
* Do the policy institutions have sufficient  regulatory framework for pricing and
power to be effective? i.e., budget author-  service quality?
60



Annexes
- Is the water service organization appro-    * Is the tariff structure analyzed with respect
priately decentralized?                       to promoting water use efficiency and
* Do water service customers and users           equity?
have a voice in management decisions?       * Are the collected revenues put back into
service provision?
3. Economic and Social Issues                 C Disadvantaged Groups (alphanu-
A. Financing and Subsidies (alphanu-             merical score)
merical score)                              * Is there a social assessment of the peo-
* Financing terms explicit?                      ple affected by the project?
* Are subsidies explicit and justified?       * If there is a project component targeted.
* Does the water service organization/           at the poor (i.e., low-cost WS&S), does
agency contribute some degree of self-        it take the special needs of affordability,
financing?                                    appropriate technology, community par-
* Are nonpublic sources of financing used        ticipation, etc. into account?
(private banks, bonds, equity markets, etc.?)  * If resettlement is involved, is there an ade-
A Water Service Charges (alpbanu-                quate resettlement plan?
merical score)                              * When relevant, are the specific needs
* Are there explicit cost-recovery targets?      and participation of women considered?
* Is there a sound financial analysis which   * When relevant, are the specific needs
examines the need for tariff increases        and participation of indigenous groups
and the impact on the financial health of     considered?
the organization/agency?
Figur e D             Water Policy Review-Sample Project
Design        Analysis
1. Project Data:
Country:  China
Project Name-ID:  Shanxi Poverty Alleviation Project
Effectiveness Date:  September 5, 1996
Closing Date:  December31, 2002
% Disbursed  45.7
Task Manager:
Partners Involved:
Reviewed By:
Checked By:
Date Posted:  03/01/99
2. Project Objectives, Financing, Costs, and Components
Project Costs (US $ million)  Appraisal
Total                          182.8
List Financing Sources
Shanxi Province                45.7
Prefectures/Counties            7.3
Farmers                        29.8
IDA                            100.0
61



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Figure D.1                Water Policy Review-Sample Project
. Design Analysis (continued)
Executing Agencies:
Objectives: Help alleviate poverty in the 20 poorest counties of Yuncheng and Luliang Perfectures in Shanxi Province through activities aimed
at raising incomes of about 3 million poor through rehabilitation of an existing irrigation system, improvement of rural roads and construction of
village water supply schemes, land development, expansion of livestock raising and horticulture, and expansion of primary agriculture process-
ing capacity.
Components:
(iW.   Construction of a new Pumping Complex in Langdian on Yellow River for Yuncheng Irrigation System.
(ii).  Improvement and expansion of Yuncheng Irrigation System
(iii).  River beach development with irrigation and rural infrastructure on 13,000 ha in Yuncheng
(iv).  Construction of 78 village water supply schemes in Yuncheng (620,000 people) and Luliang (64,000 people).
(v).   Improvement of existing rural roads 209 km in Yuncheng and 118 km in Luliang.
(vi).  Soil and water conservation works (56 check dams, 4,200 ha of afforestation on sloping lands, 13,400 ha of terracing)
(vii).  Agricultural processing facilities, livestock raising and expansion of area under fruit and nut trees.
(viii).  Support for program targeted at poor and disadvantaged women
(ix).  Project management, training and overseas study tours.
3. Overall Design Rating: 3
Analytic Framework                      Institutional & Regulatory                  Economic and Social
National/       Basin/                      Legal,
State          Region         Infra-       Policy &    Management       Water      Financing &     Service       Poverty/
Level           Level        structure    Planning    & Regulatory     Services     Subsidies      Charges       Gender
2.5              3.5            3.5       (WR) ND       (WR) N/D          3             3            35             3
(WS) 3        (WS) 3.5
4. Water Policy Review Issues:
(i).   Also the water sector policies and the implementation strategy have been presented and discussed for the region in the context of the
project, their relevance to the national water policy is not discussed. At least one should know how the regional policies are dictated by
the national policy and how the experience of the regional policies will influence the national policies and water management strategies.
(ii).  The water resources assessment for the region should have been more elaborate. The project discusses the water requirements of the
area, but it does not discuss the resource availability nor does it give the regional or the basin water balance. The conjunctive use of the
surface and groundwater is proposed without throwing some light on the water balance
5. Implementation Issues:
(i).   Implementation is ahead of schedule, but the initial momentum of the project progress appears to have slowed down. This may reflect
on some weakness in the project design and/or the implementation arrangements.
(ii).  Progress on many components and amongst the counties is uneven
(iii).  The construction of Langdeng Pumping Station, the main source of water supply for the Yancheng Irrigation Area has hit some snag. There
appears to be lack of commitment by the Government and uncertainty surrounding the financial viability of the scheme. The prefecture
is not sure that it will be able to pay the province back for the investment on the pumping station (A serious issue indeed!)
(iv)   Counterpart funding is insufficient in some cases.
62



Annexes
Water Policy Review-Sample Project
Figure        D .1        Design          Analysis            (continued)
Evaluation Notes
Analytic Framework
National/State Level:       There is no discussion of the national strategy. The Province has designed the project in accordance with the
most plausible development plans. These take into consideration the participation, environmental and other
policy issues. The relevance to or impact on the national strategies is not discussed.
Basin/Regional Level:       The project is designed for regional development. The strategy for the development and management of the
resources as presented for the region is endorsed by the provincial government. (But, does the provincial gov-
ernment have a formal water sector management strategy?)
Infrastructure              An excellent presentation. The project fits in the China's poverty reduction strategy plans which aim at address-
ing poor areas through investments in land development, rural works and rural enterprise.
However, the water resources assessment (p 3.3-3.6) lacks analysis of resource availability, its firmness and
the regional water balance.
EIA is prepared for each prefecture (p 3.40) and approved by NIPA (Annex 13). The stakeholder participation is
ensured (p 3.53); the area targeting appears to be fine, but the community targeting may be problematic. (p 3.54).
An elaborate and good discussion of the socio-economic aspects of the beneficiaries and the PAPs is given (p
2.9-2.95 and Annex 12). Resettlement Action Plan based on the Chinese Law of Land Management has been
approved by IDA (p 3.49)
Institutional & Regulatory
Legal, Policy & Planning:   The national water policy is not discussed. The provincial and the regional policies are presented.
Management & Regulatory:    The capabilities of the governmental agencies have been assessed and the strengthening of the institutional
capacity is provided for, where needed. (p 4.2). The institutional framework provides for collaboration with the
other agencies through the Project Leading Group, which also facilitates overseeing by the provincial govern-
ment and reviewing the project plans etc. (p 4.1) The planning functions are with the provincial government
while the operation is with the prefectures and its subordinate agencies.
Water Services:             The village committees appear to have some degree of financial and operational autonomy. However, the influ-
ence of the government is predominant. The water charges are based on volumetric assessment, but the funds
go to the province through the perfecture. The prefectures, and the counties are responsible for O&M through
funds provided by the provincial government. (p 4.8)
Economic and Social
Financing & Subsidies:      Financing terms are explicit in table 3.2. The subsidies are implicit in the cost recovery arrangements, though
the government's declared policy is to recover all costs from the beneficiaries. (p 4.7). There is qualitative dis-
cussion of the risks involved (p 5.26); financial implications and the impact on economic viability should have
been presented.,
Water Service Charges:      The cost recovery targets are explicit. The irrigation use is assessed on volumetric basis to recover for O&M
and loan repayment.to the province. The cost recovery on terraces and check dams is 50%, beach land devel-
opment 60%; rural roads full; and water supply schemes full O&M and 60% investment cost. (p 4.7)
Poverty/Gender Focus:       Technology for addressing poverty issue is fine. The project supports WID through support to China's Women
Federation
63



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Figure D.2                Water Policy Review-Sample Project
Design Analysis
1. Project Data:
Country:  Philippines
Project Name-ID    Water Districts Development Project
Effectiveness Date:  Not Given in the last PSR of Dec 8, 1998
Closing Date:  June 30, 2003
% Disbursed:  Nil
Task Manager:
Partners Involved:
Reviewed By:
Checked By
Date Posted:
2. Project Objectives, Financing, Costs, and Components
Project Costs (US $ million)       Appraisal
Total                                80.7
List Financing Sources
IBRD                                 56.8
MWSS/City Government                 11.5
User Installation Charges            12.4
Executing Agencies:                Land Bank of the Philippines, LWUA, City Governments and MWSS.
Objectives:
(iW.   Help participating LGUs and water districts plan and implement sewerage and sanitation investments based on the residents' wishes
and willingness to pay.
(ii).  Assist the Government of Philippines in developing a transparent regulatory mechanism in order to facilitate private sector participation
in water utilities.
Components:
(i).   TA designed to pilot and field-test a privatized public performance audit system.
(ii).  Construction of sewerage, sanitation, and drainage infrastructure in the cities of Davao, Cotabato, Calamba and Cagayan de Oro.
3. Overall Design Rating: 2.5
Analytic Framework                     Institutional & Regulatory                  Economic and Social
National/      Basin/                      Legal,
State          Region         Infra-      Policy &    Management       Water      Financing &     Service      Poverty/
Level           Level       structure     Planning   & Regulatory    Services     Subsidies      Charges       Gender
3                 3            3.5       (WR) 3         (WR)   2        3.5           2.5           3.5           2
(WS) 3        (WS) 2.5
4. Water Policy Review Issues:
(i).   Generally the water supply and sewerage (WSS) projects are designed in isolation from the national water resources development plans-
though they conform to the specific strategies of the WSS sub-sector. The national water plans include those for the various sub-sectors;
therefore, the development plans of the sub-sector components must link them to the national plans.
(ii).  Discussion of gender issues, particularly the role of women, are usually not adequately discussed in the project documents for WSS projects
64



Annexes
Water Policy Review-Sample Project
Fi,gure       D             eDesign       Analysis           (continued)
5. Implementation Issues:
(i).   This project is facing major implementation projects, which shows weakness of project design, particularly the financing and implementation
arrangements.
(ii).  The last supervision mission has rated the "DO" component unsatisfactory. Project restructuring and even cancellation are currently being
discussed.
Evaluation Notes
Analytic Framework
National/State Level:       The Government strategies and the work plans are well defined for the water supply and sewerage sub sec-
tor. These are based on full stakeholder participation and aim at creating an enabling environment for a large
and rapid infusion of private sector investments and to invest in sanitation infrastructure in a demand-driven,
financially sustainable and technologically cost-effective manner. Unfortunately, in discussing the Government
strategies, no reference is made to the Government's strategies and the on-going plan formulation.
Basin/Regional Level:       Same as above.
Infrastructure              A good participatory approach has been adopted in project formulation starting from the planning to the design
stages. This would ensure that the project interventions are demand-driven. (p 4.6P and Annex 13) The project
follows the Government's development objectives for the WSS sub-sector. The environmental considerations
are taken into consideration in the project design. No resettlement is needed. The land for the facilities will
be purchased at the market price. The water resources assessment is weak in the project documents. The dis-
cussion of the water quality aspects is inadequate.
Institutional & Regulatory
Legal, Policy & Planning:   The National Economic development Agency (NEDA) of the Philippines is the nation's highest policy advisory
committee, chaired by the President. The N EDA Board laid out policies for water supply and sanitation in 1994,
which led to the formulation of strategies for the sub-sector development. These and the National Water Cri-
sis Act of June 1995 provide the necessary regulatory framework for development.
Management & Regulatory:    The Land Bank of the Philippines would on-lend to the City Level Local Government Units (LGUs) to implement
the project. The water districts would then operate the utilities. The implementation methodology is complex
and risky.
Water Services:             The Local Water Districts is a "water supply franchise" and would be the water service organization. These
are autonomous bodies and would have full O&M responsibility.
Economic and Social
Financing & Subsidies:      The financing terms are explicit, but difficult. The risk analysis is routine sensitivity evaluation of the probable
set backs to the project assumptions.
Water Service Charges:      The cost recovery targets are well set based on the beneficiaries' ability to pay for the services.
Poverty/Gender Focus:       It is not a poverty targeted operation. The discussion of the indigenous groups and the participation by women
is weak.
65



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Table D =
o                                 0         =~~~~~~~~0C
S  0                5         0 
Co          °                   co    i   oi                               C i'
43178       ECA        1999   |   Al     I ID         SIL      Albania        Second Irrigation and Orainage Rehabilitation
3562       EAP        1994       Al       WRM        SIL      China        I Xiaolangdi Multipurpose
1409       AFR        1998      WY       WRM         SIL      Lesotho      i Highland Water
10478       SAR        1996       UM       UWSS       SIL      Pakistan       Balochistan Natural Resources
10501       SAR        1997      Al        ID         SIL      Pakistan       National Drainage Program
7105       LAC        1994       Al       ID         TAL       Ecuador       IrrigationTA
60132       MNA        1999       UU       RWSS       SIL      Tunisia        Greater Tunis Sewerage & Reuse
6522       LAC        1994       WU    I UWSS    I   SIL       Brazil        Espirito Santo
38895       LAC        1998       VM       WRM        SIL       Brazil        Federal Water Management
8319       ECA        1994       WU       UWSS       SIL       Bulgaria      Water Companies Restructuring and Modernization
7713       LAC        1996       VM       WRM        SIL       Mexico        Water Resources Management
3637       EAP        1997       WvV      RWSS       SIL      China          National Rural Water Ill
36405       EAP        1997       Al       WRM        SIL    ! China          Wanjiazhai Water Transfer
36414       EAP        1998       VP       ENV        SIL    : China          Guanxi Urban Environment
49700       EAP        1998       Al       ID         SIL       China         Irrigated Agriculture Intensification 11
35783       ECA        1996       VP       WSM        SIL       Lithuania     Siauliai Environment
40566       MNA        1998       WR       RWSS       SIL       Morocco       Water Resource Management
46052       LAC        1997       Al       WRM        SIM       Brazil        Ceara Water Resource Management Pilot
35805       ECA        1998       WW       UWSS       SIL      Armenia      i Municipal Development Project
3644       EAP        1994       VR       WRM        SIL      China          Xiaolangdi Resettlement
4010       EAP        1994       VM       HYDRO      SIL      Indonesia      Dam Safety
39015       AFR        1998       WW       J UWSS     SIL       Mozambique    National Water Development I
4799       EAP        1995       PH       HYDRO      SIL       Thailand      Lam Takhong Pump Storage
10500       SAR        1998   1   Al      IID     I   SIL       Pakistan      Punjab Private Sector Ground Water
7707       LAC        1994       WW       UWSS       SIM       Mexico        Second Water Supply Sanitation
7710       LAC        1994       VP       uwss       SIL       Mexico        Northem Border Environment
50745       SAR        1999       WY       RWSS    I  SIL       Bangladesh    Arsenic Control
8037       LAC        1997       Al       ID         SIL       Peru          Irrigation Sub Sector
42442       LAC        1997       AA       WSM        SIL       Peru          Sierra Natural Resources
10463       SAR        1995       VP       ENV        SIL      India          Industrial Pollution Prevention
4611       EAP        1996       WS       UWSS       SIL       Philippines   Manila 2nd Sewerage
66



Annexes
Comprehensive management               Institutional development            Economic and social issues
Legal and policy   Management and
regulation
fa~~~~~~~~~~~~~~~~~~~~~~~~~~~a
=                                      ci~~~~~~~~~c
|           !-
4        4         4        4         4        3,5      3 5       3        3.5       3.5      3.5       4
4    ,   4         4        4         3.5      3.5      3.5      3.5        4        4         4       N/R
4        4         4        4         4        3.5       4       3.5        4        4         4        3
4        4         4        3         4        D         4        D        N/R       4         D        2
4        4         4        4         3        3         4        3         3        2         2        3
4    ,   D         4        4         3        3.5      3        N3R        4        4         4       N/fR
4         )D       0        4        N/R       0        N/D       4         D        4         4        4
4       N/R       N/D       4         4       N/D    '   4        4         4        4         4        4
3.5       3         3        3         4        4         4        4         3        2         2        3
3.5       3         3       3.5       3.5      3.5       3.5      3.5       3.5      3.5       3.5       3
3.5       3         3       N/R        2       N/R        4       N/Rf      N/Rf      D        N/R      N/R
3.5      3.5       3.5       4        3.5       4        3,5      3.5       3.5      35        3.5       3
3.5      3.5       3.5       4        3.5      3.5       3.5      3.5        4        4         4        2
3.5      3.5       3.5      3.5       3.5      3.5       N/R      3.5       3.5       4         4        2
3.5      3.5       3.5       4        3.5      3.5       3.5      3.5       3.5      3.5       3.5      15
3.5      3.5       3.5       4    i   3.5      3.5       3.5      3.5       3.5      3.5       35        3
3.5       4         2        4         0       N/R        4       N/R   I   N/R      N/R        2       N/R
3.5       4         3        4         4       N/R        4       N/Rl       3        1        2.5       3
3.5       4         4       3.5       NA       3.5       3.5      3.5        4       3.5       3.5      3.5
3'5   1   4         4        4    ,   N/R      N/Rf      3.5      3.5       N/R       4        3.5      3.5
3.5       4         4        4         3        3        3.5      3.5        3       3.5       N/R      N/R
3.5       4         4        41       3.5       3        3.5       3        3.5       3         3        3
3.5       4         4        4        N/R      N/Rf      3.5      3.5   'N/R         3.5       3.5      2.5
3.5      0         2.5       3         D        D    ,    4        4         4        4         3       2.5
3.5       D         3        4         4        D         4       ND         4        3         3        2
3.5,      D         3        4         D        D         4       ND         4        3         3        3
3.5       D         D        4         0        D         D        3         4        3         3        4
3.5       D         0        3         D 0            I   D        D         4        4         3        2
3.5       0         0        4         0 D      D         1        3    .    3        4         4        4
3.5       0        N/D       3         0       N/f        3       N/R   I   N/R       4         4        4
3.5      N/D       N/D       3        N/R      N/D       N/R      N/D)       3       3.5       3.5      N/R
I_____________ _( (continues on following page)
67



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
,    ;                              i    1sI
Table        D.2                                                       r        j     
Lv2     aIJ    L~ r                                                 1__ ___ __ ___   I
._          .          _          o0,                  e                        C 
E ~~~~~~~~~ 
X~~~~~~~~~~~~~~~~~~~' 1' I T.                                L LI, C. I k
.                                         _
0g                                                     E
-                                CD 0=                              0          -
51124        LAC        1998       MY        UWSS        TAL       Panama         Utilities Restructuring
3594        EAP        1996       Al        ID          SIL       China          Gansu Hexi Corridor
10480        SAR        1997       WS        UWSS        SIL       India          Bombay Sewage Disposal
41887        SAR         1999      W         UWSS        SIL       Bangladesh     Municipal Services
3593        EAP        1994       AM        ID          SIL       China          Songliao Plain Agriculture Dev
10484        SAR        1996       WW        RWSS    i   SIL       India        i Uttar Pradesh Rural WSS
10485        SAR        1996       VM        WRM         TAL       India          Hydrology Project
7701        LAC        1994       Al        ID      I   SIL       Mexico         On Farm and Minor irrigation
39022        EAP        1999                 UWSS        APL       Philippines    LGU Urban Water and Sanitation
1075       AFR         1997       WU        UWSS        SIL      Guinea          Third Water Supply
10516        SAR        1997       WR        RWSS        SIL       Nepal          Rural Water Supply and Sanitation
38570        AFR        1997       Al        ID          SIL       Tanzania       River Basin Mngmt and Smallholder Irrig Improv
3649        EAP        1996       Al        ID          SIL       China          Sanxi Poverty Alleviation
8173        LAC        1994       Al        ID          SIL       Uruguay        NRM and Irrigation Development
8288        ECA        1995       WU        UWSS        SIL      Azerbaijan      Greater Baku Water Supply Rehabilitation
9545        SAR        1995       VM        WRM         SIL       Bangladesh     River Bank Protection
45629        EAP        1998       WY        UWSS        SIL       Cambodia       Urban Water Supply
3596        EAP        1995       Al        WRM         SIL       China          Yangtze Basin Water
3599        EAP        1996       W         ENV         SIL       China          Yunnan Environment
3648        EAP        1996       US        ENV         SIL       China          Second Shanghai Sewerage
8406        ECA        1995       VP     . WSM          SIL    ! Estonia         Haapsalu and Matsalu Bays Environment Project
764       AFR         1996       WU        UWSS        SIL    I Ethiopia        Water Supply Development and Rehab
39929        ECA         1998      SA        RWSS        FIL       Georgia        Social Investment Fund
8510        ECA        1996       Al        ID          SIL       Kazakhstan     Irrigation and Drainage
8595        ECA        1996       WWVI      UWSS        SIL       Poland         Bielsko-Biala Water and Wastewater
0       ECA         1999                 UWSS       SIL       Poland         Wroclaw Water and Wastewater
8867        ECA        1997       WW     I UWSS         SIL      Turkmenistan    Water Supply and Sanitation
4830        EAP        1997    j  WY        UWSS        SIL       Viet Nam       Water Supply
3954        EAP        1994       Al        ID          SIL       Indonesia      Java Irrigation Imp and WRM
4834        EAP        1995       Al        ID          SIL       Viet Nam       Irrigation Rehabilitation
40720        ECA         1999   I  WU        UWSS        SIL       Kazakhstan     Atyrau Pilot Water Supply and Sanitation
68



Annexes
Comprehensive management 1             Institutional development            Econom ic and social issues
Legal and policy   Management and
regulation
! _             .        ag
Ec  g~~~~~~~~c
e         S ee        E              e          ,        S        -f
A               _  _  _ }  e;                                                       _  _  _  _ _0      _ ,
3.5      N/R        2       N/R   i   N/D       3    ,   N/D       4         4        4         3        3
3.5      N/R       3.5      3.5       N/R      N/R       N/R       3        2.51     3.5       35        3
3.5      N/R        O        4        N/D       D    .             D         3        4         3        4
3.5      N/li      N/R       3        N/R       D        N/R       4         4        3         2        3
3.5   IN/H         N/R       4        N/R      3.5       N/H      3.5   !   3.5       3        3.5       3
3.5      N/R       N/R       3        N/R       3        N/fl      3         4        3         4        4
3.5   !  N/R       N/R      N/D                 3         4        ?        N/Rf      2         2       N/fR
3.5      N/R       N/R       4         0        0         D        4         3        4         3        2
3.5   1  N/R       N/R       3        N/R       D        N/R      DB         3        4         3       N/D
3.4       3         3        3         3        3         3        3         4        4        3.5       3
3.3      N/H       N/R       4        N/R       3        N/R       3         4        3         0        4
3.1       4         4       2.5        3        3         3        3        2.5      2,5       2.5      25
3    '   2 5      3 5      3.5   i   N/D       3        N/D      3.5        3        3        3.5       3
3        2.5      N/D       3         D        3         3        D         4        2         3        2.5
3         3        3        3         2        2         3        3         2        3         3        3.5
3    1   3         3        3         3       N/Df       3        D     '   3        2        N/D       3
3        3         3       3.5    '  N/D       2.5       D        3        2.5       3         3        2
3        3         3       3.5        3.5      3.5      3.5       3 5       3    '35           3        2.5
3        3         3       3.5        N/D      3.5      N/D      3.5        3        3         3        2
3        3         3        3        N/R       3.5      N/R      3.5       N/R       35        3        3
3        3         3       3.5        3        2.5       3        3     1   3        2.5       3        2.5
3        3         3        3         3        3         3        3        2.5       3         3        3
3        3         3       3.5        NA       NA       3.5       NA       NA        3         3        3.5
3        3         3        3         3        3         3        3         3        3         3        2
3        3         3       35         3        3        35       3.5       3.5       3 5      3.5      2.5
3        3         3        3         3        3        3.5      3.5       3.5       3 5      3 5       2.5
3        3         3        3    1    3        3     12.5        2.5        3        2         3        2.5
3        3         3       3.5        N/D      3        N/D       3 5      3.5       3         3        2
3         3       3.5      3.5        2.5      3        2.5       3         3        3        3.5       1
3    J    3       3.5      3.5        3        3        3.5       3.5     3.5        3         3        1.5
3        3        NA        3         NA       NA        3        3         .5       3        3.5      2.5
I _ __ _ _ __ _ _ __ _ __ _ ___ _ - __ _ __ _ _ __ _ _I (continues on  following page)
69



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Table D.2 ®6~ Po                                edaw 1%i39yO9 &eG®?Vd1Um       i2o iG          gJ4G(D%       Wgrnf®r
P(DOMOT Wr2ubmtg®~~o1
a)
.                          2
oL         =                                                       -          U 
_       ..                                    . 
46042        ECA        1998       Al       ID          SIM       Kyrgyz Rep    Irrigation Rehabilitation
38399        ECA        1998       Al       ID          SIL       Macedonia     'rrgalcr, RehabI:aTion
3602       EAP         1996       US       ENV         SIL       China        IHubei Urban Environment
43444        ECA        1998       WS       UWSS        SIL       Croatia        Municipal EnvironmentaT Infrastructure Project
50911       ECA         1999       VM       ENV         S]L       Georgia        integrated Coastal Management
10530       SAR         A998       Al       to          SIM      Nepal          Irrigation Sector Development
10418       SAR         1993       WR       RWSS        SIL      India           Karnataka Rural WS and Env
5435       MNA         1994       WW       UWSS        SIM      Yemen          Taiz Water Supply Pilot
5907       MNA         1999       WU       UWSS        SIL       Morocco        Water Supply V
10408       SAR         1993       TR 1     ID          SIL      India           Bihar Plateau Development
5731       MNA         1997       WS       UWSS    I   SIL      Lebanon         Coastal Pollution Control and Water Supply
9961       SAR         1993       Ai       10          SIL      India           Uttar Pradesh Sodic Lands Reclamation
6541       LAC         1993       WY       UWSS        SIL      Urazil          Sao Pauo Water Ouality
62C6       LAC         1996      VWR       RWSS        SIM         via       | Rural Wlatet aqd Senitation
43420        LAG        1998       WU       UWSS        SIL       Brazil         Second Water Modernization
3507       EAP         1996       PH       HYDRO       SIL      China           Ertan Hydro II
39983       LAC         1998       WR       RWSS        SIL       Paraguay       Fourth Rural Water Supply and Sanitation
49166        MNA        1998       AY       ID          SIL       Jordan         TAforAgriculcural
35076       AFR         1998       Pff      HYDRO       SIL       Zambia         Power Rehabilitation Project
6052       LAC         1997       WY       FM          SIL      Argentina       Flood Protection
50646       SAR         1999       AY       ID          SIL      India           Uttar Pradesh Sodic Lands Reclamation 11
39281       SAR         1996       PH       HYDRO       SIL       Pakistan       Ghazi Barotha Hydropower
10453       SAR         1994       VI       WSM         SIL       Pakistan       NWFP Community Infrastructure
10482       SAR         1996      Al        ID          S1i       Pakistan       Balochistan Com Irrig Agr
1012       AFR         1999                UWSS        SIL      Guinea-Bissau  Water and Energy Project
1750       AFR         1997       UU       WRM         Sit.     Ma i            Urban Develpment and Decentralization
1921       AFR         1998      WW        ENV     i   SIll     Mauritius    i Environmental Sewerage and Sanitation
5173       MNA         1995       Al       ID          SIL      Morocco         Rural Water Supply and Sanitation
3241       AFR         1995       WU       UWSS        SIL      Zambia          Urban Restructuring and Waler Supply
33965       ECA         1998       VP       ENV         SIL       Bulgaria       Environmental Flemediation Pilot
8051       LAG         1995       WU       UWSS        Si8       Peru           Lima Water Rehabilitation
7,                                          __ ___
70



Annexes
Comprehensive management               Institutional development            Economic and social issues
Lgegl and policy   MeZnagement and
regulation
3   3   NA   3         3.5      3         3        3         3    1   2         2        1.5~~~~~~~~~~~~~~~* (A 1 
3           D      3        4o 4               D     |
3        3        NA        35       N/R       3        3NR       3         3        2         4        3
3        D        N/ 3      N/R 3     3.5/ 3 3                         3         3   2/ 24.
3        3.       3.5/      3        N/D       2.5      N/D       3         3        3         3 D       /
3        3. 3D N/R             23              2.5ND     3        3/        35       35        35       3
3        3.5/      35       35        35       N/R       3        3/    !  NA        2         2        3
3        4 N/D     N/D         2  E  N/D       3         4        3 NO 2    4        2         4        4
3                  3/       3        ND        3        ND 2.5              3        3        2         4
3        3        ND        35       N/3       3            3.5   3         3        2        2         3
3         D       N/D       3         3.5      3        N/3       3         3        2         2        4
3        3        3.5       3        N/R       2        N/fl      3         3        3D                 N/D
3        3   N/R        3        3    25       2.5N      3        3/D 3              3         3        3
3    :3N/D         35      3.         3.5      NAR       3        3         DN       2         2        3
3       N/D       ND        24            N/D  3         4        2                  2         2        4
3        0 N/      3 D      3         0        3        N/f       2                  3         3        4
3       N/        N/D       4        N/D      N         N/D      34         3        3         3        4
3       N/        N/D       2        N/D       3        NfD       2         3 4      4         3        4
3        N/R      N/        3         3 N/R    0        N/    R       N/D    3                2 3  3  3N 
3        0        N/R        5 3      N/R      4        N/R       3         3        3         3       N
3        N/R      N/        3          3/R    N/f        3       N/f        3        3         3        4
3       N/R        3        3         3       N/R D      2       N/flD      3        3         2        3
3       N/fl      N/fl      2        N/fl       2    IN/fl        2         4        4         4        4
3       N/fl      N/fl     3.        N/fl      4        2.5                 4        4         2.       4
3       N/R       N/Rf      3                  3N/f  N/fl /R l    3         3        3         3        3
3       N/fl      N/fl      25    .Nf     N/    fl3     N/fl      3         4        3.4       3        4
3        N/flR         N/      fl 3       N/    fl  3        N/R  3         3Nf     N/f       24       N/fl
3        N/fl     3/        3         N/fl     2.       N/fl      3        N/f       3         3        3
3    1N/f         N/fl      2       N/fl       3        N/fl      3    3    4.            3         3   4
3    INA          NA       2.5        NA       NA       N3        NA        NA       3.5      3.5       NA
3       N/R        2        3         2        D         1        3         3        4         4        4
___________________________  I  {  __________________  (continiues  on  following  page)
71



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Water Policy Analysis: Compliance with
Table D.2          W a t e r Policy       According         to   the   9-Cell Water
Policy Matrix (continued)
i~ ~   ~~~~~                 Brzi iii 3r4 i4        ri
=S~~~~~~~~~~U&                         Pargua         ii w.':1
9093                                                                          Vi -.1 I I.ST   -  II  II",  " ' 'ii  ' i 1  ii  :
6541~~~~~~~~~~~S                        Ivaai       ''I:.  'eq ii i: lil p 4 Ill
7926~~~~~~~~~~~~N                       Uga nd  2   l   i s,. i i'4 i.
9093   3 X                          s~~~~~~~~~L  SriLak  !1  ii;': K  ":1 ,. U .  1' ,,p , "I  1w : |. 11,
1667 _UI l< qlll|ll llxl
34212                                                           :   l      
6010            Argentina   ,. 'ItI *:r a  \ l[Iti: Al !i  '  I  i 1:,,I
973~~~~~~~~~~~~W'                       Ghana :    |iJlJ p4 ii. ji ] Ir  & rzl 1|
2669                                                        r    -   l
924                                                         q u im ;ItII II:  1: 4 !.R ., h, a  ';ie\'i
8 60                                                       ''I I,4 w |  I Li  l |1  1 4ri.l ,IW   ;   1 I
121                              s~~~~~~~~~~U-'  Alai  ..:'" ;'. ..: ~I. rI' '1*!$h :1-,
45303                                                        g   :-    l   -
99641            199            RW&             Bn            K|. , :1 ";u !< 1.1 4; CI a':ii'i . i i..
39455                             s                               ! |  ' e.,1 l.:  ,,1  -I :, W  1l^ it- t.1. it 1i ., 'al  U*I  I ,
3586             19                               i' Ir.i,4.:i    .  'I a   IT .:  I
35g8                             s~~~~~~US  Gergi   *uu r.'E1,1,, s,c,' 1 . in 
10476                                                         I.;:   r-
10529                                                        F 'ari i:i a          .
34584                                                      K   .   I   ass's  '  i
8553                                        I                 I      I"i ts'.i-
4613                                      t   l    parmtL" ........s8 1e4m *J 
9121 I '. : '  l l l . I 
8778 §Ii-: -i- I. 
8277                            rT S      L      r              - 1  I,, I I II.;*;i I
37006 ...II Elk
I  .J      s.cr.snid
72



Annexes
Comprehensive mainagement                   Institutional development                 Economic and social issues
Legal and policy      Management an 
regulation
U.
e,   9   -  X   g     a         a       e  e  5     $  X ~~~~~~~~~~Ica .Y .,=1 
=                                       a~~~~~~~~~~ 
3         N/R         3         3          4        N/R         3         N/R        N/R        2          3          3
3         N/R         3       N/R          3        N/R        N/R        N/R        N/R       N/R        N/R       N/R
3     I   N/R        D          3         N/D        2          2        N/D          2    .    1          2          1
2.9        2          2         3           3         3          3         3           3         3          3         2
2.9    1   3          3         3      1   2.5        3          3         3          3.5       3.5         3         2.5
2.8    |   3         N/D        3           3         3          3         3          2.5        3         2 5        2.5
2.8       N/fl        3         3          N/R       2.5        NIR        2.5    '    /R       N/R        N/R        D
2.8        N/D        2.5       3           0        N/D         3        N/D          4         3         N/D        2
2.8    I  N/D        N/D        2          N/D       2.5         2         3      j    4         3          4         3
2.7       N/R        N/D        2 5        N/R        3         N/R        3      I   N/R   !    3         2.5        3
2.7   1'  N/R        N/D        2.5        N/R        3         N/R        3           3        2.5        2.5        D
2.7    I  N/R        N/R        3      !   N/R        3         N/R       N/O         2.5        3          3         3
2.6        2          2         3           2         2          3         3          2.5        2         2.5        3
2.6       N/R        N/R        3      i   N/R        3     j   N/R        D      |   2.5        3          3         2.5
2.5        2          2         3           2         2     ,    2         2           2         2          2         2
2.5        2          D         3           2        N/D         3        N/D     I    2         1          1        N/D
2.5        2         N/R        3      '    2        N/R         3                    N/R       N/D        N/R       N/R
2.5        2 5        2.5       3          N/D        3         N/D        3      |    3         3         2 5        1
2.5        3          3         3 5        N/D        3     ,   N/D        3.5        2.5   i   2 5         3         2
2.5   ,1   3          3         3           2         2          3          3          3        2.5         3         2
2.5        3          3         2.5        2.5       2.5    !    3         3           3        2.5         2         2
2.5    1   3          3         2           D         3          2         3           3         1          2         2
2.5        3          3         2           D        N/D         2         2           3         1          2         3
2.5        3          3        2 S         2.5        3          3         3           3    j    3          3         2.5
2.5        3          3         2 5        2.5       NA          3         2.5         2    j    3         2.5        2.5
2.5        3          3         3           2        3.5         3         3           3         1          2         2
2-5   jl   3          3         3          2.5       2.5        2.5        2.5    1   2.5       2.5        2 5        2
2.5        3         N/R        3           2         2     1    3         3           3         3          3         2
2.5        3          NA        3           2         2         3.5        3.5        3.5       3.5         2          1
,   g                     I~~~~~~~~~~~~~~~~~~~~~~~~~~~~U
2.5    |   4         N/D       N/R         N/D        3          3         3          2.5        2         2.5       N/D
I                               1                                          1_      _      loontm(losonfolmowionsn l gp
73



Bridging Troubled Waters Assessing the World Bank Water Resources Strategy
A,
Table       D.2                                                  *'
:                                                            a)' 
i ~        ~~~~~~                                  S
o          .0                              .0 _                    = S     1
6436       LAC         1995       UM       WRM         SIL      Brazil         Ceara (WRM compon.)
5680       MNA         1995       VM       UWSS        SIL      Yemen          Southern Govemorates Rural Development Project
5342       MNA         1997       WS       UWSS        SIL      Jordan         Amman Water Sanitation Management
5344       MNA         1994       Al       ID          SIL   I   Morocco       Sewerage and Water Reuse
7020       LAC         1995       Al       ID          SIM      Dominican
Republic       Irrigation Land and Watershed
43728       SAR         1997       VI       ENV         SIL      India           Environment Capacity Building TA
8224       LAC         1996       WW       UWSS        SIL      Venezuela       Monogas Water
3493       EAP         1995       TP       NAV         SIL      China           Inland Waterways
48521        MNA        1999       WW       UWSS        SIL       Egypt          Irrigation Improvement Project
35158       SAR         1997       Al       ID          SIL      India           Third Andhra Pradesh Irrigation
49385        SAR        1998       SY       ID          SIL      India           Andhra Pradesh Economic Restructuring
34617       AFR         1996       PH       HYDRO       SIL       Mali           Selingue Power Rehabilitation
4576       EAP         1998       WY       UWSS        SIL      Philippines    Water District Development
3595       EAP         1994       AP       WSM         SIL      China           Second Red Soils II Development
35802        ECA        1999      IUU       UWSS        SIL       Lithuania      Municipal Development
1994       AFR     !   1995       Al       ID          SIL      Niger          Pilot Private Irrigation Promotion
5902       MNA         1998       AA       ID          SIL      Tunisia        Water Supply and Sewerage
2957       AFR         1994       WU       UWSS        SIL       Uganda         Small Town Water
35728       LAC         1998       VM       WRM         SIL       Brazil         Bahia Water Resource Management
54667       LAC         1998       TU       FM          ERL      Peru            El Nino Emergency
1564       AFR         1998      WR        RWSS        SIL      Madagascar     Rural Water Sector Pilot
1738       AFR         1997      Al        ID          SIL      Mali           Pilot Private Irrigation Promotion
961       AFR         1994       AM       ID          SIL      Ghana          Agricultural Sector Investment
7607       LAC         1995   j   Al       ID          SIL       Mexico         Rainfed Areas Development
7257       LAC         1994       WU       UWSS        SIM       Guyana         Guyana Water Sector TA and Rehab
44942        ECA        1997       WR       UWSS        SIL       Uzbekistan     Pilot Water Supply Engineering
4207       EAP         1994       SA       RWSS        SIL       Laos           Luang Namtha Provincial Development
4974       MNA         1994       WU       UWSS        SIM      Algeria        Water Supply and Sewerage
10522       SAR         1995       Al       ID          SIM      India          Asam Rural Infrastructure
48522        MNA        1997       AA       FM          ERL       Lebanon        Irrigation Rehabilitation and Modernization
74



Annexes
Comprehensive management ,             nstituttonal development  iEconomic and social issues
i    regulation
E0       ,                  F        EX                                    i 
*  ,-                  C)~~~~~~~~~~~0-C
2.5   ,            3        2         2        2        3        3         2        2        2        3
2.5   ,   D        3        3        N/D      N/R       1       N/Rf      N/R       3       N/R       4
2.5       D        0        3        N/D       D       N/R       3         4        2        3        1
2.5       D        D        4        N/R       D       N/R       D         2        4        3        1
2.5'      D       N/D       4        N/D      N/D      N/D       2.5       3        2        2.5      4
2.5      N/D       3       N/Rf       3       N/R   ,   3       N/R   I   N/Rf      2        1       N/R
2.5      N/D       3        1         2        3       N/D       4                                    3
2.5      N/D      N/D      2.5       N/R      N/Rf     N/R       3        N/R   .   3        3       N/R
2.5      N/D      N/U  N/        |   N/U                2       N/D        3        1        1        2
2.5      N/D      N/D       2        N/D      N/D       1       N/D        2        1        1        4
2.5      N/D      N/D       3        N/D      N/Rf!     1       N/Rf       3        1        3        4
2.5   'N/D        N/D      N/R       N/R       3       N/R       3        2.5      2.5       3       N/R
2.5      N/D      N/O       3        N/D       3        D        4         2        2        2       N/O
2.5      N/R      N/R       3        N/R       3       N/R       3        2.5       3        3.5      2
2.5      N/R      N/R       3        N/R      N/R   '   3       N/R       N/R      N/R      N/R       2
2.5      N/R      N/R      2.5      N/fR      DU       N/R       2.5       2        2        2        2.5
2.5      N/R      N/R       2    j   N/R       U       N/D      N/D        2        4        3        3
2.5      NIR      N/R      N/D       N/R      2.5      N/R      2.5   '   2.5      2.5      2.5      2.5
2.5      N/D       3        2         2.       2        3        3         2    '   1        1        3
2.5      N/R      N/D       3        N/D      N/Rf      3       N/Rf      N/D       1        1        4
2.4     UD        N/D       2        N/R      2.5      N/fR      2.5      2.5      2.5       2        2
2.3      N/R      N/D       D        N/R       3       N/R       2.5       3        2        2.5      2
2.3      N/R      N/R      2.5   '   N/R      2.5      N/R      N/U       2.5       3        3        2.5
2.3      N/D      N/U       2    j   N/D      N/D      N/D      N/D        3        2       N/U       3
2    ,   1         1       2         1       N/D        1      N/D        3        2         3       2
2        2         2       3         2        2        2        2         2        3         3       2
2        3         3       3        N/D       2       N/D       2         2        2         2        3
2        U         3       3        N/U       2        3         2        3        2         2        1
2        D         D       4        N/D      N/D      N/D       N/DU      2        1         1        4
2        U         U       2        N/D       U        2       N/U        2        2         2        1
I_________________________  i  I contlnues on  following page)
75



Bridging    Troubled    Waters: Assessing         the World     Bank Water Resources Strategy
Table        D.2         *l
.    t;                                                    r=t
1~                      ~~~~~~~~~~~ II 1
.2  ~   ~    I2-
*      _     )                1   0                                    C= e*
10467        SAR         1995       US        UWSS        SIL        Sri Lanka       Colombo Env Improvement
1967        AFR         1996       VM        WRM         SIL        Niger          Natural Resources Management
6894        LAC         1996       WW        UWSS         SIM       Colombia        Bogata/Santafe WSS Rehab
1331        AFR         1996       AL        ID          SIL        Kenya          Arid Land Resource Management
1522        AFR         1995       Al        ID          SIL        Madagascar     Second Irrigation Rehabilitation
9482        SAR         1997       WU        UWSS         SIL       Bangladesh     Fourth Dhaka Water Supply
55974        LAC         1998       TU        FM           ERL       Bolivia         El Nino Emergency
3985        EAP         1994       VM        WSM          SIL      Indonesia        National Watershed Conservation
5521        MNA         1998       Al        WRM         SIL        Yemen           Second Public Works
3937        EAP         1994       Al        ID       i  SIL       Indonesia        Integrated Swamps Development
5321        MNA         1995       Al        WRM         SIL        Yemen           Emergency Flood Rehabilitation
50418        MNA         1998       AY        ID          SIL        Tunisia         Agricultural Sector Investment Loan
5721        MNA         1994       Al        ID          SIM        Egypt          East Delta Agr Serv
5503        MNA         1996                IUWSS         SIL       Tunisia         Second Agricultural Sector Investment Loan
43367        MNA         1997       WU        UWSS         SIL       Yemen           Sana'a Water Supply Sanitation
6541        LAC         1993       WY        UWSS         SIL       Brazil          Parana Water Quality & Pollution Control
10461        SAR         1995       WU        UWSS        SIL       India           Madras Water Supply _I
76



Annexes
iComprehensive management               Institutional development           Economic and social issues
regulation
_~~~~~~                                         ~             ~          ~~~~~~~~~~ m.nl 
2        0       I.
I                                                                                         co
2        0         D       2.5       N/D      N/D   'N/D         2        2.5       3        2.5       1
2        D        N/D       2        N/R       3    'N/R         3        N/R      2.5       2.5       3
2       N/IR       D        2         D        D        0        D         4        4         4        2
2       N/R       N/D      2.5       N/R      N/D      N/R      N/D       N/R      N/D       N/R       3
2       N/R    'N/D         2        N/R      N/D      N/R       2         2        1.5       2        1
2       N/R       N/R       3        N/R       U       N/R       2         2        2         2        2
2       N/Rf      N/R      DU        N/D      N/D      N/R      N/R   N|    D       0        N/fR      3
2       N/R       N/R       3         1        2        1        2        N/Rf      2        N/R       2
2       N/R       N/R       2        N/R      N/D      N/R      N/     |   2        2         1        4
1.5       2         2       3          2       3         2        3    '   1.5       3        2         1
1.5       3        D        2         N/R     N/R       N/D      N/fl      N/R       1        1         1
1.5       D       N/D       2         N/D     N/D       N/D      N/D        2        1        2         1
1.5      N/D      N/D       I         N/U     N/Rf      N/D      N/U        2        1        1        3
1.5      N/U      N/D       2         N/D     N/D        2       N/D        3        1        1         1
1.5      N/U       N/D      1          3      N/D       N/D       U         3        1        1         1
1.5      N/R        2       1          3       3         3        3         D        3        2         1
1      UD         U         1        N/D      N/U      N/D      N/U        U D      3         3        2
77






ANNEX E: SOCIAL DEVELOPMENT DIMENSIONS OF BANK-FINANCED
WATER SECTOR PROJECTS
Objectives                                Methodology
The Social Assessment Team (SAT) within the  To estimate the changes brought about by the
Social Development Policy Cluster collaborated  Bank's 1993 water Strategy, a stratified random
with Operations Evaluation Department (OED)  sample was clrawn from the whole cohort of
to analyze the extent to which Bank-financed  Bank water projects. Stratification involved select-
water sector projects focus on poverty and social ing samples until each subsector had the same
development issues. Given the explicit attention  relative proportion of projects in the Bank port-
paid to social development issues in the 1993  folio. No attempt was made to stratify to ensure
World Bank Water Resources Management matching regional representation. Two sets of
(WRM) Policy, the review focuses on a com-  sample were clrawn, one representing projects
parison of samples from pre- and post-1993  approved in the pre-policy period, 1988-93,
water sector projects. The comparison of the pre-  and one for the post-policy period, 1994-99.
and post-policy projects aims to establish the  Each project selected was then extensively ana-
extent to which progress has been made with  lyzeci by a team of researchers according to the
respect to these issues and the areas that require  variable listed in table 2 and database. It is
further improvements. In so doing, urban and  important to note that quality assessment of
rural water supply and sanitation, irrigation, and  poverty/social analyses included in SARs/PADs
other water resources management project doc-  was not a part of the stock-taking exercise. No
uments were reviewed. In addition, water sec-  qualitative indicators are thus in the database.
tor projects that were subjected to a quality  Also, a large number of poverty-focused projects
review by the Quality Assurance Group (QAG)  do not provide sufficiently informing analyses
were also identified and analyzed for their social of poverty, its impact, or of social issues. Nor is
development aspects.                      there an adequate treatment of institutional
arrangements to bring about targeted changes.
Approach                                  A great deal of what would otherwise be con-
The analyses relied solely on Project Appraisal  sidered as "basic minimum information" is not
Documents (PADs) and Staff Appraisal Reports  consistently provided. For instance, the numbers
(SARs) for analysis of the project. To this end,  of direct/indirect beneficiaries and directly/indi-
a comprehensive social development database  rectly affected populations are missing from
(SDD) was created. The database consists of sec-  many documents.
tions on the poverty focus of the project, key
social issues identified in the project document,  Poverty and Social Development Focus
stakeholders involved in the design and imple-  Several indicators were used to characterize the
mentation stages of the project, participation of  poverty focus of water sector projects. The first
the poor in project design and implementation,  was based on the formal determination made by
social studies completed for the project design,  the project team, often noted on the first page
applicability of resettlement issues to the proj-  of a project document. Generally, the formal
ect, and the availability of monitoring systems,  poverty applicability of a project is defined by
with an emphasis on social impact monitoring. whether the project targets specific groups within
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Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
its components. If no specific targeting is done,  consideration of poverty impacts (52 percent
then the project is categorized as "Poverty: Not  pre- to 63 percent post-1993), and establish-
Applicable." According to this indicator, 42 per-  ing institutional mechanisms to target the
cent of the water sector projects completed after  poor (23 percent pre- to 53 percent post-
1993 targeted poverty. This indicator was not  1993) and to monitor poverty impacts (16 per-
used in a majority of the pre-1993 projects; the  cent pre- to 46 percent post-1993).
Bank did not have a policy to address poverty  * Involving gender dimensions has become an
applicability in project summaries.         integral part of the water sector, particularly
To cope with the problem of defining poverty  in the water and sanitation subsector. Gen-
focus in a consistent manner in water sector proj-  der and other social groups are less of a con-
ects, the SA team developed a less stringent  cern in other subsectors. As accepted in the
definition of poverty focus. According to this def-  Dublin Statement and reiterated in The Hague
inition, if a project involved an analysis of  Water Forum 2000, women play a central
poverty issues in project regions, made provi-  role in all aspects of water. Among the proj-
sions for rehabilitating poverty in project regions,  ects reviewed, gender is addressed in 30 per-
or analyzed the poverty impacts in project areas,  cent of the pre-1993 projects, but only 54
it was considered poverty focused. The quality  percent of the post-1993 projects. The num-
of the poverty focus and targeting of poor peo-  ber of projects that involved an NGO spe-
ple were not judged; rather, the project was  cializing in gender at the appraisal doubled
deemed poverty focused if it had one or more  from 8 percent to 19 percent from one period
of the elements of focusing on poverty levels of  to the other.
people in project areas. Throughout the report,  * As the Bank has focused more on community-
comparisons between poverty-focused and non-  driven approaches, projects that involve com-
poverty projects are based on these less strin-  munity participation have nearly doubled
gent criteria.                              over the past 12 years. Forty-four percent of
the projects completed prior to, and 67 per-
Main Findings                               cent of the projects completed after, 1993
Water projects have a significant, but not uni-  consider community participation issues and
versal, focus on poverty. In comparing the pre-  can be considered CDD projects.
and post-policy periods, an increased focus on  * The focus on distribution issues and equity,
social development and poverty concerns in  while remaining at a modest level, quadru-
project appraisals is evident. Participation of the  pled from one period to the other.
poor, gender issues, and evaluation of social cap-
ital constitute a greater focus of social develop-  There are systematic project characteristics
ment concems mentioned in project documents, that account for differences -in poverty/
and this was increasingly evident in the projects  social development focus.
completed after 1993. As such, the main findings  * IDA projects are more likely to target poverty,
of the study can be summarized as follows:  have a higher share of Bank financing, and
a higher level of partnerships compared to
There is a growing emphasis in integrating  IBRD projects. IDA projects also have greater
poverty and social development issues in    poverty focus than IBRD-financed projects,
Bank-financed water sector projects, partic-  both prior to and after 1993.
ularly after the adoption of the Bank's 1993  * Projects with smaller financing (in dollar
Water Resources Management policy paper.    terms) have a sharper poverty focus; both pre-
* The focus on poverty increased from 57 per-  and post-policy projects show that where the
cent prior to 1993 to 63 percent after 1993.  Bank invests large sums, it tends to ignore
The poverty focus was enhanced through an  poverty/social development issues.
increase in conducting poverty analysis (36  * It appears that the Bank has achieved greater
percent pre- to 53 percent post-1993), better  cost-effectiveness in its water sector invest-
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Annexes
ments. Per beneficiary costs of projects  Even though 38 percent of the projects used
decreased for both poverty-focused and non-  the "four-pillar approach" in their social
poverty projects after 1993. However, per  assessments, this number is nearly doubled
beneficiary costs of poverty-focused projects  in the community-driven water sector
are still higher than are others.       projects.
Partnerships with other donors have come to  * Social analysis: There was a remarkable
enhance the Bank's poverty/social develop-  increase in use of participatory methods to
ment focus. Especially during the post-policy  address social development concerns. For
period, 74 percent of the projects prepared  instance, use of broad-based stakeholder con-
with other donors are poverty-focused. There  sultations more than doubled from one period
is also a clear increase in the participation of  to the other, together with qualitative bene-
NGOs and civil society organizations in proj-  ficiary assessments and direct consultations
ect implementation in poverty-focused proj-  with the poor.
ects; non-poverty projects have low levels of  * Participation: There was an increase in com-
civil society participation in implementation.  munity participation and consultations with
An analysis of private sector institutions was  the poor in both project appraisal and proj-
included in only 30 percent of pre- and 37  ect implementation during the post-1993
percent of post-1993 projects.            period (for example, community participation
* The sample size is insufficient to make   in appraisal increased from 30 percent to 61
regional comparisons. There are indications  percent).' Household and nonhousehold user
that the Southeast Asia Region projects have  as well as community participation in project
a more consistent emphasis on poverty and  financing also increased in the post-1993
social development dimensions. However, a  period (26 percent of projects pre-1993, and
separate analysis of Middle East/North Africa  38 percent post-1993); average contributions
(MNA) Region projects, undertaken at the  were $4.44 million in pre-1993 and $5.3 mil-
request of the Global Water Unit (GWU) as  lion after 1993.
part of a larger quality review process, looked  * Institutional analysis: Both prior to and after
into social development aspects of MNA water  1993, most projects involved analyses of tech-
sector projects. This analysis shows that a  nical institutions, municipal water systems, and
somewhat larger than average number of    local government institutions. However, social
these projects also had a focus on poverty and  and informal private institution analyses are
social development issues. Details of this  much less common.
analysis can also be found in the report.  * Social Impact Monitoring (SIM) is in place in
* Of the projects completed after 1993, reset-  49 percent of the post-1993 projects and the
tlement was considered in 68 percent of the  vast majority of these had a focus on social
projects, and 41 percent of all projects had a  development issues. This reflects a significant
resettlement action plan (RAP) available in  improvement in addressing these issues when
their PAD/SAR. This contrasts sharply with the  compared with the pre-1993 data, in which
pre-1993 data that reflected consideration of  only 30 percent of projects show SIM in place
resettlement in only 34 percent of the proj-  and of these, only a few have a focus on social
ects and RAPs in only 19 percent.         development issues.
* Cultural property issues are considered in
fewer than 10 percent of all projects; most of  Lessons Learned and Areas for Further
these involve resettlement.            Improvement: A Summary
* Indigenous peoples are considered in close  Policy matters. There have been major
to 20 percent of the projects after 1993; most improvements in the pro-poor emphasis of
of these involve resettlement. While this per-  Bank-financed water projects since the 1993
centage is low, it nearly doubled in compar-  WRM policy paper across a wide variety of
ison with the pre-1993 period.          dimensions, such as poverty analysis, direct
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Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
participation of the poor in projects, attention to  opment focus. The quality of poverty and
gender, assisting client institutions to target  social analyses is of particular concern for the
poverty groups, and the like. While the data indi-  projects that lend large sums for water sec-
cate an overwhelming change in the social   tor investments.
dimensions of water resource management proj-  * There is substantial room for improvement in
ects since 1993, they also indicate areas where  the quality of poverty analyses incorporated
enhanced attention to a more consistent main-  in water sector projects; a more detailed
streaming of poverty and social sustainability  evaluation that would assess both documen-
would improve the Bank's contribution to the  tation and results on the ground would be
holistic WRM policy that is the consensus of the  needed to better specify areas for quality
international community.                    improvement.
Analysis of gender issues, often formulated
Partnershipwithotherdevelopmentagencies     within the framework of poverty and/or
enhances the Bank's focus on poverty and    exclusionary policies for service delivery, has
social development; further emphases on     been integrated into the design of many proj-
partnership matters: Partnership in designing  ects; but attention to gender is seldom trans-
and cofinancing projects with other donors helps  lated into action or monitored.
the Bank to sharpen its social development/  * The focus of social analysis of water projects
poverty focus in water resource projects. This find-  is relatively narrow. Most projects incorporate
ing suggests that the Bank would benefit from  a focus on one or another social issue, and
improved partnership with other donors and civil  a holistic social assessment is missing from the
society organizations in future WRM projects.  majority of projects. Some key issues, such as
water rights, are largely neglected, but require
Pro-poor/pro-social focus and its quality   future focus, especially as they relate to
can be enhanced.                            poverty.
• There is substantial room for improvement of  * The low level of poverty/ social monitoring
priority-setting in targeting the poor and vul-  and evaluation (M&E), especially impact mon-
nerable populations within water sector proj-  itoring, incorporated in water sector projects
ects. Many projects provide a relatively  is a serious concern and mirrors the findings
superficial analyses of poverty, its social  for Bank projects in other sectors. Measuring
dimensions, and specific measures for its alle-  impact, monitoring implementation, and pro-
viation through water sector interventions.  moting a culture of continuous learning can
* Since IBRD-financed projects do not have as  only be done through improved M&E, both
much of a focus on poverty and social issues  in client institutions and in the Bank itself. The
as IDA projects, there is scope for improve-  recommendations of the Bankwide task force
ment of water resource project objectives in  on M&E should be implemented without
countries with higher income levels.      delay in water resource management units.
* The per beneficiary cost of poverty-focused
projects continues to be higher than non-  Projects increasingly show that participation
poverty projects, suggesting the Bank can  is more than a tool for cost recovery, it is
sharpen its skills to deliver assistance to the  also a mechanism for promoting stake-
poor more efficiently.                  holder involvement and community-driven
* Urban water supply and sanitation projects  (CDD) initiatives. There is particular need to
can sharpen their poverty focus to catch up  formulate CDD approaches to WRM.
with the greater progress made in this area  The greater the share that communities and
by water projects in agriculture and water  households contribute to project financing, the
resource management generally.          greater responsibility they take with respect to
* Larger projects (measured in dollar terms)  operations and maintenance There have been
can improve their poverty and social devel- increases in the frequency of consultations
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Annexes
directly with the poor and/or with civil society  tor learning efforts of the World Bank Institute
organizations for project design, and in NGO  (WBI). The learning programs in the Social
involvement in implementation. However, the  Development family also place little emphasis
data also suggest that decentralized and/or sub-  on the water sector, and the SD literature insuf-
regional projects are not consistently more  ficiently exemplifies how a broad range of social
poverty focused. Since communities are not  issues play key roles in the design and imple-
monolithic entities and they respond to micro-  mentation of water sector projects. Therefore, the
level socioeconomic characteristics, a closer  water-sector-related learning exercises and client
examination of poverty focus in decentralized  capacity building efforts of WBI might consider
projects might be needed. Full community own-  giving more attention to poverty and social
ership is yet to be evidenced in the Bank-  development. The Social Development family
financed projects2 and is an area for future focus,  may likewise sharpen its skills to further improve
with particular attention to the institutional  the quality of social assessments of water sec-
aspects.                                   tor projects.
The water sector compares favorably in its  There is a need to incorporate a more sys-
social development focus with other sec-   tematic, quantified, and well-documented
tors. Given this strong start, social analyses  approach to social assessment in water sec-
of water sector projects can be broadened.  tor projects.
Pro-poor projects are also pro-social; they con-  Learning about peoples' actual behavior and
cern themselves more with social dimensions of  opinions in a continuous fashion is essential to
development. Inclusion of a focus on one ele-  ensuring that project objectives are relevant to
ment of social sustainability generates focus on  people's needs, and that project implementation
other aspects and opens doors for other social  takes account of local realities. The water sec-
considerations. Water sector projects are highly  tor projects that are included in this analysis have
variable in their treatment of social issues: not  not only a narrow treatment of the behavioral
all incorporate holistic consideration of social,  and social structural elements, but provide lit-
environmental, and economic objectives, not  tle evidence that an in-depth knowledge has
all use social analysis or aim to maximize sus-  been acquired. Indeed, only a small percentage
tained stakeholder participation. Experience  of the analyzed projects have all elements of the
indicates that the inadequate social and politi-  World Bank's four-pillar approach to social
cal analysis of watersheds and river basins may  assessment in place, including; (i) social analy-
result in the domin'ance of power groups in key  sis; (ii) participation; (iii) institutional analysis;
decisions. Landless farmers, pastoralists, small-  and (iv) impact monitoring. Rather, projects doc-
holders, and minority communities have little  uments suggest that social assessment is deferred
voice in planning and tend to get further ma'r- to the implementation stage without specific
ginalized in implementation.               budget allocation. The findings of the Quality
In Bank project appraisal, poverty, participa-  Assurance Group also show that a holistic inte-
tion, and gender are more frequently addressed  gration of social development concerns lags
than other social issues. Of the safeguard poli-  behind the performance of other quality con-
cies, resettlement receives a more routine con-  cerns (economic, financial, and technical),
sideration than indigenous populations and  despite the indication that the water sector per-
cultural heritage. Issues relating to equity, eth-  forms better than others in its treatment of
nic and tribal concerns, and those concerning  poverty and social issues.
water rights and their poverty/social impacts  The analyses show that CDD projects are
do not receive the attention they deserve. The  more systematic in being built on organized
limited treatment of social development issues  social assessment than projects with a more
within the water sector is apparent in Bank-  centralized design. Indeed, CDD projects have
produced publications, as well as in water sec-  a visibly broader treatment of social development
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Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
issues and tend to monitor progress with respect These are among the many concerns that are
to these more often than other projects.  inadequately addressed by many water sector
Needless to say, as the focus on WRM, inte-  projects.
grated river basin, and watershed management
increases, the need for a better understanding  There is room to further enhance stake-
of human activities that affect these will also. Co-  holder involvement, especially of commu-
existing social structures and the historical pat-  nities and the informal sector.
terns of their interrelationships are particularly  Water sector projects continue to place their
needed as watershed boundaries and politi- institutional focus on the formal state and/or
cal/administrative boundaries diverge, the num-  municipal agencies. Other suppliers of water, the
ber and diversity of stakeholders become more  providers of goods and services for water qual-
complex, and as the design of incentives with  ity enhancement, including the informal sector,
respect to soil erosion, waterlogging, salinization,  have received less comprehensive attention. An
flood runoff, and so forth, become critical.  accurate understanding of all uses of water and
While technical information needs become  establishing an appropriate stakeholder partic-
more relevant in establishing aquatic resources, ipation process also require knowledge of local
providing this information to the people whose  social systems. While community involvement is
activities affect these resources becomes more  a more common feature of rural water supply
challenging. Yet human societies are dynamic  and low-cost urban sanitation projects, the
and their information and communications struc-  modalities of community involvement in river
tures require careful assessment, which is con-  basin and/or groundwater management are less
sistently lacking in the water sector projects.  well described except in cases where water for
a single urban community is to be imported
There is room for a better understanding of  from one or two rural communities. Even in these
behaviors, attitudes, informal rules, and  cases, there is more concern with the supply of
local modifications of formal laws.       water than with the quality of water resources
A large number of social analyses are based  management. Indeed, there is remarkably little
primarily on secondary data and qualitative  emphasis on the social dimensions of water
observations. A deeper understanding of behav-  quality management in WRM projects. This is an
ioral and attitudinal patterns as displayed by  area where an accurate understanding of rele-
different socioeconomic and water user groups  vant patterns of behavior, values, and social
could substantially improve the design and  institutions would substantially contribute to the
implementation of WRM projects. How do large-  formulation of quality and quantity enhancement
scale investments impact landlords, smallholders,  strategies that would involve local communities.
and the landless? How do the marginal groups
cope with forces that may force their displace-  There is room to involve the local, small-
ment? Who are the full range of stakeholders, for- scale, and informal private sector.
mal and informal suppliers and users of water?  Despite consistent and continued emphasis on
What could be the modality of community par-  private sector development, the current defi-
ticipation in large-scale river basin management?  ciencies in the operation of this sector and the
Who are the key stakeholders in groundwater  requirements for improvement are less well doc-
management? The relevant inquiries can benefit umented. Equally important, insufficient atten-
from greater analytical focus on the institutions  tion is given to the small-scale and informal
as defined as the "rules of the game." These insti-  private sector and the incentives that would be
tutions also influence information/communica-  needed to build the capacity of local private ini-
tion structures, as do values, attitudes, and  tiatives. Indeed, it appears that "the private sec-
culture. To the extent that information is a basic tor" is largely associated with large-scale private
requirement for informed stakeholders, this has  firms and, often, international concerns, and
to be provided in a timely and effective way.  the question of how to build on the efforts of
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Annexes
existing informal and small-scale private initia-  ects. If water sector projects are to face gender
tives is not pursued; nor is a description of their issues in project communities and to utilize
activities provided. This goes hand-in-hand with  them effectively for successful implementation,
the lack of a behavioral focus on coping strate-  then they need to pay increasing attention to the
gies or an attempt to understand how users  following issues:
meet their needs when governmental institutions  * It Is important to carry out social analysis
fail to do so.                              for better understanding of gender issues.
Since water has both domestic and productive
There is need to further debate social safety  uses, deciphering existing behaviors and mech-
arrangements and cost recovery issues with  anisms is integral to examining equity between
respect to poor groups and/or communities.  men and women with respect to access to and
There is an increasing recognition within the  use of water. Detailed social analysis, with a
international community that full cost recovery  focus on interactions among community mem-
in water sector projects may not always be fea-  bers and their behavioral pattems and disag-
sible. In infrastructure and irrigation projects, it  gregated by age and gender, therefore, is the
is reasonable to assume that at least part of the  most important prerequisite for systematic
target population will not be willing or will not  consideration of gender issues.4
have the capacity to pay for water. For instance,  * Women's participation can be increased
there are communities with depleted under-  in all phases of the project cycle through
ground resources to whom providing low-cost  adoption of an appropriate participatory
water is not easy. Therefore, it may be neces-  framework. Integration of the gender
sary to subsidize the water access of some  dimension in a project calls for equitable
groups, or, in cases where the whole commu-  participation of both men and women, espe-
nity is poor, the whole community.3 In so doing  cially in management and the decisionmaking
within a specific project context, the Bank ought  process. Related to that, both women's and
to strengthen its partnership with communities,  men's involvement in projects may go
other donors, and civil society organizations, as  beyond consultations during the project
this partnership has proved to have a positive  planning phase to proactive participation in
impact on the poverty and social focus of its  decisionmaking, management, control, and
projects.                                   monitoring throughout the project cycle.
An underlying concern in determining water  The participation framework and mecha-
pricing issues is to anticipate behaviors involv-  nisms that are put in place need to take into
ing traditional practices. Traditional rights and  account the possible constraints to women's
governance practices must be fully understood  participation. These include time allocation,
prior to implementing water pricing to avoid  feasibility of meeting locations, and avoid-
social disruption. Inasmuch as inefficient water  ing burdens on women who already con-
use in water-scarce societies negatively impacts  tribute with unpaid, manual work, yet do not
the poor, any proposed policy interventions  have any say in decisionmaking in the exist-
should be attentive to the disrupting effects of  ing system.
implementing water demand management in   * An appropriate method of overcoming the
situations where these systems are operating  additional burdens women may face in par-
effectively and efficiently.                ticipating in water sector projects is to invest
in programs to build on women's capacity in
There is need to give more emphasis to      technical, managerial, social, and organiza-
gender concerns.                            tional skills. Such capacity-building activities
As mentioned before, incorporation of a bal-  could aim to enhance women's knowledge
anced gender approach into water sector proj-  on an array of issues, ranging from leadership
ect design has been increasing, yet is still low  skills to financial management. Increased
compared with the poverty focus of these proj-  capacity, in turn, is likely to equip the women
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Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
with the necessary skills to have their voices    working with local NGOs in identifying
heard in the system.                              women's problems and involving communi-
It is important to pay special attention to       ties in decisionmaking processes upfront are
women's right to water and ensure that            two effective solutions.
existing formal and informal institu-
tional arrangements do not disadvan-           The water sector offers good opportunities
tage women. Mainly because of patriarchal      to further strengthen the pro-poor/pro-
relations, most women do not have the right    social emphasis. To do so would require
to land, and water rights are tied to land     social impact monitoring of trends. This
rights. This leaves women in a particularly    can be done by using the database estab-
disadvantaged and vulnerable position. They    fished for purposes of the analysis pre-
are not allowed to participate in decision-    sented here. However, an institutional host
making for water allocation, they cannot       for the database needs to be identified.
voice their needs and concerns, and they       The improvement in the policy environment for
have to find coping mechanisms to access       water resource management agreed upon by the
water. If the Bank wants to discourage poli-   international community has led to a trend for
cies and institutional formats that would dis-  World Bank projects to be more socially sus-
advantage women in water sector projects,      tainable and more "pro-poor." This trend could
it need to be careful in assessing the exist-  become a permanent way of doing business
ing formal and informal institutional arrange-  for all WRM projects, with an emphasis on learn-
ments. Water sector project design and         ing systematically from results and realities on
implementation, therefore, need to encour-     the ground, establishing clear definitions of and
age policies and institutional structures that  commitment to quality, and dealing through
would allow women a more equitable say in      social assessment and stakeholder participation
allocation and use of water. There are a       with local specificity that, in the end, is the key
number of ways of achieving such impact-       to achieving an impact on peoples' lives.
Table      E.1         Variables           in    Data      File
Variable (field) name                                              Description
Report No                         Report number written on the face of the document.
Project ID                        Unique project identification number; can be used to merge the SDD with other Bank databases.
Double-check                      Indicates whether project entries are double-checked by B. Ozbilgin for accuracy of recorded
information.
QAG                               Overall QAG rating for project. Most of those projects do not have QAG ratings, and GAG does not
(Quality Assurance Group)         give out information on individual projects. However, for compatibility with the analytical SPSS data-
base, the variable has been retained in the database.
OED
(Operations Evaluation Department)  Project OED rating. This variable is obtained from the OED database, if it exists.
Country                           Project country.
Region                            Bank Region for the project country.
Name                              Full name of the project.
Sector                            Main project sector.
Type                              Project focus (infrastructure provision, or people focused).
Nationwide                      I If the project covers the whole country, this variable is checked.
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Annexes
Table       E. 1         Va ria b I es         i n   Data        F i le   ( co nt i n ued)
Variable (field) name                                                    Description
Regional                             If the project covers a particular region/province or a number of regions in the country, this variable
_  is checked.
Number of provinces               | For a regional project, indicates the number of provinces and/or cities involved.
Total number of beneficiaries        Total number of expected direct and/or indirect beneficiaries from the project. This number is obtained
| directly from the PAD/SAR; it is not independently confirmed and not available for all the projects.
Population                           Country population. If the project document gives a figure, it has been noted here. Otherwise, figures
are obtained from WB indicators for the country.
Project area population,             Population of the project area. This value was taken from the project document; it was not available
lI for all the projects.
Partnership with UN agencies       1 Indicates if there is a partnership within the project with various UN agencies.
Partnership with regional
development banks                  i Partnership with regional development banks, which include mainly ADB, IDB, and EBRD.
Partnership with JOECF               Partnership with bilateral aid agencies. While the code suggests the JOECF, the scope of the variable
includes other bilateral agencies.
Partnership with IFC              I Indicates partnership with IFC in the project.
Partnership with USAID               Indicates partnership with USAID.
Partnership with others              Indicates partnership with other donors.
Poverty targeted                     Poverty ap.plicability as defined by the project. Each project document, on its description page, has
information on whether any poverty category is applicable to the project or not. Usually, only projects
incorporating strict, targeted interventions have considered themselves poverty targeting. This
| variable reflects that information.
Poverty focused                      Poverty focus in the project. Even though a project may not technically be termed poverty targeting,
a number of projects involved poverty issues and analysis of poverty for project regions, and made
some provisions and analyzed impact of the project on poverty. These projects, within the scope of
this variable, have been rated as "focusing on poverty."
Poverty specialist                   Indicates if a poverty specialist is involved in project design. This variable is checked "yes" if there
is an economist involved in project design, although it is not always possible to figure out the respon-
sibilities of the individuals involved if the information is not available in the project document.
Poverty analysis                     Indicates if an analysis of poverty is undertaken in the project document. It does not necessitate a
_  separate, full analysis of poverty, and the variable does not make any assertions of quality.
Institutional mechanisms to          Indicates if there are institutional mechanisms established to target the poor (with the exception of
target the poor                      compliance issues) in the project design.
Mechanisms to monitor poverty        Indicates if there are mechanisms established to monitor poverty impacts (with the exception of com-
! pliance issues) during the project implermentation.
Budget allocated to monitor poverty  Indicates if there are explicit funds allocated to monitor poverty within the project documentation.
Poverty impact                       Indicates if the project's impact on poverty levels is considered in design.
Poverty impact calculated            Indicates if the project's expected impact on poverty is quantified and articulated.
Indirect poverty impact              Indicates if the indirect impact of the project on poverty levels is considered.
International social scientist       Indicates if there is an international social scientist (Bank staff) involved in project preparation. It is
not always possible to figure out the responsibilities of the individuals involved if that information
is not available in the project document.                (continues on following page)
87



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Ta b I e    E . 1        Va ria b I es         i n   Data        Fi I e    ( cont i n ued)
Variable (field) name                                                    Description
Local social scientist               Indicates if local social scientists have been involved in design. This is also difficult to assess.
International social scientist       Indicates if there have been international social scientists in the peer review of projects. This
peer review                          variable has the same limitations as those listed above.
CAS consistency                      Indicates if the project is linked and consistent with the poverty reduction objective in the CAS. A
project may be consistent with CAS, but unless it has a direct linkage to poverty reduction objective
_  in the CAS, this question is coded "no."
Nationwide sectoral
institutional analysis               Indicates whether nationwide sectoral institutions are analyzed during the appraisal stage.
Other formal institutions            Indicates whether other formal sector institutions analysis is included in appraisal.
Local sector institutions          | Indicates whether local sector institutions analysis is included in design.
Municipalities analysis              Indicates an analysis of municipalities and/or local governments.
University analysis                  Indicates an analysis universities and local intelligentsia.
Local formal institutions            Indicates analysis of other formal local institutions.
Private sector institutions        | Indicates institutional analysis of private sector capacity.
State-owned enterprise               Indicates institutional analysis of state-owned enterprise.
Local informal institutions          Indicates whether local informal institutions and civil society analysis is included in the project..
Social conditionality                Indicates whether or not a social conditionality exists in the legal agreement.
Resettlement-specific social         Indicates if there is a social conditionality in the legal agreement, it is compliance (resettlement,
conditionality                       indigenous people, cultural property) specific
Broader conditionality             | Indicates if there is a broader social condition in the legal agreement, than mere compliance issues.
Environmental assessment             Indicates that the project has an environmental assessment.
Social assessment according          Indicates that the project has an SA as defined by the 4-pillar approach. It may not explicitly state
to 4 pillars                         it, but if the project has all 4 pillars of the SA (social development issues analysis, institutional analy-
| sis, participation framework, and impact monitoring) then it is regarded as following the 4-pillar approach.
Affordability                        Indicates whether affordability and/or willingness to pay has been calculated for appraisal.
Monitoring of social
development issues                   Indicates whether there is an explicit monitoring system for social development concerns.
Budget allocated for social          Indicates that explicit funds are allocated in budgeting documents for social impact monitoring. If the
impact monitoring                    budget does not allocate a line item specially for social impact monitoring, the answer is coded as "no."
Funds for baseline survey            Indicates that explicit funds are allocated for a baseline survey/study. This is not necessarily socially
i oriented.
Funds available for baseline update  I Indicates that explicit funds are allocated for an update of the baseline monitoring and evaluation.
Resettlement                         Indicates that the project considers the relevancy of the resettlement issues and mentions them in
| the documentation.
Resettlement action plan available  | Indicates that there is a resettlement action plan available in the project document.
Resettlement action taken            If resettlement issues are considered but a resettlement action plan (RAP) is not available, what is
the action taken?
Resettlement cost                  | Is the resettlement cost clearly indicated?
Resettlement cost l$)              I If the resettlement and/or land acquisition cost is indicated in the RAP, what is it in US$ (foreign cur-
_  rency converted at the rate indicated in the PAD).
Indigenous people                    Indicates that the project considers the relevancy of indigenous people issues.
88



Annexes
Table       E. 1         Va ri a bI es         i n   Data        Fi le     (co nti n u ed)
Variable (field) name                                                    Description
Indigenous people plan               Indicates that there is an indigenous people action plan available.
Cultural property                 | Indicates that the project considers the relevancy of cultural property issues.
Cultural property plan               Indicates that there is a cultural property action plan available.
Other interesting                 | Other interesting issues about the project.
Beneficiaries                        Lists the names/types of beneficiaries identified within the project documentation.
Stakeholders in project design       Lists the stakeholders involved/consulted during the design of the project.
Stakeholders                         Lists the stakeholders expected to be involved in the implementation of the project, as indicated by
| the PAD/SAR.
Stakeholder involvement in budget    Lists the stakeholders who are expected to be involved in the project if their involvement is explic-
| itly budgeted in the project.
Community driven                     The project is considered as a community driven project if it has a dimension that involves commu-
nity groups, civil society, NGOs, or user associations.
Ethnicity                            Indicates that the project takes into account ethnicity factors in its design.
Urban-rural equity                   Indicates that the project takes into account urban/rural equity issues. If adjustments are made, these
issues are assumed to be taken into account.
Sub-regional equity                  Indicates that the project takes into account sub-regional equity issues (i.e., equity between differ-
ent regions in the project area).
Land ownership equity                Indicates that the project takes into account differences between types of landowners (e.g., land-
less farmers vs. big landowners, medium-size holders; etc.).
Gender                               Indicates that gender issues are considered in the project design.
Gender NGOs                          Indicates that NGOs/civil society organizations specialize in gender issues are involved in prepara-
tion and/or implementation.
Participation                        Indicates that the project involves participation from the low income and poor population.
Equity between rich and poor         Indicates that the project takes into account equity issues between the rich and the poor.
Direct consultations                 Indicates that the project involves direct consultations with the poor.
Participation plan                   Indicates that the project mentions participation for the implementation phase. It does not suggest
existence of a structured detailed participation action plan, if the project cites participation for
implementation, this variable is coded "yes.'
Adverse impacts                      Indicates that the project design has/reflects discussions with adversely affected populations.
EA consultations                     Indicates that environmental assessment consultations have been done.
Benefits of participation considered  Indicates that benefits of decentralization/community participation are specifically considered.
NGO involvement                      Indicates that civil society organizations/NGOs are involved in project implementation.
Consultations during implementation  | Indicates that there will be consultations with the poor during project implementation.
Consultations with extracted         Indicates that people from whose area water will be extracted are consulted.
Compensation for water extraction    Indicates that these people will be compensated.
Land acquisition                     Indicates that land acquisition is involved in the project.
Affected populations                 Number of affected population (if available).
Relocated populations                Number of population to be relocated (if available).
Enterprise acquired effected         Indicates if there ere enterprises affected by acquisition/relocation.
Empirical research                   Indicates that there is systematic, quantifiable, project-specific empirical research for project design.
(continues on following page)
89



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Ta b I e    E . 1         V a r i a b I e s     i n    D a t a     F i I e   ( c o n t i n u e d)
Variable (field) name               |                                      Description
Rapid rural appraisal                 Indicates that there is a rapid rural appraisal or other qualitative research.
Stakeholder consultation              Indicates that there is broad stakeholder consultation (meetings, seminars, conferences, etc.).
Secondary data                      | Indicates that secondary social development oriented data been used.
International experience              Indicates that there specific use of international experience, e.g., a similar project done in another
_  country.
Resettlement surveys                | Indicates that there is resettlement survey(s).
Indigenous population                 Indicates that there are indigenous population studies.
Beneficiary assessment              | Indicates that there is there a beneficiary assessment.
Board                               | Approximate date that the project went to the board (based on PAD/SAR).
Total cost                            Total project cost in US$ million.
IDA                                 | IDA financing for the project (US$ million).
IBRD                                  IBRD financing for the project (US$ million).
Other                               | Other (unspecified) World Bank financing 1US$ million).
Regional fund                       | Regional development fund financing (US$ million).
Environmental fund                  | Environmental fund financing (US$ million).
Other                                 Other financing (US$ million).
Central government                    Central government financing US($ million).
Households                            Households and individuals financing (US$ million).
Non-household                       | Non-household users financing (US$ million).
Communities                           Communities financing (US$ million).
Local government                      Financing from local governments (US$ million).
WSS financing                         Water and sewerage company financing (US$ million).
Component                           | Project components.
Cost                                | Component cost 1US$ million).
Component poverty focused             Indicates that the component has a specific poverty focus.
Component other social              I Indicates that the component accounts for other social issues (excluding safeguards).
Note:Available answers to questions yes/no/not applicable/unspecified. Variables involving population, cost, etc. are indicated in numbers and $ terms. All othervariables are text-based,
unless otherwise indicated. Oetailed variable types and descriptions are also available in the MS Access file.
90



ANNEX F: RESETTLEMENT IN BANK WATER PROJECTS-RESULTS
FROM A RANDOM SAMPLE OF 108 WATER PROJECTS
r   -       Rioettloment in Water Sector Projectis (post-1993   --
l1esenliment not                                                  Resetilniontconsiderad
considered                                                        139 prnject, 6G%)
(18 projects, 32%) |
e 2lprwect~, ~5%)                 Avorillot po1ci4t  ;t:
Averag proj6It co$t.                                                   isp'iil lin1111
US$12jM &rn 
Actiorn takeit:
12 ptojects (W2%) dismissod
Yearly distribution:               resettlomont complotely
193: 3 projocts (8%)             *   l projiocts (35%) disini:;sod
1994:4 projects (10%)              resettlement, butfomesaw        tilegotUieimt tation.
1995: 3 pr(jects (8%)              future possibilities and mrde   PtaRi"lI R4AM
1996: 4 projects (10%)             pruvisions 
1119i: 4 projects (10%)          * 3 projects (13%) inclutdud      41O
1993:5 projects (13%)              resettlement in iinplemonitation,
but did not have a separate
RAP
PrOjects nIot indicating  Aer'age cast of RAP      Average affecterO          Avora"o RAP
RAP~ cost cleairly: 3       US$2ni millioni        population,            twst per jffleud
projects (19%)                                   11,581 pOople         person:* US$S,35
(hotweon 144
ond 49,830 peoplc)
*This number is an approximation, because a number of RAPs present the number of people affected in terms
of household, therefore, the analysis used an average household size of four to calculate the approximate
number of affected people. Hence, the average cost per person value is also approximate and is highly
sensitive to the level of resettlement financing in individual prolects
91



Bridging Troubled Waters Assessing the World Bank Water Resources Strategy
F   l      Resettlemient in Water Soctor Projects (prior to 19!13) 
Resettlement nut                                                 lsettlement considered |
considerod                                                       (21 projects, 34%)
(40 projects, 66%)                      ,_,_                                I
AY.i¶age ~r~jeptia~t              (17 p ofjt, to1%t                 Aw'tg   j  Pct cOp
LIM134 million                                                     US$390 i1liort
Action taken:
.  9 projects (S3"/a) dismissud
Yearly distribution:               rosettlement completely
1986: 1 project (3%)             * 2 projects (12%) disminsed
1987: 3 projects (8°%)             resettlement, bIt forosaw      RO"     Mn 7^tiun
1988:2 projects (5%)      7       future possibilitios and mnado  plo      P)uilit at t
1989:4 projects (10%)              provisioiis                     uppw#id  14 projaets, rn%)
1990: 2 projects (5%,4)          * 6 projects (35%) included
1991:3 projccts (18%)              rosottleuient n implementation,
1992: 2 projects (I5)              but did nut h,ve a sepwrate
RAP not prepared but average resettlement
costs available
Number ot projects: 5  US$ millions: $10.44
Avei age pm capita resettlement cost: $2,291
Projects not indicating   Average cost of RAP:    Average affected          Average RAP
RAP cost clearly:          US$30 million          populatiO1:           cost per affected
0 projects (0%)                                 30,460 people          person:* US$4,969
*This number is an approximation, because a number of RAPs present the number of people affected in terms
of household; therefore, the analysis used an average household size of four to calculate the approximate
number of affected people Hence, the average cost per person value is also approximate and is highly
sensitive to the level of resettlementfinancing in individual projects.
92



ANNEX G: WATER RESOURCES MANAGEMENT POLICY QUESTIONNAIRE
TO BANK STAFF
The questionnaire was sent to Bank staff in the  the Bank's Global Water Unit circulation list
period January-March 2000. It was preceded  formed the initial participant list. Subsequently,
by two rounds of pre-testing among a random  this was expanded to include all task man-
sample of 20 Bank water staff in the period  agers responsible for water or water component
November-December 1999. The questionnaire   projects-many of those on the larger list were
was designed using commercial software devel-  general economists or specialists in other dis-
oped specifically for market and opinion surveys,  ciplines, such as sociology. In all, a list of
and an external Website was used as a post box  about 420 names was compiled. It included
to collect responses to the questionnaire. This  about 150 staff who form the Bank's core water
remote Website enabled the responses of Bank  group.
staff to remain anonymous.                    After several reminders, a total of 107 staff
Considerable difficulty was encountered in  responded. Judging by the answers to the initial
setting up a list of potential respondents. It  questions, almost all of these were from the
was the intent to send the questionnaire to all  core Bank water group, although the exact pro-
Bank staff and recent retirees who were con-  portion cannot be determined because of the
nected to water development. The names on   guaranteed anonymity.
Figure G.1           Staff Questionnaire
01 and 02 delt with administrative issues.
Q3          Which of the following best describes your position?
Task manager        53%                    Other          4%
Other Bank Staff      20%           Retired Bank Staff     2%
Lead Specialist       9%           Young Professional     0%
Outside Consultant      7%
Sector Manager         5%
Q4          Please give your position title:                  Response not classified
0!5         How much of your time in the Bank has been spent on water or water-related work?
Answer           Cumulative
75-100%                53%                 53%
50-75%                 15%                68%
25-50%                 1 6%               84%
Less than 25%              14%                98%
None                 2%                100%
(continues on following page)
93



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
F i g u re   G . 1       S t a f f   Q u e s t i o n n a i r e      ( c o n t i n u e d )
Q6            Recent Bank reports have expressed concern that the retirement of             Yes             60%
technical water staff since the early 1990s has undermined the Bank's
ability to manage lending and ESW for water. Do you agree the Bank
should be concerned?                                                           No             40%
07            How long before you plan to retire?
Within a year         1-2 years                3-5 years          > 5 years
6%                8%                       11%               76%
Q8            How many years {of cumulative experience) have you been working for the Bank ?
Cumulative Bank
Answers              experience
More than 20 years                  11%                   11%
15 to 20                    5%                   16%
12to14                     11%                   27%
9toll                     11%                   37%
6 to 8                   25%                   62%
3 to 5                   14%                   77%
Less than 3 years                 23%                   100%
Q9            How many years of professional water or water-related experience do you have?
Cumulative professional
Answers              experience
More than 30 years                  17%                    17%
25 to 30                   13%                   30%
20 to 24                   16%                   46%
15 to 19                    8%                   54%
10to 14                    11%                   65%
5 to 9                   15%                   80%
1 to 4                   18%                   98%
less than 1 year                  2%                   100%
010           Which of the following Bank Regions have you worked in?
East Asia and Pacific         50%     Middle East and North Africa        39%
Africa            45%     Latin America and Caribbean         37%
South Asia            42%       E. Europe and Central Asia        23%
None              2%
all           Are You HO or country based
HO based (DC)           65%                 Country based            26%
Non-Bank staff-Not relevant           8%                   Don't know             1 %
94



An neexes
Figure G. 1               Staff Questionnaire (continued)
Q12            How much time in total have you spent working in a developing country?
(either in the Bank or in another job?)
Answers            Cumulative Profile
More than 20 years                    23%                    23%
More than 11 but less than 20 years                33%                     56%
More than 5 but less than 10 years                 2%                     58%
Less than 5 years                   12%                    70%
More than 6 months but less than 1 year                 3%                    73%
Short trips, with no trip exceeding 6 months               8%                    81%
No experience                     2%                    83%
013 & 014      Select any of the following subjects in which you have professional expertise (113) and you have been
significantly involved in (more than 5% of your time) over the past 5 years as water-related activities (014)
Q13                    014
Personal              Bank Work
with                   with
expertise             experience
Water Resources and WR Management                      56%                    47%
Water Supply and Sanitation                  50%                     51%
Economics                     44%                    40%
Water Planning                    39%                    30%
Participatory Management                   38%                     410%
Rural Water Supply                   37%                     32%
Cost Recovery & Tariff                  29%                    32%
Irrigation Management                    28%                    25%
Evaluation                    27%                    24%
Finance                     27%                    22%
Sewerage and Waste Disposal                    26%                    26%
Water Quality                    22%                    16%
Utility Operation and Management                  22%                    22%
Privatization                   22%                    30%
Training                    21%                    20%
Irrigation Engineering                 18%                    13%
Environmental Management/Science                    16%                    15%
Other                     14%                     3%
Public & Environmental Health                  12%                     6%
Legal & Regulatory                   11%                    10%
015            To which Network(s) do you belong?
ESSD              44%                          FPSI             46%
HD               3%                          OCS               2%
PSD               1%                         PREM               6%
None               6%                    Don't know             10%
(continues on following page)
95



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Figure G.1                Staff Questionnaire (continued)
Q16           Which of the following water-related mailing lists are you on?
Water Sector (WATER HELP DESK)            77%           Rural WS&S (WSINF)             48%
WaterThematic Group (RSBG16)            57%          Other (not listed above)         13%
Q17           Have you read, or are you familiar with, the contents of the "Water Resources Management: A Policy Paper'
published by the Bank in 1993?
Yes                    No                 Don't know
72%                    22%                    6%
018           Indicate how much you agree or disagree with the following statements
about the Water Resources Management Policy Paper
Somewhat Somewhat                     Don't
True       true       untrue      Untrue       know
I found this helpful   54%         37%          8%         1 %         0%
WRMP is consistent with the Bank's objectives  41%        33%         14%          6%         6%
The document is thorough     27%         46%         20%         4%          3%
The paper is too long     17%        41%         17%        23%          3%
The document is clear and unambiguous    13%         56%        28%          3%          1%
Q19           Indicate how much you agree or disagree with the following statements
about the Water Resources Management Policy Paper
Somewhat Somewhat                     Don't
True       true       untrue      Untrue       know
The document is practical for Bank staff to use  29%      24%         32%        11%          4%
The paper only responded to the Dublin
Statement of 1992 to show the bank
had a water policy     13%         20%        31%         12%         24%
The policy document has actionable
recommendations        38%        32%         21%          6%          3%
The policy described in this document is
monitorable       17%        25%         35%         19%          4%
The WRMP document is relevant to
my Bank work       49%         25%         18%          1 %         6%
020           Indicate how much you agree or disagree with the following statements
about the Water Resources Management Policy Paper
Somewhat Somewhat                     Don't
Agree       agree     disagree    Disagree      know
The paper is too complex      7%        30%         23%         25%         16%
This document is mainlya setof platitudes   7%         41%        24%         12%          16%
The text is too dense    10%         34%        23%         17%          16%
The document gives realistic advice  14%         27%         33%         8%          19%
The Paper is relevant to Borrowers' needs  22%        34%         24%         4%          17%
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Annexes
Figure G.1                Staff Questionnaire (continued)
021           Indicate how much you agree or disagree
Somewhat Somewhat                      Don't
Disagree    disagree     agree       Agree        know
The different sectoral/sub-sectoral units in my
region work harmoniuosly on water
policy issues      20%        26%         30%          6%          18%
Cross-sectoral cooperation in the Bank has
improved since the 1993 water policy   10%         17%         22%          8%         44%
There is insufficient FINANCE for
comprehensive & holistic approaches
to water in ESW/operations       4%        10%         27%         32%          27%
There are insufficient PERSONNEL for
comprehensive/holistic approaches
to water in ESW/operations       4%         9%         32%         29%          27%
Senior councils are effective in helping to
implementthe water policy      12%         17%         22%          5%         44%
Bank staff do not have the skills to implement
the water policy      21%        29%         23%          3%          25%
022            Indicate how true you think the following
statements are
Somewhat Somewhat                      Don't
True        true       untrue      Untrue       know
The Bank has shown a high degree of
leadership in promoting integrated water
resources management        19%        33%         28%          9%          11%
The Bank has practiced what it preaches
withwaterpolicy        13%        26%         27%         15%          20%
The water policy HAS been institutionalized
my REGION          8%        28%         22%         10%          33%
The water policy HAS NOT been
institutionalized in my Sector   8%         31%         20%         14%          28%
The water policy HAS NOT been
institutionalized in my UNIT   10%         26%         20%         19%         25%
023            Indicate how much you agree or disagree
Somewhat Somewhat                      Don't
Agree       agree      disagree   Disagree      know
There is not enough continuity in Bank staff to
implementthe water policy      16%         37%         17%         11%         19%
I/we (my team) are dependent on non-Bank
funding (e.g., trust funds) to implement
the policy      37%         23%          6%          8%         27%
(continues on following page)
97



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Figure G.1                Staff Questionnaire (continued)
023            (continued)
Somewhat Somewhat                      Don't
Agree       agree     disagree    Disagree      know
Bank staff do have sufficient experience to
implementthewaterpolicy        17%         40%         20%         8%          15%
Adding integrated water resources management
to specific water operations is very difficult  26%     32%         15%         15%         13%
Most of our clients support the integrated
water resources management policy      15%        34%         26%          7%          17%
024            Indicate how true you think the following statements are true
Somewhat Somewhat                      Don't
True        true       untrue      Untrue      know
Staffing needs to implement the policy
HAVE been quantified at unit level    5%         12%         14%        19%          51%
Staffing needs to implement the policy
have NOT been quantified at regional level  17%         18%          5%         7%          54%
Staffing needs to implement the policy
have NOT been quantified at sectoral level  13%         15%         9%          5%          58%
Staffing needs to implement the policy at
network level HAVE been quantified     4%         7%          12%         11%         66%
025            Indicate how much you agree or disagree
Somewhat Somewhat                      Don't
Agree       agree      disagree   Disagree      know
I have taken advantage of the EDI/WBI
Water Resources Management programs        14%        14%         41%         18%          12%
EDI/WBI is effective at disseminating
the water policy with borrwers and
development partners      10%         27%         25%          3%         34%
The Bank has been effective at building
international cooperation for water
resources management        19%        32%         23%          3%          23%
The Bank has been more careful in
incorporating health safeguards in
waterprojects since the policy    13%        25%         28%          4%          31%
026            Indicate how effective you think the Bank has been at the following activities
Somewhat     Not very      Not         Don't
Effective   effective   effective  effective     know
Partnering with bilaterals to coordinate
and implement water policy reforms    14%         51%         19%          8%          9%
Dealing with water in a more integrated
cross-sectoral manner       8%        44%         37%          8%           4%
Paying attention to environmental impact
of water operations      10%        73%         12%          2%           3%
98



Annexes
Figure G.1                Staff Questionnaire (continued)
Q26            (continued)
Somewhat     Not very      Not         Don't
Effective   effective   effective   effective     know
Developing relationships with NGOs to
further the water policy agenda    3%         52%         35%          6%           5%
Treating water as an economic good
(opportunity costing of water) in its project
appraisal of loans/credits    10%        54%         24%          7%           5%
Integrating watershed management and
river basin planning/management activities   9%         32%         39%          5%         16%
Q27            Indicate how effective you think the Bank has been at the following activities
Somewhat     Not very      Not         Don't
Effective   effective   effective   effective     know
Coordinating with UN partners on
implementing water reform      13%         45%         22%         10%         10%
Focusing on the poverty implications of
water management          6%        43%         38%         10%           4%
Institutionalizing the Bank's water policy  4%       44%         33%          6%          14%
Enhancing the participation of women
in water operations      2%         41%         38%          5%          15%
Getting private participation in the
watersupplysector        15%        58%         19%          4%           4%
Recruiting enough new water specialists
to replace retiring Bank staff   3%         24%         30%         25%         17%
Integrating water quality and environmental
issues with institutional designs for
water allocation       5%        35%         32%          9%          19%
99



C                                                                                                0
0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0
Cross-tabulation of the responses of              I~4Aes wic  tf             7      C. 5
CD~ lo a I                        I  0
lD5 survey participants         E 
CD    CL                 I's~ _D   .Z                 co
0  - ~ ~~  Ei  - '                                 =,,.  mImCL'O, -,.5
iu  L L       0.2if I ;l1a  c  -'  La.E  __ _u     a  u  0  a2
E      c                                          Z  ,  I       >~~~~~~~~~~~~~~~~~~~~~~~II'
2710 21f ia :      33     1     513131311      1013             o
Waterplanning  41  16~~~L  7E  29                                         11711 r  L 16
3:  CID COL I  'M~~~~~~~~I           I        '
management  59umbr 4 237! 31 649h16 54h34 12711 71  4  42 221413     3125133
9 1                                  I~~~i~ Lt1q  61   80(
Einaince etam2ngeen/12nc178732ii 21       1         6I6  76t18ii3 1147216217 1     53
Waterplannng  4116  7292    10214 1525313532195134          3136110 2'1 3     941 
Water supply and sanitation  52  1  14 16  15  4  49  25 2I 3 5 2  6 1  0 2  29
flural water supply  39  1 1  6  11  16  4  29  27  15  1  6  3  18  6  9  5  7  1 11  6  10  2  69
Sewerage and waste disposal  27  9  1 1  9  8  3  '25  1 1  21  4  9  3  12  1  2  10  6  13  10  12  - 78
Public/environmental health  1314  5  614  3 10 ' 6 5  4  6 3  8  2 2 2 1  3  3  31  31    C
Water quality    23  8 4  12 12 7 14 5 luK3s 14     48    I14   7b6'9     8 5 1    61 i 
Legal/regulatory  12  7  7  4              .    1    , 4 4 2  1  3  21             83
Participatory management  41 14  8 16 1916 24 i17  1 4 6 5 34 6  13  212  6 9 2   83     CD
Irrigation engineering  19  8 ,31,9  18 4  5~ I  41  2  9  10  14 1I4          I   53c
Irrigation management  30 14  4 11  26 7 41 8  - 4 3 16 12 23   4 9 5     2 7 1   77
Utility operation and management 23 l7 10 8  9I !8lH02 5I4 7 24 16  a1 13 8 ~70
Training         22  8 4 12   9311 15;i          44 10    29    9149         6I5
Cost recovery/tariff  3  4 1        9  11 11  2  6  6  9  3  79       2   8 18  I  6
Privatization    23 10 11 5 5 !1u16 8!0       3  3  6 8      2  9 7 16 22 7       96~
Evaluation       29 8 10   8 9 2 15    8110!2       6 1 12,9    111 1121I1 1 92 66
I        _     I 
Other            14   51 3     3i541t1 1         1-    8~ 2  6 113! 1     !43      21!
Percentage of Bank expeine!I       -              !II                   '
using expertise   88 17894196 5691 179 781 67 82 70 79 71 88 70,67 162 171 76 100:i



ANNEX H: THE DIFFICULTIES OF INTEGRATED RIVER BASIN
MANAGEMENT
Recognizing that it would be difficult to imple-  practice substitute for inadequate local capacity.
ment the water strategy in client countries, the  The most notable examples of this have been
Bank and the UNDP produced a guide on capac-  in Bangladesh and Mozambique. In Bangladesh,
ity-building for countries interested in forming  large expatriate teams undertook the national
strategies for managing water resources (Le  water planning effort in the late 1980s and early
Moigne and others 1994), and its prescriptions  1990s, and in a clear demonstration that no
were reinforcecd by all the UN family (UN/WMO  local capacity was created, a new expatriate
1997). A key principle was to build national  team is currently producing a third iteration of
capacity to manage water resources through the  the national water plan. Mozambique suffered
process of strategy formation adapted to coun-  a similar experience.
try conditions. It was envisagecl that the coun-  The MNA Region is notably successful in
try strategies would be a set of medium- to  assisting clients to develop an orderly regional
long-term action programs and measures to sup-  and country strategy framework (box H.1), but
port achievement of broad development goals this has not led to investment lending that is bet-
and to implement water-related policies. Most ter than in other Regions because it is difficult
important, measures would include developing  to mainstream water strategies and improve per-
managerial capacity, building institutions, and  formance of line agencies.
enhancing human resources.                  Successes in strategy adoption are linked
Critical elements for successful strategy for-  with good local capacity and ownership, with
mulation were specified as a clear national state-  the country in the driver's seat. An irony is that
ment of development objectives and key water  low-key Bank advisory support under these cir-
policies, supported by government commitment cumstances is generally more successful (for
at the highest level to using a comprehensive  example, in Mexico, Colombia, and Venezuela)
approach in formulating a water strategy. Once  than highly visible Bank-sponsored national
committed, a high-level policy committee would  water strategies and plans (Bangladesh). The
guide a team of national experts charged with  recent Argentina and Ghana water resources
determining partners and processes for strategy  management strategies put together by national
formulation.                              experts are best-practice examples. It is salutary
In practice, however, there have been few suc- to compare the pragmatic Argentine approach
cesses, and this approach has failed when own-  that recognizes local problems and only rec-
ership was low and many of the critical elements  ommencds a few tasks in the short term, to the
were imposed as lending conditions. That was  Bank-driven agenda in India that made 52 rec-
a fate similar to that imposed on National Envi-  ommendations for reform in 1991, achieving lit-
ronmental Action Plans, with a similarly chilling  tle, and the 1998 water resources strategy that
effect on local ownership and capacity building.  makes even more recommendations.
Most notably, the Bank's desire to time-table strat-  Regrettably, the global experience with imple-
egy formulation and resulting investment plans  menting strategies for integrated water resources
has resulted in importation of expatriate spe-  management is that while the concept is sound,
cialists to "assist" the national effort, but who in it is extraordinarily difficult to implement suc-
101



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
Box H.1             MNA Water Strategy Development
MNA, along with AFR, is one of the region,s in the Bank where  with this strategy, the focus turned on detailed water sector
its water activities in agricultural, industrial and potable water  reviews ol individual countries with significant water prob-
development andAimanagemeni is integrated under one sector  lems: Egypt (1993), Tunisia (1994), Morocco (1995). Jordan (1997)
leader-and this has led to a more comprehensive approach.  and currently Yemen. These studies were followed up by a
Agriculture is the biggest consumer of water in the region  series of regional roundtables of stakeholders that discussed
accounting for abo,ut 85 percent of demand. Consequently, the  common water development issues and solutions-the Bank was
Bank initiated its -ateT strategy work in 1993 with a regional  there to listen and learn how to tailor investments to felt needs.
examination of the'MNAs regional experience of improving the  The most recent roundtable on Policy Reforms in Water
efficiency of watie eu'se in agriculture. The following year MNA  Resources in MNA (1999) looked at case studies developed by
published its regional water strategy-for managing water. In line  stakeholders in Jordan, Oman, Tunisia and Yemen.
cessfully, even in OECD countries (Barrow 1998;  and standard-setter/regulator, while the Mekong
OECD 1998; Millington 2000). Even where there  Commission and Niger River Basin Authority
is local ownership, there is a danger that the most  limit themselves primarily to resource manage-
dominant water agency-typically the irrigation  ment. The rest adopt a dual role of resource man-
department, frequently cosmetically renamed   ager and operator and service provider-the
as the water resources agency-will capture the  most notable being the TVA and the Jordan Val-
strategy for its traditional vested interests. This  ley Authority. Unfortunately, earlier Bank ini-
happened in Turkey, for example, under two    tiatives have advocated design of RBOs that
bank-financed projects. In Brazil, the PLANSA  measured everything against fixed targets and did
model of the 1970s and 1980s created powerful  not allow for a natural evolution (Frederiksen
state water companies, based on the premise that  1992b): "the nature of reform of water institu-
institutional strengthening alone would be suf-  tions demands a will to attack the situation in a
ficient to improve and sustain the efficiency of  coherent, comprehensive manner. Piece-meal
state water companies. Instead, it produced a  or simple solutions do not exist." Unfortunately,
large and inefficient bureaucracy and a highly  this blanket mechanistic approach is frequently
politicized management culture with few incen-  politically impracticable and tends to fail, while
tive structures to serve the poor or address envi-  an  organic, adaptive  approach  succeeds
ronmental issues. Similar problems arose in   (Maxwell and Conway 2000).
Sub-Saharan Africa, particularly in Nigeria's Lake  A recent global review of holistic approaches
Chad Basin Commission and the Niger Basin     to planning (OED 2000b) found that it is best to
Authority. Indeed, one reviewer found he could  avoid delegating responsibility for integrated
not "recognize a single . . . body that had . . .  planning problems to "super-institutions" created
played an effective role in planning and coor-  specifically for the task. Experience suggests
dinating the development of a single river basin"  that these are either ineffectual in the short term
(Scudder, 1989, 1994).                        or unproductive or unsustainable in the long
The Bank's strategy advocates setting-up river  term. The biggest problem for RBOs is that they
basin organizations (RBOs) to implement water  tend to take the form of regional structures that
strategy. However, there is no single global  attempt to claim (but often merely duplicate) the
model that has proved successful, since each  responsibilities of existing regional departments
must adapt itself to local realities and needs. A  of national ministries. This happened to the
review of 11 RBOs (Millington 2000) indicated  River Basin Councils and Aquifer Committees in
that only the most mature (The Rhine Commis-  Mexico. Additionally, a pervasive problem fac-
sion, Murray Darling Basin Commission) have   ing these new organizations is securing ade-
evolved to limit themselves to resource manager  quate funds for water resources management
1 0 2



Annexes
activities. To mitigate these problems, new bod-  integrated implementation. Decentralized gov-
ies should instead be given responsibility for ernance-subsidiarity-is a key component of
coordinating the relevant elements of existing  this approach. Notwithstanding this new para-
organizations and ensuring participation of digm, lack of baseline data and adequate mon-
stakeholders, including NGOs, civil society, and  itoring leads to decisions based on false
the private sector: integrated planning, but not assumptions.
103






ENDNOTES
Chapter 1                                 Chapter 2
1. This document was the basis for the Bank's  1. Bank Management is currently evaluating
Operational Policy (OP) 4.07 (Annex A). How-  issues and recommendations made in Dam Com-
ever, the OP is limited to core mandatory pro-  mission's Report and has indicated that it will
visions. For evaluation, the full Policy Paper  address these in the context of the forthcoming
(Strategy hereafter) is the appropriate reference,  Water Sector Strategy Paper.
since it incorporates the guidance needed to  2. Thirteen countries ceased borrowing
achieve development effectiveness.        because of graduation from the Bank, civil wars,
2. Annex C contains an evaluation of 306  or economic mismanagement. Forty countries
completed Bank water and water-related proj- started borrowing, most as a result of economic
ects exiting between 1988 and 1999.       liberalization (Europe and Central Asia and East
3. Indeed, 78 percent of countries participat-  Asia and Pacific Regions), others as a result of
ing in sector operations did not live up to finan-  successful peace negotiations (Lebanon, West
cial covenants, and the Bank took remedial  Bank and Gaza, Angola).
action in one case only. One reason, OED found,  3. Water investment in other sectors aver-
was that the Bank may have required reforms  aged 44 percent of the loan when its share
to be implemented too quickly or before the bor-  could be determined.
rowers were fully committed.                4. The hydropower portfolio after 1993
4. OD 4.00, Annex B: Environmental Policy  includes 11 dam projects and 49 environmental
for Dam and Reservoir Projects (1989); OD 4.01:  projects. The ratio before 1993 was 16 dam proj-
Environmental Assessment (1991); OD 4.02:  ects to 11 environmental projects.
Environmental Action Plans (1992); OD 4.15:  5. The Bank's Quality Assurance Group
Poverty Reduction (1991); OD 4.20: Indigenous  (QAG) has independently evaluated the quality
People (1991); OD 4.30: Involuntary Resettlement  of 292 projects at entry over the period 1997-99
(1990); OD 7.50: Projects on Intemational Water-  against consistent Bankwide standards. OED
ways (1990); OD 14.70: Nongovernmental Orga-  disaggregated these data to compare the qual-
nizations in Bank-Supported Activities (1989); ity at entry of water and non-water projects.
OMS 2.12: Project Generation and Design-    6. OED, together with a social assessment team
Local Involvement (1978); OMS 2.22: Financial  from the Bank's ESSD network, evaluated the
Performance Covenants for Revenue-Earning  social concems and poverty focus of 103 randomly
Enterprises (1984); OMS 3.72: Energy, Water  selected project appraisal documents, half com-
Supply, Sanitation and Communications (1987).  pleted before the water strategy came into effect
5. Bank Management disagrees with the pro-  and half after (details are given in Annex E).
jected reduction of investment going to agri-  7. The WSS Sector Board observed in 2000 that:
culture shown in table 1.1 and states that it "the key step to turning around our portfolio is
should show an increase. Management argues  to first put all the problems on the table as the
that according to the results of long-term food  MNA Region has done over the last two years,
supply and demand forecasts by the Intemnational  which helps explain the fact that it now tops
Water Management Institute and the Interna-  (along with ECA) the problem projects league
tional Food Policy Research Institute, additional  table in W&S" (intemal Bank communication). In
investment in irrigation and drainage will be  the MNA case there is clear evidence that this leads
key to ensuring adequate and affordable food  to better policy even though it is a painful process
supplies, particularly for the poor. In addition to  in the short term. The same is true of the water
financing a modest increase in irrigated area, new  supply and sanitation sector as a whole.
investment will be required for technology to
improve water use efficiency and to redress his-  Chapter 3
torically inadequate investment in drainage and  1. There are 146 CASs covering 98 countries.
irrigation rehabilitation.                Some countries had only one CAS, some two,
1 05



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
and a few had three. OED analyzed all the CASs  adequate supervision of environmental condi-
for a number of specific water issues.   tionalities; sufficient action to ensure satisfactory
2. An aggregate CAS water strategy index  implementation, M&E, and mitigation and man-
was developed taking account of the main water  agement; continued stakeholder consultation;
strategy issues-countries were scored on this  and appropriate action if compliance with safe-
basis. To answer the CAS issue fully would  guards was inadequate.
require that all countries be assessed for the  9. Of course, these tariffs would be higher if
nature of their water problems, and that all the full opportunity costs of the water were
external assistance and the countries' own efforts  added.
be evaluated together. Only then could the
country lacunae in the Bank's water operations  Chapter 4
be clearly identified.                      1. Domestic, industrial, and irrigation use
3. A joint team from the Operations Evalua-  tends to pollute downstream supplies or ground-
tion Department and Environmentally and   water, while irrigation accounts for more than
Socially Sustainable Development Network team  70 percent of global fresh water consumption.
evaluated the design of 170 projects (a 100 per-  Dams modify seasonality and bring the need to
cent sample of the 1993-99 cohort) for respon-  reconcile the competing objectives of power
siveness to the 1993 water Strategy document generation, flood control, and irrigation supply.
against 11 criteria grouped under three cate-  2. Annex H: The Difficulties of Integrated
gories: comprehensive framework, institutions,  River Basin Management.
and economic and social considerations. Method-  3. Administrative measures include defining
ology and details are described in Annex B. supplies volumetrically and qualitatively, water-
The group of evaluators graded each project into  shed protection, registering water rights, and
one of four classes: high, substantial, modest, and  enforcement of permits. Economic instruments
negligible. For this report, the high and sub-  include extraction and pollution fees, and reg-
stantial classes were merged for simplicity.  ulating water markets.
4. Members of the Bank's Water Resources  4. This section is based on the results of
Management Group express strong reservations  stakeholder workshops held to discuss country
about the validity of using management infor-  experience of water development and the role
mation data in this section of the report for  of the Bank. Country studies for Brazil, India, the
deriving conclusions of a cross-sectoral and  Philippines, and Yemen were prepared by a
cross-regional nature.                    team drawn from ESSD's Global Water Unit
5. The total cost of all projects involving  (ESGWIU) and OED. These studies were circu-
watershed management since 1990 is $2.37  lated prior to the workshops in Brazil (March
billion.                                  1999), prepared jointly; in Yemen (September
6 A recent QAG review revealed significant  1999) and the Philippines (April 2000), prepared
problems with the forestry subcomponents and  by ESGWU; and in India (May 2000), prepared
supervision.                              by OED.
7. Dam safety is a consideration for 104 Bank  5. Latvia, Morocco, Mozambique, Peru, and
projects. Many are not classified within the  the Philippines.
Bank's water sectors and include mine-tailings  6. QAG used a 15 percent random sample of
dams.                                     ESW products for the period FY98-99 that
8. The section is based upon an ongoing sur- included five water studies, for: India (1998),
vey by the QAG RSA3 of FY 99 that contained  Yemen (1998), Indonesia and Brazil (1999), and
200 randomly selected projects, of which 50  Indonesia (sewerage, 1999).
were subjected to detailed review by a group of  7. QAG, 1998. The areas where particular
environmental specialists. Water projects were  attention needs to be paid in future ESW are in
only part of this sample. Evaluative questions  ensuring that the work meets its own stated
were directed at determining whether there was  objectives (less than two-thirds achieved this) and
10 6



Endnotes
that recommendations are realistic. Only half (53  Annex A
percent) of the ESW satisfactorily included rec-  1. Bank includes IBRD and IDA, and loans
ommendations that were realistic in light of  include credits.
social, political, and administrative constraints
and that were suitably prioritized. These all Annex B
work to undermine the likely impact of ESW.  1. This is based on the UN (1995) low pop-
8. Management commented that while reset-  ulation projection. The medium-growth projec-
tlement planning quality has improved signifi- tion would increase those at risk to 2.8 billion.
cantly since the 1994 Bankwide resettlement  2. Globally, approximately US$60 billion per
review, there has not been a comprehensive  year is invested in water projects. Only 10 per-
review of resettlement implementation for proj-  cent is funded by external sources, of which the
ects prepared since the early 1990s. However,  Bank contributes half.
feedback from task teams suggests that system-
atic efforts would need to be undertaken to  Annex C
strengthen the institutional, technical, and orga-  1. Indeed, 78 percent of countries participat-
nizational skills of borrowers to meet Bank  ing in sector operations did not live up to finan-
requirements on social policies.          cial covenants, and the Bank took remedial
9. There were also major recommendations  action in one case only. One reason, OED found,
about how compensation packages should be  was that the Bank may have required reforms
restructured, particularly regarding the land-for- to be implemented too quickly or before the bor-
land deal. As these are adequately dealt with  rowers were fully committed.
within the Environmentally and Socially Sus-  2. The analysis is based on project numbers
tainable Development Network and are outside  only as each project represents an opportunity
the scope of this review, they are not discussed. to implement Bank strategy; an analysis weighted
10. 6 India UP Tubewells Cr 1332; Pakistan  on Bank commitment gives a better outcome,
Private Tubewells Development project Cr 2004.  typically 5-10 percent higher.
Much could have been leamed from Bangladesh,  3. A total of 157 projects (47 percent of the
where at the same time the Bank had been suc-  portfolio) were active after 1993, and 92 (27
cessful in enabling private sector participation  percent) after 1995; 38 projects were approved
in groundwater development-and this learning  after 1990 and half their implementation was in
experience was hindered by the split of the  the post-Strategy period.
South Asia Region among two independent     4. The number of project exit results declines
operating departments.                    sharply after 1995.
11. Bank management objects to this state-  5. Only 9 of the 336 were approved after 1993.
ment, which is based on the findings of OED's
recent Lesotho Country Assistance Evaluation  Annex D
(Hassan 2002).                              1. Africa in this context is Sub-Saharan Africa
12. The ideas summarized in this paragraph  only, north Africa is covered under the Bank's
are derived from Ellerrman 2000.          MNA Region.
Chapter 5                                 Annex E
1. Senior Water Advisor, personal communi-  1. The analysis also looked into common
cation.                                   variables such as GNP per capita, country pop-
2. A strong letter from an NGO group was sent  ulation, and national and/or regional scope of
to the U.S. Executive Director's office.  the project in a multiple regression analysis to
3. Overall, 72 percent of the 107 staff surveyed  determine if those differences have an effect on
had read the Bank's water strategy paper. How-  community participation, consideration of gen-
ever, only two-thirds of the FPSI staff had read  der issues, and consultations with the poor. The
it compared with 80 percent of ESSD staff.  analysis concluded that the relationship between
107



Bridging Troubled Waters: Assessing the World Bank Water Resources Strategy
these factors and the inclusion of a community-  had disastrous effects on these communities'
driven approach, gender issues, and participa-  livelihood and contributed to declines in their
tion is not significant.                   incomes, living standards, and health.
2. As also supported by OED's evaluation of  4. The Methodology for Participatory Assess-
rural water projects, insufficient focus on  ment is a useful toolkit that combines gender-
institutional capacity retards sustainability of  and poverty-sensitive indicators for conducting
CDD initiatives.                           a thorough social analysis. See Dayal, van Wijk,
3. A case in point is communities in the Aral  and Mukherjee 2000.
Sea area. Within that area, water diversions have
1 0 8



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La evaluaci6n en el Banco Mundialy la Corporaci6n Financiera Internacional
C6te d'lvoire: Revue de l'aide de la Banque mondiale au pays
Philippines: From Crisis to Opportunity
Filipinas: Crisisy oportunidades
Rebuilding the Mozambique Economy: Assessment of a Development Partnership
Reconstruir a Economia de MoVambique
http://www.worldbank.org/oed



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