-U- 4 rt , >xC X > ' fe,1':~ , < Xt=, t '\ ', t, z2 ?<~~~~~~~~~~~~~~~I X A.X i, 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 All rights reserved. Manufactured in the United States of America First Printing June 2002 1 2 3 4 05 04 03 02 The findings, interpretations, and conclusions expressed here are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The boundaries, colors, denomina- tions, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any terntory or the endorsement or acceptance of such boundaries. 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ISBN 0-8213-5140-0 Library of Congress Cataloging-in-Publication Data has been applied for. ' # 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 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 79 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- 80 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 81 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 82 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 83 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 84 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 85 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. 86 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% 96 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. 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