E N V I R O N M E N T 20022 w > @ - ~D E P A R T M E N T rj " * ~~~P A P E R S PAPER NO 68 TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT POLLUTION MANAGEMENT SERIES Lnvironmental a acity Building: A lRev'lew of the VVorlld B ank's :Portfol'io Sergio Margulls Tonle Vetleseter May 1999 Environmentally and Socially Sustainable Development The World Bank ESSD Environmental Capacity Building: A Review of the World Bank's Portfolio Sergio Margulis Tonje Vetleseter May 1999 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Copies are available from the Environment Anchor, The World Bank, Room MC-5-128. Contents Abstract v Executive Summary vii Chapter 1 Introduction 1 Chapter 2 The Bank's Environmental Institutional Development Portfolio 5 Project Objectives 5 Project Components 7 Trends 9 Chapter 3 Challenges and Problems in Environmental ID 11 Context 12 Macro conditions 12 Political support and ownership 13 Strategic work 13 Project Design 14 Clarity of objectives and components 16 Project complexity and assessment of risks 17 Realism 17 Design of indicators 18 Flexibility, innovation, and piloting 19 Decentralization and participation by stakeholders 19 Project sustainability 22 Project Implementation 26 Relative performance 26 Performance of environmental ID portfolio 27 Common implementation problems 27 Borrowerfactors affecting implementation 28 Bankfactors affecting implementation 28 Otherfactors affecting project implementation 29 Pollution Management Series iii Environmental Capacity Building: A Review of the World Bank's Portfolio Chapter 4 Lessons and Recommendations 33 Key Lessons 33 Process Issues 34 Incentives for Task Managers 34 Tools Available for Preparing ID Projects 34 Government Issues 35 Recommendations 35 Annexes A Active World Bank Environmental Institutional Development Projects 39 B Objectives of Environmental Institution-Building Projects, Institutional Components 43 C Institutional Components in EnvironmLental Institution-Building Projects 45 D Supervision and Implementation Indicators 47 E Activities, Instruments, and Approaches in Environmental Institutional Development Projects 49 Bibliography 55 Boxes 1 Environmental Institutional Models 3 2 Typical Activities of Environmental ID Projects 8 3 The Mexico Environmental Project in the Country Context 14 4 Environmental vs. Sectoral Agencies 15 5 Technical Assistance for Information Management in Rio De Janeiro 18 6 Madagascar II ID Project: Lessons fronn the First Project 20 7 Decentralization 21 8 Stakeholder Participation: Malawi and Zimbabwe 22 9 Sustainability and Funding of Environmental Work 23 10 The Program Approach: Longer-Term Perspectives in Institutional Development 25 11 Procurement and Disbursement in Poland 29 12 The National Environmental Project in Brazil 30 Tables 1 Active environmental institutional development (ID) projects through fiscal 1997 6 2 Number of projects and costs by Region through fiscal 1997 6 3 Components of environmental ID projects 7 4 Comparative performance of environrnental ID projects 26 5 Environmental ID projects rated unsatisfactory, by project age 27 iv Enviromnent Department Papers Abstract Weak institutional capacity is one of the frustration. Key factors contributing to this major bottlenecks to the implementation of perception are the frequent vagueness of ID government policies and programs in the objectives; the incompatibility between environmental field. The World Bank and standard Bank approaches and projects for other bilateral and multilateral agencies capacity building, which is a slow and have accordingly been heavily involved in gradual processes involving cultural change; institutional strengthening and in providing and the incentives for task managers to technical assistance for environmental focus more on quick disbursements than on institutional development (ID). The purpose results on the ground. Like the institutions of this study is to help improve the design that it tries to support, however, the Bank and effectiveness of Bank-financed needs time to change. The new adaptable environmental ID projects by taking stock of lending system and the increased emphasis and drawing lessons from experience with on participation, decentralization, flexibility, the environmental ID portfolio to date. and longer-term perspectives are likely to Although it is too early to judge conclusively help improve the Bank's ID portfolio. To the impact of ID projects, there is a ensure that activities are sharply focused, perception that, despite the "satisfactory" stand-alone ID projects should perhaps be rating given to most of them, the results in complemented by ID components of larger terms of improved environmental investment projects. management capacity have been a cause for Pollution Management Series v Executive Summary Resources committed by governments to compared with the resources allocated to environmental problems have increased projects. Yet the vast majority of such projects considerably over the past 10 years. are considered satisfactory by the Bank's Preliminary assessments of the effects of such Annual Review of Portfolio Performance expenditures suggest that they often may not system. A prime reason for the sense of have been used in the most (cost-) effective frustration is that the Bank's recognition of the manner, in that they did not produce vital importance of institutional strengthening significant environmental improvements or may not have been accompanied by a parallel did not address the real environmental understanding of the process through which priorities. Among the key factors contributing institutional change takes place. to this problem are weaknesses of institutions and organizations, meaning the lack of Changing and influencing institutions capacity of government environmental fundamentally involves changing institutional agencies to comply with their legal mandates. cultures, the knowledge base, and informal Institutional weaknesses have also been a modes of interaction, rather than just "simple" major bottleneck to the implementation of organizational structures, legal and regulatory environmental policies and programs. frameworks, or office hardware. Such efforts are inevitably slow and gradual, and they are The World Bank and other bilateral and likely to encounter resistance from established multilateral agencies have realized the interests. It is possible that the Bank has urgency of addressing these problems and allocated large amounts of money in contexts have been heavily involved in institutional where the real need is for cultural change. In strengthening and in providing technical fact, too much money may be assistance for environmental institutional counterproductive to ID objectives; large development (ID). The Bank's active inflows of resources distort the normal modus environmental ID portfolio, which has operandi of institutions, so that projects are institutional strengthening as a primary implemented under conditions that are not objective, consists of 28 projects, involving sustainable. nearly $1.5 billion, to which the Bank is contributing $800 million.1 The challenges in strengthening institutions in the environmental field are further This is a relatively young portfolio, and it is complicated by the cross-sectoral nature of too early to say anything very conclusive environmental problems; the lack of about the impact of projects on the ground. knowledge about and understanding of the There is, however, a perception of frustration issues, which are typically new for the when the results of such efforts in terms of countries; and the fact that the institutions improved environmental management and being strengthened or charged with improved environmental conditions are implementing the projects are typically very Polution Management Series vii Environmental Capacity Building: A Review of the World Bank's Portfolio young, without clearly defined institutional visibility of a Bank-financed environmental responsibilities. project can matter more than its actual outcomes. Bank-financed ID projects face three key internal problems that affect them negatively: All this-the Bank's relatively poor knowledge of institutional cultures, the existing perverse * Current incentives for task managers incentives given to its task managers promote large projects even though this is regarding ID objectives, the poor internal not what is required for ID projects, and dissemination of lessons, and the rather they induce task managers to focus on the inflexible project cycle-means that the Bank approval of projects rather than on the may not have a great comparative advantage transfer of skills and improved in providing technical assistance in management capacity. The incentives environmental ID. This can certainly be work to minimize problems in the country changed, and some of these problems could be that may negatively affect projects, overcome at the cost of relatively little time especially ID projects, such as the overall and effort. Much depends on management's macroeconomic and political context, the understanding of such problems and on its level of real commitment to and willingness and capacity to act. The process ownership of a project, and the actual may have already started: there is undeniably capacity of agencies to implement it. an ongoing learning process in the Bank, with lessons being incorporated into both the • The current World Bank project cycle has implementation of older projects and the been relatively adequate for infrastructure design of new ones. development in stable economies with well-established institutions and The key recommendations of the study are the predictable government policies. following: However, one-time investments with limited Bank involvement in supervision * Projects must contain a clear statement of are not well suited to provide the support what is to be strengthened, clarifying the and flexibility needed for a continuous, roles and responsibilities of institutions. In gradual capacity-building effort. countries that lack the necessary policies and strategies and have weak institutional • The widespread use of "blueprint" capacity, the temptation to "do solutions may be particularly everything" must be resisted by inappropriate for ID because of the identifying priorities and phasing in specific characteristics of individual actions accordingly. countries and institutions.2 Government agencies involved with On the government side, the key elements for environmental ID projects must have successful implementation of ID projects are ownership of the projects and be fully ownership and political support. External committed to them. Beneficiaries, assistance can help weaker institutions define interested parties, and the general public and perform their legal assignments, but must be drawn in, to ensure or introduce governments and beneficiary agencies must public pressure on institutions and have the political motivation and ultimately accountability by institutions. The Bank lead the process "from the inside." must leave substantive tasks to be Governments must also be clear about what performed by beneficiary agencies, precisely they expect when requesting engaging them in the process and sending assistance for ID-something that requires the the signal that technical assistance does preparation of strategies for the environment, not have a zero opportunity cost. as well as broader ID strategies for the public sector. In most cases, such strategies do not . Technical assistance is successful only if exist ex ante and are prepared as part of ID skills and technical expertise are actually projects. In a few cases, too, the political absorbed by beneficiary institutions. viii Environmental Department Papers Executive Summary While lessons from other countries and obvious and visible changes. They should contexts are always useful, in the case of also have the incentives and the time to ID projects in particular, the Bank must design small projects, and they should be tailor its efforts to specific country needs objective enough to assess realistically the and conditions. It must improve its government's capacity and effective knowledge about institutions, making interest in a project. This involves greater use of resident missions and local understanding and willingness to change experts. To ensure sustainability, the by the Bank's management-not, longer-term impact of projects should be fundamentally, by task managers taken into account in the performance themselves. evaluation of staff and of projects. * The overall objective of ID projects is to * New operating procedures and new strengthen the environmental lending instruments have to be introduced management system as a whole, not just for dealing with the process nature of ID. an enviromnental agency in isolation. It is Projects should support longer-term thus important to create partnerships and programs and pilot initiatives. They cooperation in the ID process between the should be designed as a series of "building beneficiary agency and other entities blocks," with the specific objectives being involved with environmental issues, such defined as the project develops, as as universities, industries, institutional capacity is gradually nongovernmental organizations (NGOs), accumulated, and as the Bank increases its and other government agencies. This knowledge about institutions. The Bank's often means nothing more than new adaptable lending system, which exchanging information and making the aims at providing phased and sustained process as transparent as possible. support for the implementation of long- term development programs, may be a * Stand-alone ID projects may be necessary promising move toward such flexible to help prepare or strengthen the overall systems and should definitely be tried in policy framework governing ID projects. environmental issues in developing countries, but the specific objectives to be * The Bank needs to better understand the achieved and the actions to be financed history and politics that guide institutional may be clearer for investment projects. decisions, to build a strong consensus with Therefore, ID will probably best be local governments and institutions about achieved by a combination of the two the importance of the proposed efforts, to types of project. (Investment projects are ensure the capacity for absorbing the not reviewed here, but they are also not proposed assistance, and to secure problem-free.) commitment by governments. Such initiatives are an essential and . The current positive, universal trend in unavoidable price to pay for ensuring environmental ID projects toward ownership and for structuring the long- decentralization, partnerships, and more term commitment that the process of direct involvement by local stakeholders institutional strengthening requires. must be continued. Projects must foster Within institutions, a process of public participation and pressure to discussion, education, and information is increase project ownership and to make required at the initial stages of ID institutions accountable for their work. programs. More dialogue and negotiation with industries, polluters, and users of natural * Task mangers must have incentives to resources is necessary, as is the use of pursue a long-term process with more transparent procedures in environmental institutions, with small and government decisionmaking in slow disbursements, and without many environmental matters. Pollution Management Series ix Environmental Capacity Building: A Review of the World Bank's Portfolio Since most of the ideal ex ante conditions will 2. As noted in the paper, the term not be met at the beginning, environmental ID "blueprint" is not completely appropriate projects have to be simple and flexible. The because there are no clear guidelines for temptation to include too many things has to ID projects, nor is there an intense be resisted by prioritizing and by keeping dissemination of experience. expectations moderate. Nevertheless, task managers often come up with "standardized" approaches in the Endnotes design of environmental ID projects. 1. Figures are through fiscal 1997. Dollar amounts are U.S. dollars. x Environmental Department Papers 1 Introduction Resources committed by the governments of nearly $1.5 billion, to which the Bank is developing countries to environmental contributing $800 million. (See Annex A.) problems have grown considerably over the Strengthening of environmental institutions is past 10 years. Preliminary assessments of the fundamental to achieving sustainable effects of such expenditures suggest that improvements in environmental conditions resources often may not have been used in the and in the management of environmental most (cost-) effective manner, in that they did resources, but understanding institutions in not produce significant environmental order to influence or to modify them is a improvements or did not address the real complex task. It requires a good knowledge of environmental priorities in these countries. the "institutions,' in the sense used here-of the underlying culture, rules, and incentive Among the key factors contributing to such structures influencing choices and outcomes, ineffectiveness are weaknesses of institutions as well as the informal modes of interaction or organizations, meaning the lack of capacity among actors. These cannot be changed of government environmental agencies to merely by altering organizational structures, comply with their legal mandates.3 office hardware, or skill levels, which tend to Underlying these weaknesses are factors such receive the preponderance of attention in as lack of political support, unclear projects. While the latter are clearly very institutional responsibilities, mismatch important in increasing institutional and between responsibilities and budgets, organizational capacity, lasting changes can be shortages of qualified personnel, and undermined if the inicentives to use new information gaps. Institutional weaknesses technology efficiently, to communicate and have also been major bottlenecks in the share knowledge, or to change the allocation implementation of environmental policies and of resources are not in place. The question prograIns. then arises: How successful can capacity- building projects be in the long run if they do The World Bank and other bilateral and not extensively analyze and focus on the multilateral agencies have realized how incentives underlying institutional setups? critical it is to address these problems and have been heavily involved in institutional Among the factors that particularly influence strengthening and in providing technical the effectiveness and capacity of institutions- assistance for environmental institutional in addition to a clear allocation of development (ID). The Bank's active responsibilities among institutions and good environmental ID portfolio, which has coordination mechanisms-are the following: institutional strengthening as a primary objective, consists of 28 projects, involving * The institutions' degree of independence- their autonomy in decisionmaking on Pollution Management Series 1 Enviromnental Capacity Building: A Review of the World Bank's Portfolio financial matters and on political- environmental capacity in a country. As the administrative matters, including the review demonstrates, models that are establishment of criteria for appointment successful in one country may prove and removal from office inappropriate and ineffective in another. However, some description and definition of * Their accountability to the various agents in what capacity building and institutional society, including civil society, the agents development entail is useful when trying to subject to regulation, the government evaluate project performance. Box 1 briefly bureaucracy, and elected officials. The summarizes some of the institutional models legal framework helps establish and adopted by different governments in the determine the conditions for these environment sector. characteristics, although the culture and habits determining their enforcement are In light of the increasingly severe resource equally important. constraints on the Bank's capacity to assist in the preparation of projects, the purpose of this The degree of stakeholder participation and study goes beyond recommending additional transparency of the decisionmaking process are or corrective measures that should be taken by important mechanisms for achieving a better the Bank prior to Board approval. Even balance between independence and capacity, though institutional development does require on the one hand, and accountability, on the that the Bank have a good initial other. Various studies have shown that understanding of institutional conditions, it is without a broader knowledge of the issues in well recognized that there are diminishing society and without involvement of returns to further efforts in this respect as long communities, nongovernmental organizations as the traditional project cycle paradigm (NGOs), and other groups in putting pressure prevails. The paper therefore looks at the on the government for change, little will be conditions and incentives within countries that done. A capacity-building effort seeking to affect the context, design, and implementation change the environmental management in a of environmental ID projects and suggests country should therefore strive to build better ways for the Bank to collaborate and knowledge and resources in other parts of provide support. The review also examnines society as well, including the private sector, the extent to which the Bank has any social groups, and authorities. comparative advantage in supporting certain kinds of environmental projects. That is, can The objective of this study is to help improve implementation shortfalls be remedied by the design and effectiveness of Bank-financed "doing more and doing better"-or do they environmental ID projects.4 The study reflect an inappropriate decision to go ahead supports this objective by reviewing and with a project that might have been premature drawing lessons from experience with the or that did not enjoy the full support of the environmental ID portfolio to date. Among relevant authorities in the borrowing country? the issues addressed are the need for and appropriateness of Bank-financed stand-alone En that sense, this study is not intended to enviromnental ID projects, their results in duplicate the responsibility of the Bank's terms of improved environmental Operations Evaluation Department (OED) for management or improved environmental assessing the outcome of individual projects. conditions, and their performance in relation Rather, it takes a broader approach that asks to the overall country and Bankwide to what extent stand-alone environmental portfolios. The study also focuses on the projects have succeeded in efficiently and appropriateness of the tools available and sustainably yielding tangible benefits and how used to support ID objectives and on whether the Bank could be more effective in addressing the incentives for task managers are the challenges of environmental ID, both in appropriate for promoting these goals. countries and within the Bank. The paper places particular emphasis on reviewing the This review is not meant to propose an ideal appropriateness of project objectives and the model for setting up or improving 2 Environment Department Papers Introduction Box 1 Environmental Institutional Models When establishing a regulatory framework for the enviromnent sector, a number of questions must be answered in order to find the most appropriate structure for a given country. Should regulation be led by a technical or a political group? Who should appoint regulators, where should they be from, and how long should they serve? What are the checks on abuse of regulatory power? How independent should an agency be? Who participates in the decisionmaking process? The answers to these questions depend on the country's socioeconomnic, cultural, institutional, and political structures. The administrative structures of national environmental systems vary considerably. Some countries, such as Canada, Germany, Mexico, and Spain, have a full-blown ministry, with one or more technical and action-oriented agencies providing support. In Canada's very decentralized system, provinces have considerable power over both policy preparation and enforcement; in Mexico, most responsibilities for environmental management are concentrated at the federal level. In the United Kingdom, environmental management is one of three areas of responsibility of the Ministry of Environment, Transport and the Regions. In the United States, the main environmental authority is the Environmental Protection Agency (USEPA), an independent agency that reports directly to the president. Chile follows an alternative model in which responsibilities are decentralized horizontally with the aim of mainstreaming environmental concerns into all aspects of economic activity. A high-level coordinating body ensures integration of environmental concerns and avoids capture by individual ministries. The symbolism of a ministry devoted entirely to the environment is probably most important when a government wishes to make a visible change in the direction of strong pro- enviromnent policy. There are, however, problems associated with this model. One is overlap between the responsibilities of the environmental ministry and those of sectoral ministries. Another is that the existence of an environmental ministry may lead to a lack of concern with environmental problems on the part of other ministries, increasing the policing role of the environmental ministry. Furthermore, an environmental minister is unlikely to want to be seen as having only a controlling, constraining, and policing role; there will always be an incentive to broaden the ministry's functions to include significant spending activities. In almost all countries, the ministry of envirornent (or the equivalent) is responsible for environmental policies, while a separate environmental protection agency carries out their technical inplementation. Typically, the national environmental agency has the primary responsibility for regulating air and water pollution, hazardous waste disposal, noise, nuclear safety, and, in many cases, the protection of nature. However, many environmental issues cut across the mandates of several ministries and agencies. The particular distribution of environmental protection functions in a country will be influenced by the nature of the most serious environmental problems and the types of institution traditionally involved in the regulation of the economic sectors that are the main contributors to environmental problems. Source: Marguls (1998). Pollution Management Series 3 Environmental Capacity Building: A Review of the World Bank's Portfolio degree to which project implementation Endnotes reflects those objectives. 3. Even though the words "institutions" and The study consisted essentially of a desk "organizations" are used interchangeably review of all 28 Bank environmental ID in everyday speech, a distinction between projects. Staff appraisal reports (SARs), forms the two can help clarify the source of 590, memoranda to the President, back-to- weaknesses in a country and thus shed office reports (BTORs) of supervision light on how to help change or strengthen mnissions, midterm reviews, and other the institutions in question. Institutions documents were examined, and selected task are the "rules of the game'-shared codes managers were interviewed. During the of conduct that influence human preparation of this study, the authors interaction. Organizations are the participated in supervision missions for two structures of groups of "players" projects, in Mexico and Poland. The study connected by common objectives and drew on a previous study on capacity goals. Marriage is an example of an development and the environment (Margulis institution; schools and churches are and Vetleseter 1996a) prepared by the same examples of organizations. Many authors for the Organisation for govermnent agencies are both institutions and organizations (Berryman, Boyle, and Economic Co-operation and Development others 1997; de Capitani and North 1994). (OECD). That study benefited from contributions from counterparts in selected 4. Even though the words "institutions" and countries (Brazil, The Gambia, Nicaragua, and "organizations" are used interchangeably Poland), and some of these perspectives were in everyday speech, a distinction between incorporated in the current paper. the two can help clarify the source of weaknesses in a country and thus shed Chapter 2 of this paper summarizes key light on how to help change or strengthen statistics on the Bank's environmental ID the institutions in question. Institutions portfolio and examines the objectives, are the "rules of the game"-shared codes components, and activities involved in the of conduct that influence human various projects. Chapter 3, the core of the interaction. Organizations are the paper, reviews the major problems and structures of groups of "players" challenges faced by the projects in their connected by common objectives and context, design, and implementation stages. goals. Marriage is an example of an Chapter 4 summarizes the main lessons and institution; schools and churches are recommendations of the study. examples of organizations. Many government agencies are both institutions and organizations (Berryman, Boyle, and others 1997; de Capitani and North 1994). 4 Environment Department Papers 2 The Bank's Environmental Institutional Development Portfolio The Bank has typically contributed to breakdown, projects in Africa are more likely institutional development through lending to be for freestanding technical assistance. The operations, economic and sector work, and, loans tend to be significantly smaller than mainly, technical assistance. Its active elsewhere and are often linked to national environmental ID portfolio, in which environmental action plans (NEAPs). Projects institutional strengthening is a primary in Latin America and Africa are more likely to objective, consists of 28 projects covering 26 incorporate green issues and those in countries in all regions. The oldest project European countries, brown ones. At present, started in 1990, and the first project to close Asia and Latin America receive the most did so in 1997. Currently, the pipeline contains funding, but the largest number of projects in 20 new projects that are expected to become the pipeline are in Europe, the Middle East, active between 1997 and 2001. The total cost and Asia (see Table 2). of the active projects is $1.5 billion, to which the Bank is contributing $800 milion. Table 1 Project Objectives summarizes basic information on this portfolio. The objectives of environmental ID projects are often very broadly stated and tend to be As can be seen from Table 1, environmental ID focused on the process of creating or projects are often small, reflecting the strengthening an institution rather than on relatively low financial cost of technical outcomes. Statements of objectives are often assistance and capacity building; 13 projects blurred with the description of project are less than $21 million each. The average components. The most commonly given cost for all the projects is $54.6 million, but it is objectives are institutional strengthening or pushed up by a few relatively very large building, strengthening of environmental projects that combine ID with other legislation and policies, development of environmental investment components. Seven environmental management capacity, and of these "mixed" projects combine ID with attention to priority problems, all of which are biodiversity conservation or natural resource quite vague. As discussed later, the ID management ("green" issues), 4 with objectives of mixed projects tend to be more industrial or urban pollution problems focused because the problems to be addressed ("brown" issues), and 5 with both green and are more specific. Annex B shows a matrix of brown issues. Looking at the regional the objectives of all the projects. Pollution Management Series 5 Environmental Capacity Building: A Review of the World Bank's Portfolio Table I Active environmental institutional development (ID) projects through fiscal 1997 (millions of U.S. dollars) FY Country Project IBRD/IDA share Total project cost 1990 Brazil National Environment Project 117.0 166.4 1990 Madagascar Environment Program I 26.0 156.0 1990 Poland Environment Management Project 18.0 27.3 1991 Mauritius Environmental Monitoring and Development 12.4 20.5 1992 Indonesia BAPEDAL Development Technical Assistance 12.0 15.0 1992 Mexico Environmental Project 50.0 126.6 1992 Nigeria Environmental Management 25.0 37.9 1992 Pakistan Environmental Protection and Resource 29.2 57.2 Conservation 1993 Bolivia Environmental Technical Assistance 3.7 5.5 1993 Chile Environment Institutions Development 11.5 32.7 1993 China Environmental Technical Assistance 50.0 76.0 1993 Ghana Environment Resource Management 18.1 35.9 1993 Korea, Rep. of Environmental Research and Education 60.0 97.3 1994 Gambia, The Capacity Building for Environmental 3.0 5.0 Management-Technical Assistance 1994 Korea, Rep. of Environmental Technology Development 90.0 156.0 1994 Morocco Environmental Management 6.0 10.8 1995 Benin Environmental Management 8.0 9.3 1995 Honduras Environment Development 10.8 12.5 1995 Russia Environmental Management 110.0 194.8 1995 Trinidad and Environmental Management 6.2 10.5 Tobago 1996 Uganda Environmental Management. Capacity Building 11.8 15.2 1997 Ecuador Environmental Management Technical Assistance 15.0 20.0 1996 Colombia Urban Environmental Management 20.0 40.0 1996 Sri Lanka Environmental Action 1 14.8 20.8 1996 India Environmental Management. Technical Capacity 50.0 61.5 Building Technical Assistance 1996 Madagascar Second Environment Program (Madagascar II) 30.0 155.0 1996 Malawi Environmental Management 12.4 13.7 1996 Zambia Environmental Support Program 12.8 20.8 Total 834.5 1,529.0 Table 2 Number of projects and costs by Region through fiscal 1997 Total project cost (millions of Average project cost (millions Region Number of projects U.S. dollars) of U.S. dollars) Africa 10 398.3 39.8 Asia 7 484.0 69.1 Europe and Middle East 3 232.9 77.6 Latin America and the 8 414.0 51.8 Caribbean Total 28 1,529.2 54.6 6 Environment Department Papers The Bank's Environmental Institutional Development Portfolio Project Components listed components and are cited in virtually all projects. Environmental information, Environmental ID projects have an average of education, and awareness are given more 4.1 components and a large number of attention than is apparent from the description subcomponents. The mixed projects have the of objectives. Encouragement of local and highest number of components-between 25 stakeholder participation is still not given a and 30 each in Chile, Madagascar, and great deal of weight, although there is a clear Mauritius, for example. Development or trend toward emphasizing it in the most strengthening of environmental policies and recent projects. Table 3 shows the components regulations, institution building or of all the projects. (See Annex C for greater strengthening, and training and development detail.) Box 2 briefly reviews typical activities of human resources are the most frequently financed by environmental ID projects. Table 3 Components of environmental ID projects Number of Approximate Activity Component projects cost Institutional performance Institutional restructuring and strengthening 25 48.4 Training and development of human resources 24 Decentralization and development of local 16 66.6 capacity Participation 9 9.0 Coordination and streamlining of responsibilities 6 5.4 Establishment of new agency 5 155.4 Policies and instruments Development of environmental policies 20 56.6 Development and review of legislation and 18 44.5 regulations Strengthening of environmental assessment 6 12.0 capacity Information, monitoring, Environmental information systems 20 87.3 and education Environmental education and research 17 191.7 Public awareness 15 22.0 Strengthening of environmental monitoring 12 57.9 Studies 12 22.1 Financing mechanisms External resources administration and economic 4 10.1 analytical capacity Notes: The costs presented in this table are approximate and depend on how well the costs of individual actions are specified in the SARs. When only the overall component cost was available, costs have been distributed uniformly among the major subcomponents. Contingencies, taxes, project administration, and other costs are not included in the table. For the mixed projects, which are the more expensive ones, all sector components not directly related to ID were excluded. After making all these adjustments, the total costs presented in this table account for only 51 percent of the total project costs given in Table I. * Costs mixed with those for other components. Pollution Management Series 7 Environmental Capacity Building: A Review of the World Bank's Portfolio Box 2 Typical Activities of Environmental ID Projects Institutional Performance In principle, all ID activities are intended to improve institutional performance, directly or indirectly, and virtually all SARs call for establishing, reforming, strengthening, or supporting environmental institutions or environmental management capacity. The most common specific ID activities are restructuring institutions, clarifying responsibilities, coordinating with other government agencies, training staff, upgrading equipment, improving capacity to enforce regulations, and promoting decentralization and development of local capacity. Policies and Instruments All environmental ID projects involve some environmental policy or legislation component. In many cases, the project is the first stage in a process of assessing the current legal structure and needs, and it often includes studies to identify areas of concern, overlaps, and new areas to be developed. The most frequently mentioned legislative actions include review and preparation of environmental legislation, procedures, and guidelines for environmental impact assessments; studies on the use of economic instruments; and various sectoral policies and instruments, such as policies for management of tropical forests and marine environments, river basin conservation, and biodiversity protection (green issues) and for water and air pollution control and the management of solid and hazardous wastes (brown issues). Information Systems, Data Management, and Monitoring Seventeen projects include some element for improving environmental information systems. The justification is that such systems facilitate sharing and coordination of environmental data and information among agencies, thus promoting institutional coordination and improving data quality and overall environmental management. In 11 of the projects, the objective is to establish a whole new environmental information network or system. In some cases, the systems have a more specific focus such as geographic information (Poland), biodiversity (China), oceanography (Mauritius), coastal zones (Brazil), legal envirormnental issues (Chile and Honduras), or various brown issues (Chile, Mexico, and Russia). A few projects (Brazil, Madagascar, and Pakistan) include the establishment of geographic information systems (GIS) and involve buying equipment, establishing information centers, and training people to improve data collection, analysis, and dissemnination. Monitoring activities indude design and installation of monitoring networks, development of indicators, and analysis of information. Financing Mechanisms Several projects have components and initiatives for addressing financial issues. In most such cases (11 projects), these take the form of analysis of the implications of current macroeconomic practices, examination of possible changes in incentive structures and policies, and economic studies of selected environmental issues. Five projects seek to involve the private sector in environmental management. Sectoral projects or components often include the creation of environmental funds with the objectives of, for example, supporting natural protected areas or abating pollution in specific regions or ecosystems. Eight projects establish funds or credit lines for environmental management and environmental projects, such as funds for community-based projects in Ghana, India, Sri Lanka, and Zambia and for financing pollution abatement in Morocco and Russia. (continued) 8 Environment Department Papers The Bank's Enviromnental Institutional Development Portfolio Box 2 (continued) Education and Research Educational activities target primary schools (eight projects) and universities (five projects). In both cases, the main focus is on the production of teaching materials, development of environmental curricula and establishment of environmental university programs, teacher training, and (in Sri Lanka) collaboration with NGOs on education. Nine projects have environmental research components or subcomponents that seek to establish priorities and strategies for environmental research and focus on a green or brown investment component. Public Awareness Campaigns Twelve projects have designed public awareness campaigns as a way of encouraging broader participation and understanding and of building capacity and consensus for the promotion of environmental programs and policies. The target audience for these exercises is the general public, with a strong focus on local communities and rural people. In half of the public awareness campaigns, the emphasis is on community leaders and regional NGOs. both as targets for education and as conduits for spreading information. In a few projects, the public awareness component extends to different layers of government agencies-in the case of Morocco, up to the ministerial staff. Media campaigns are most frequently used to reach the broad public, through television and radio programs, posters, bulletins, and newsletters. A few projects (Chile, The Gamnbia, Ghana, and Morocco) emphasize the need to develop and use the skils of NGOs and local governments in both the development and the implementation of these campaigns. Trends * Recent projects put more emphasis on participation and community-based The short time span involved and the efforts. relatively small number of projects make it * There is a tendency toward pilot efforts hard to point out clear trends in project design and decentralization to states or local over time or among regions. Some features, communities. however, do stand out, in addition to the . Newer projects tend to introduce regional trends already mentioned: economic or financial mechanisms. r The new projects are somewhat smaller than the older ones. Pollution Management Series 9 32. Challenges and Problems in Environmental ID Institutions are rooted in the socioeconomic * Environmental issues are cross-sectoral in and political contexts of the societies around nature and require a high level of them. Their effectiveness and behavior are coordination by people and organizations influenced by informal structures and values, that often have not interacted before. as well as by the more easily identified formal ones. Changing and influencing institutions * The concerns and approaches introduced therefore does not involve simply making are often relatively new, and there is likely formal changes in organizational structures, to be a lack of knowledge and legal and regulatory frameworks, or office understanding of the issues, both by the hardware; it also means changing attitudes country leadership and by the public at (the "institutional culture"), the knowledge large. base, and informal modes of interaction. Such efforts will invariably be slow and gradual, as * The institutions that are being they are likely to encounter resistance from strengthened or that are charged with entrenched interests. If ID initiatives are to implementing the projects are typically succeed, political will and commitment to ID very young, without clearly defined initiatives-"ownership"-are needed within responsibilities. An established the country, and governments must lead the framework in the form of strategies, process of strengthening their own general sector policies, and incentives is institutions. External technical assistance may frequently lacking. be helpful in facilitating changes and activities when human, technical, or financial resources A variety of internal problems may negatively are limiting factors, but goals and values affect the Bank's own environmental ID cannot be imposed by external technical efforts: assistance, nor can such assistance do much to make up for lack of local ownership and . The current incentives for task managers commitment. promote larger projects, even though this is not what is required for ID. The In the case of environmental ID, there are incentives also induce task managers to additional challenges: focus on the approval of projects rather than on transfer of skills and improved management capacity. The emphasis on Pollution Management Series 11 Environrnental Capacity Building: A Review of the World Bank's Portfolio project approval may lead managers to Context give less attention to country factors that may negatively affect projects, such as the The decision, by a country and by the Bank, to overall macroeconomic and political launch a project is not always based on the context, the level of real commitment to most urgent or high-priority needs and and ownership of a project, and the actual limitations in the country. Several factors capacity of agencies to implement the determine the appropriateness of a project's project. These predispositions are, again, timing: particularly harmful in the case of ID objectives. * Macro conditions in the country-the prospects for economic and political * While the traditional World Bank project stability. cycle has been relatively adequate for infrastructure development in stable * Political support, which depends on factors economies with well-established such as the understanding of issues institutions and predictable government among senior decisionmakers, the policies, one-time investments with project's relevance in terms of responding limnited Bank involvement in supervision to their priorities, and the degree of public are not well suited for providing the awareness and pressure. support and flexibility needed for a continuous, gradual capacity-building * The existence of strategic and analytical effort. work underlying the proposed activities, such as specific sectoral (environmental) * The widespread use of "blueprint' strategies that outline priorities and solutions may be particularly coordination with other sector policies, as inappropriate for ID because of the well as the government's overall approach specific characteristics of individual to institutional reforms (specific ID countries and institutions.5 strategies for the public sector). On the Bank side, environmental ID projects This section identifies and analyzes the above require a country-specific ID strategy, as problems as they apply to the Bank's well as integration with broader environmental ID portfolio and describes environmental strategies and the Country possible solutions. Although ID is of course a Assistance Strategy (CAS). process, it is clearer to divide the analysis according to three stages of the current project Macro conditions cycle: context, design, and implementation. Macroeconomic conditions in a country, as Context is the degree of ownership and the well as the overall political climate, obviously timeliness of a project in relation to the overall influence an ID project's chances of success. political and economic climate in the country, Although this is true of other kinds of projects to the severity of environmental degradation, as well, economic and political instability can and to the existence of analytical and strategic be particularly damaging to capacity building thinking in the relevant sectors; in a new sector, where consistent political support and transfer of resources are needed. Design characteristics include clarity of objectives and components; project complexity Looking at indicators such as inflation rates and assessment of risks; realism; design of and growth of gross national product (GNP), indicators; flexibility, innovation, and piloting; as well as at the performance of the entire decentralization and stakeholder participation; Bank portfolio in the relevant countries, it and project sustainability. becomes clear that there is a connection between the macroeconomic problems facing a Implementation refers to the progress and country and its overall portfolio performance. effectiveness of project implementation in For instance, the three projects with the terms of achieving ultimate objectives. 12 Envirornent Department Papers ChaRlenges and Problems in Environmental ID longest records of unsatisfactory performance letter from the government indicating its were in Brazil, Mexico, and Nigeria, which commitment to the sector or ensuring confronted long or acute periods of institutional coordination. Still, these are macroeconomic or political crisis. Even nonbinding documents, and it is not until the though it is difficult to predict macroeconomic project becomes effective that the actual and political upheavals over the lifetime of a degree of commitment can be determined. project, the risk factors for a project are higher in countries with a history of instability, and it Perverse incentives for overoptimism about is crucial to assess realistically the implications commitment are more prevalent and more of such conditions. The task managers and detrimental in the poorest countries, where, country teams who prepare the assessments without political support, environmental must be given the right incentives to make problems will not, and perhaps should not, be realistic evaluations of country conditions given priority attention. As in the case of without any pressure to develop a project if macroeconomic and political conditions, these the overall context is not appropriate. incentives must be changed. An increased reliance on tesident missions, which are now Political support and ownership assuming growing importance in the Bank, may be particularly helpful in this respect. Without government ownership, efforts by Box 3 illustrates some of the specific issues in external agents are doomed to failure simply the Mexico Environmental Project. because the beneficiaries themselves are not really interested in the first place. Strategic work Environmental institutions or departments within such institutions are often interested in Because a minimal organized institutional and and involved with a project, but too frequently policy framework is, or should be, a political support from other areas and higher prerequisite for starting investment projects, levels of government is missing or slow to environmental ID projects have often been develop. Such political support depends on launched as one of the first steps in Bank the importance of the issues and the projects to assistance to enviromnental management in a senior politicians, which in turn depends on country. It is natural that a certain volume of their understanding and knowledge of studies, analytical work, and statements of environmental problems and the prominence priorities for the environment sector be of these issues on the national agenda. Public incorporated into the project itself. Although pressure plays a key role in ensuring that the ID process should be thought through environmental issues are placed on politicians' prior to project implementation, most agendas, but it has not gathered the same developing countries lack specific institutional force in terms of public activities and pressure development strategies, reflecting unclear groups in developing countries as in industrial objectives or priorities in this field. This often countries. The public awareness campaigns leads to an ad hoc treatment of ID activities initiated in a large number of projects are and to a lack of integration with "mainstream" attempts to build a wider knowledge base development assistance, particularly in critical about the issues and to generate public sectors such as water, energy, and transport pressure. (see Box 4). NEAPs and other strategic documents such as country assistance It is difficult for external agents to determine strategies, in turn, too often fail to realistically the degree of political conm-itment or the level assess the actual priority governments give to of ownership of a project by governments. the environment or to identify what specific The SARs are a relatively poor source of such problems cause weak institutional capacity information, since both task managers and and what specific problems result from it. governments have incentives to claim a high Institutional strengthening will prove degree of political commitment prior to project ineffective if such problems are not clearly implementation in order to ensure approval. A identified beforehand. number of SARs contain some kind of policy Pollution Management Series 13 Enviromrtental Capacity Building: A Review of the World Bank's Portfolio Examination of SARs indicates that only 12 of Project Design the 28 projects in the environmental ID portfolio are based on clearly identified Even when a project is conceived in strategies. The majority of these projects are in accordance with government strategies in an the Africa region and are follow-ups to overall positive political climate and with NEAPs. In some cases, such as Bolivia and well-established priorities, the way it is Russia, the projects specifically aim, among designed may lead to difficulties during other objectives, at the preparation or implementation and ultimately to failure. strengthening of policies, strategies, and Portfolio reviews and project evaluations, coordination. The project in Pakistan was including the recent portfolio improvement launched in parallel with the country's NEAP. program reviews by the Quality Assurance In some countries, such as Benin, Honduras, Group (QAG), have repeatedly shown that and Mauritius, strategies or NEAPs exist, but poor quality at entry is a major source of the extent to which the respective projects project failure. Design features that have been specifically address these strategies is not shown to affect performance include clarity of clear. Although not many projects clearly objectives and components; project complexity indicate a link to strategic work, there is a and assessment of risks; realism; design of definite trend in this direction. Among the 12 indicators; flexibility, innovation, and piloting; projects based on well-identified strategies are decentralization and stakeholder participation; the 5 most recent ones, those for India, and attention to project sustainability. Madagascar, Malawi, Sri Lanka, and Zambia. Box 3 The Mexico Environmental Project in the Country Context Environmental degradation in Mexico has long been a significant problem, and the govenrnment's capacity to address it properly has usually been limited. The Mexico Environmental Project was the first World Bank project in the sector in Mexico. At the time of project preparation, the institutional needs of the environmental agency were enormous: the legal and regulatory framework was fragmented, and the agency suffered from poor technical and analytical capabilities, obsolete or inadequate physical infrastructure, and weak capacity to coordinate with other sectors of the government. The need for a project combining financial support, technical assistance, and upgrading of analytical capabilities was obvious. However, because of weak overall capacity, there were no clear strategies and priorities for analyzing the problems, defining priorities, or determining the most cost-effective actions. For its part, the Bank had only limited experience with this type of project; at the time, there was only one other stand-alone environmental project. As a result, the project design was overambitious, with far too many components of relatively high complexity, and relied on an institution (SEDUE) with limited implementation capacity. In addition to the concern within the environmental agencies, there were political difficulties. Neither the timeliness nor the appropriateness of the project was unanimously accepted by all segments of the government. Despite improving macroeconomic conditions, the government's senior decisionmakers regarded both the environmental sector and the Bank's involvement in it with great suspicion. In fact, there was resistance even within the sector. Other sectors of government, particularly the Planning and Finance secretariats, were skeptical about the Bank's involvement, the severity and importance of environmental issues in the country, and, in particular, the proposed project, the actions to be financed, and SEDUE's capacity to implement the project. Thus, while the deficiencies of the sector clearly called for some action to support and reinvigorate it, political support was largely absent from the beginning. Ultimately, SEDUE and the Bank did too little to inform and negotiate with the more powerful Secretariat of Finance with a view to bringing it on board and helping launch the project with greater vigor. 14 Environment Department Papers Challenges and Problems in Envirorunental ID Box 4 Environmental vs. Sectoral Agencies Even in industrial countries, "mainstreaming" of environmental issues is far from complete. Yet it is necessary as a way of ensuring buy-in on the part of traditional and powerful players, increasing capacity by utilizing existing resources, and preventing duplication of effort. Some projects have addressed the need to mainstream by establishing central agencies to provide leadership in setting an environmental agenda, establishing priorities, and coordinating policies and initiatives, leaving the implementation and day-to-day handling of projects and actions to the relevant sectoral agencies. Chile Environment Institutions Development (Fiscal 1993) The existing environmental institutional framework in Chile is moderately mainstreamed, with a National Environmental Commission (CONAMA) consisting of the ministers for planning and cooperation, economy, and other sectors with potential influence on the environment and an Operational Committee that includes all ministers with environmental competencies. There are also regional and provincial environmental commissions, chaired by local government authorities, that include the directors of the Ministerial Regional Secretariat and representatives of community and social organizations. Prior to the project, responsibilities had been spread among various sectors and institutions, resulting in turf battles and redundancies. Accordingly, the project aims to strengthen CONAMA and its Technical and Administrative Secretariat and so build up CONAMA's role as the coordinating organization for the national effort on environmental policies and issues. The intention is for CONAMA to support rather than replace the work and responsibilities of the sectoral ministries by helping define the policy framework and by providing service functions such as environmental data collection, analysis, and training in environmental assessment. Sri Lanka Environmental Action 1 (Fiscal 1997) Institutional weaknesses in Sri Lanka included unclear definition of responsibilities, lack of coordination among government entities, and shortage of adequate staff resources. The project is designed to restructure the Ministry of Transport, Environment and Women's Affairs for better policy planning and coordination and to strengthen the Central Environment Authority (CEA) to carry out its analytical, monitoring, and enforcement responsibilities. Part of the CEA's tasks will be contracted out to allow the agency to concentrate more efficiently on a limited number of critical facilitating and regulatory activities. As a complement to this project, other donor agencies are planning to assist in strengthening the environmental management capacities of the line ministries and provincial government institutions. Other solutions include establishing environmental liaison units in sectoral agencies (Honduras, Madagascar II, and Uganda) and establishing environmental management procedures for all agencies involved with issues affecting the environment. It is especially important to ensure involvement and understanding of the issues by the ministries of planning and finance, which generally appears to be a neglected area in the ID portfolio. Exceptions include the creation of an environmental unit in Nigeria's Federal Ministry of Budget and Planning and the establishment of a similar unit in the Central Bank in Chile for integrating environmental accounting. Clarity of objectives and components degree of independence or accountability tend to be left out. The projects also tend to As noted above, the Bank does not yet have a ignore relevant political factors and framework for appraising institutional conditions that affect the fundamentals of capacity. This lack may have led task institutional rules and practices, assuming managers to take an ad hoc approach; that Bank projects can be restricted to important factors such as agencies' limited "technical" issues only. The result is that the Pollution Management Series 15 Enviromnental Capacity Building: A Review of the World Bank's Portfolio project objectives related to ID are often too It is interesting to compare mixed projects, broadly stated and the specific actions to be which involve investment, with stand-alone taken are unclear. With a few exceptions, the capacity-building technical assistance projects objectives are vague: strengthening in this respect. Since the mixed projects are institutional capacity, developing for specific activities in a sector, it is plausible - environmental management capacity, that they would have very specific objectives. developing environmental legislation, and In general, this is true except for the two assisting in the implementation of strategies Korean technical assistance projects, which and plans. In most cases, the emphasis is are narrowly focused on research and more on the ID process than on substantive education. Projects with green or brown outcomes; only five projects specify components are more likely to have concrete environmental improvements on the ground objectives focusing on the sector, and there is as an objective. When the goals are presented also generally a closer logical conmection in such abstract terms, it is difficult to relate between objectives, components, and them directly to components or to more expected outcomes. For example, Indonesia's tangible improvements in the institutions or BAPEDAL project, which has a brown in environmental conditions. component, aims to strengthen the capacity and role of environmental management and The usefulness of the SARs as good sources of pollution control agencies to design pollution information on the details of project activities control measures and to implement them is extremely variable. Some describe centrally and regionally. The components activities, rationales, approaches, and include review of laws and procedures for expected outcomes in great and logical detail, pollution control, development of pollution while others sketch the activities broadly control procedures, and strengthening of without always making it clear what regional pollution control agencies. In the instruments will be used, how the activities Brazil project, learning by doing has been will further the stated objectives, or what the emphasized as an important contribution to long-term outcomes are expected to be. In increased capacity. The implications of this some cases this may be due to a conscious approach, however, are not clear. effort to keep the design flexible, allowing for the gradual and unpredictable nature of A focus on sectoral agencies or issues may capacity-building efforts and awaiting the have the advantages of greater unity and outcome of studies and piloting. Flexibility of clearer priorities, but it may also risk design is increasingly being introduced in perpetuating a fractured, uncoordinated recent projects, such as India, Madagascar II, approach to environmental issues and and Sri Lanka. However, if the specifics of management.6 The solution, it seems, is to do the components and activities are to be kept both stand-alone and mixed projects and to flexible, it is all the more necessary to define focus on sectoral issues and agencies the process for determining future steps and according to the established priorities for the to ensure that the longer-term goals are environment in the country. explicit and tangible. The reliance on broad and abstract objectives goes some way toward Project complexity and assessment of risks explaining the frequently weak links between project objectives and their components. The relative complexity of a project is Similarly, the links between components and influenced by several factors, of which the improved environmental conditions and number of components and subcomponents management are weak in the majority of might be the most obvious. However, the projects: it is taken for granted that stronger most critical risk factor is the type of activity institutions automatically lead to better to be performed by the institution itself vis-a- environmental conditions or to better vis its capacity. Considerations such as environmental management and that there is number of donors, number of implementing no need to specify further how these agencies, number and type of sectors objectives are to be achieved. involved, and the degree of integration of the different components also affect how difficult 16 Environrment Departmnent Papers Challenges and Problems in Environmental ID the project will be to coordinate and thus to is in information systems. Dimensioning and implement. Many projects, for instance, preparation of master plans, training, particularly the mixed ones, have a large acquisition of computers, software, GIS, and number of components and subcomponents; similar activities in Bank environmental Chile, Madagascar, and Mauritius have projects have too often failed because the between 25 and 30 subcomponents each. The technologies were not appropriate to local mixed projects are also the ones that involve conditions and capacities. The problem is not the greatest number of sectors, implementing so much in the execution of the activities as in agencies, and donors: 11 donors other than absorption by local institutions and the World Bank are involved in the shortcomings in the actual utilization of such Madagascar project, 8 in Mauritius, 4 in systems for improved enviromnental Nigeria, and 3 in Ghana. As mentioned management. Box 5 summarizes the earlier, the cross-sectoral nature and relative experience with technical assistance for novelty of environmental issues increase the information management in Rio de Janeiro. amount of coordination needed, especially in the early stages of a project. The temptation to cover all bases immediately can be partly understood, considering that the In general, the risks identified in the project whole ID area is new and largely documents appear relevant and are strikingly underdeveloped. A number of early projects similar to the list of actual implementation (for example, in Brazil, Madagascar, and problems found in forms 590, supervision Mexico) were especially ambitious, with mission BTORs, and similar documents. They broad and comprehensive agendas that were include weak and young institutions, lack of to be implemented by young, inexperienced or discontinuity in government commitment, agencies. This is frequently mentioned as a opposition from vested interests, lack of lesson learned in the later projects. There is qualified staff, lack of knowledge of the issues something to be gained from an integrated involved, and uncertainties about approach, however. Thus, in Madagascar II a macroeconomic stability and counterpart great deal of effort was made to improve the funding. This, of course, raises questions as to coordination of donors, and the need for whether these issues simply have not been realistic objectives was clearly incorporated handled sufficiently well or whether these are into the follow-up phase. problems that are inherently impossible to avoid but could be minimized. There are signs that later projects are aiming to initiate changes on a smaller scale. Realism Average project cost is decreasing significantly, from an average of $53.7 million Projects are often designed to do too much too per project in 1990 to only $22.1 million per quickly and do not tailor the technical project in 1997. Few very large projects have assistance to specific local needs and been designed in the past three years, except conditions. This shortcoming typically results for Russia, and there is a more explicit from limited institutional analysis prior to acknowledgment of the need to start slowly project design and, mainly, from lack of and to increase the scale of a project only realism as to the actual capacity and when there is evidence that technical ownership of the institutions. One of the assistance has led to institutional classical areas in which such problems occur strengthening. Pollution Management Series 17 Environmental Capacity Building: A Review of the World Bank's Portfolio Box 5 Technical Assistance for Information Management in Rio de Janeiro The environmental agency in Rio de Janeiro, FEEMA, had, in addition to its administrative files, three main databases: for the monitoring department, for the pollution control department, and for licensing and public complaints. These systems were entirely independent of one another, incompatible because of software and hardware variations, and unavailable to the vast majority of staff. The Inter-American Development Bank (IDB) had made a $800 million loan for a pollution control project, of which $20 million was for institutional strengthening of FEEMA. Roughly $1 million was allocated to creating a modem network-based information system within the agency. One and a half years after project launch, only one part-time consultant was working in the agency on trying to understand the system and to prepare a master plan for system implementation. Two and a half years after project launch, only 20 computers had been bought, and system design had yet to be completed. In all likelihood, the remaining funds would have been spent in the same way if an alternative model had not been introduced in parallel. Aware of the critical need to create an information system that unified the various databases and was accessible to the entire agency, FEEMA's directorate requested support from the federal National Environmental Program (PNMA), which was financed by the Bank. PNMA funded a highly specialized information management specialist who spent 6 months within the agency, working closely with the three departments, teaching the fundamentals of information management to the key people, and working in a friendly atmosphere conducive to learning. All the directors and technical people gave their full political support. The three databases were quickly integrated, and an information management system was implemented. Despite its few resources, the technical assistance project was extremely successful; it was able to overcome political rivalries and resistance, training took place in parallel to delivery of results, and the main experts felt ownership of the work. The IDB information systems component, however, remains dependent on the large "traditional" technical assistance package and is still held up in the bidding bureaucracy. Design of indicators tie them to concrete actions and impacts and thus to progress indicators. Defining ID precisely is difficult, and the scope of activities in the projects under review Overall, the provision and design of indicators is broad. The qualitative, slow, nonlinear for these projects are weak. In only 12 of the nature of institutional development makes the projects is there any attempt to provide design and use of indicators for monitoring indicators, and of these, about 7 attempt to progress extremely difficult. For example, in quantify them in terms of number of laws the process of creating an information system passed, staff trained, and the like. A few do within an agency, it is easy to monitor the mention longer-term impacts and attempt to number of computers bought or of people incorporate them into the indicators and the trained, but evaluating usage of the system in monitoring schedule. The Sri Lanka project, in terms of quality of analysis and policy particular, is a good example of an attempt to recommendations is more complicated. The point to the expected and measurable longer- indicators almost invariably focus on term impacts of project activities. These quantifying steps in the implementation statements are always extremely qualitative process, while the longer-term objectives and but at least give a clear objective for the the impacts on institutional capacity and the exercise and an ultimate goal other than the environment are rarely considered. To add to specifics of implementing each subcomponent. this problem, when the objectives are stated in broad, vague terms, as is usual, it is difficult to 18 Environment Department Papers Challenges and Problems in Environmental ID Flexibility, innovation, and piloting Experience with incorporating lessons from previous projects has also been limited Since environmental institutions worldwide because of the relatively young age of the have their own specific histories and environmental ID portfolio. Lessons from ID sociocultural environments, each ID project in other sectors have been at least partly has its own peculiarities. The context within incorporated. The lessons most frequently which the project is being developed is also quoted in the SARs include the importance of unique: the degree of government ownership involving the private sector, local and political support, the existence of specific communities, and NGOs and the need for strategies for the sector, the severity of better project coordination, strong political envirornental problems, the level of expertise commitment, additional time and detail in of local staff, political and macroeconomic project preparation, emphasis on supervision stability, and similar contextual factors all call and monitoring, good databases, and training for a flexible design of projects, avoiding to ensure availability of qualified personnel. overly standardized approaches that may not More "radical" changes to conform the project suit individual situations. cycle and the modes of technical assistance to the specific needs of environmental ID may Experience with alternative modes of technical still be lacking. In Madagascar a good critical assistance or project design has been limited. review of lessons from the country's first A few projects, particularly the more recent environmental ID project is included in the ones, have introduced innovations in certain SAR and incorporated in the design of the components and pilots. In Sri Lanka, for second project (see Box 6). instance, various pilot initiatives have been attempted in different areas: NGO assistance Decentralization and participation by stakeholders in local soil conservation programs; an 18- month pilot exercise in use of a new Because a large number of environmental monitoring network design; an experiment problems are local, it is reasonable to assume with private entities in environmental that their management should be largely enforcement through a cost-effective process; carried out at the local level.7 In most and a pilot improved incentive system for staff countries, there has been a movement toward in the Central Environmental Authority. sharing environmental management Interesting experiences in other projects responsibilities with local governments. In include an NGO environmental action fund many developing countries, however, central for discrete environmental mitigation action environmental agencies themselves have projects (India); an application of a three- limited institutional capacity, and initial tiered organization involving the central efforts have focused on strengthening them, environmental authority, selected sector leaving local capacity in environmental ministries, and a local government, with the management as limited as before. The efforts aim of undertaking a joint work program and toward decentralization thus have to be strengthening the agencies' environmental accompanied by training and by involvement functions and cross-sectoral work (Morocco); a of relevant local stakeholders, such as pilot environmental information system to try representatives from the scientific community, to improve the flow of data in three regions universities, NGOs, professional associations, (Chile); various sectoral components such as a and major polluters. Fourteen projects in the pilot multidisciplinary approach to small-scale portfolio include activities aimed at mining (Ecuador); a pilot program for land strengthening regional and local and microwatershed management with environmental institutions and, in the case of community involvement (Ghana); and a pilot India and Uganda, even extend to the industrial waste minimization program preparation of state environmental action (China). plans (see Box 7 for India). Pollution Management Series 19 Environmental Capacity Building: A Review of the World Bank's Portfolio Box 6 Madagascar II ID Project: Lessons from the First Project The first phase of Madagascar's Environment Program was completed in 1996, and the fulfillment of the program's objectives is generally seen as satisfactory. Phase two followed immediately. Included in the development of the second project was a detailed analysis of the first one. The key lessons emphasized were the following: * Impact evaluation. No efforts had been made to evaluate the impact of the policy framework on the environment, nor had sufficient attention been given to evaluation of the costs and benefits associated with environmental protection activities, which is seen as critically important. * Environmental management strategy. Under the second phase, a regional and local approach to biodiversity conservation has been developed, to be complemented by agricultural and other income-generating activities. Environmental strategies need to put greater emphasis on rural development and smallholder land management on lands experiencing high population pressure. a Institutions. Building capacity in new institutions has taken more time than anticipated and has absorbed much of the effort of the program. However, it is clear that results have been achieved. The next step is to clarify the institutions' roles and mandates vis-a-vis other central government agencies. * Program scope. Although the integration of all activities supporting the environment into one program was a conscious choice made to foster priority-setting on a national scale and coordinate donor funds, it also created a project that was relatively complex for management by young institutions. The next phase will be kept integrated in the same way, but existing management mechanisms will be improved to ensure that the government's capacity to implement the program is not exceeded. * Sustainability. The financial sustainability of the country's environmental efforts has not received enough emphasis, and with 90 percent of the current cost of environmental management being paid by foreign development agencies, the long-term sustainability of some of the activities is uncertain. This is especially true for the conservation parts of the program. * Community involvement. Working with the communities concerned, in both the preparation and implementation of a component, is crucial. Ownership increases the speed of implementation, as well as the sustainability of the impact. With regard to participation, acceptance of development of priorities and strategies and in and compliance with environmental policies their implementation. Participation remains depend on the extent to which lower levels of weakest, however, in project design. Where government, industries, and other regulated an NEAP is prepared prior to the project, the entities perceive the goals and objectives of process has typically been claimed to be environmental policies as feasible and fair. participatory, but it is often difficult to find Consensus among stakeholders is therefore traces of acknowledged or planned fundamental in determining the ultimate participation. In later projects such as India, success of environmental policies, and Madagascar II, Malawi, Sri Lanka, and participatory mechanisms have to be in place. Zambia, the need for participation at all stages Participation is also critically necessary of a project is emphasized and appears to be because the public has a right to expect that carried through in project design (see Box 8). environmental policymakers will act Earlier examples of participation include according to publicly expressed efforts to establish a permanent environmental environmental objectives and that government planning process with close cooperation with officials will be able to implement policies. other agencies, NGOs, and the public There has been a marked development over (Honduras) and to work together with NGOs time in the attention given to participation in and other local groups in public awareness the environmental ID portfolio, both in the programs and education (The Gambia, Ghana, 20 Environment Department Papers Challenges and Problems in Environmental ID Morocco, and Uganda). In the investment community-based projects with a high degree components, there is also a move toward more of participation. Box 7 Decentralization Fourteen of the ID projects involve some form of decentralization of environmental decisionmaking or strengthening of state, municipal, or local capacity. In many instances, the decentralization components are miniature versions of countrywide projects, covering legislation, management, training, information management, and establishment of environmental protection agencies or similar institutions. However, they also offer the opportunity to address issues much closer to the source of a problem, to test approaches and technologies on a smaller scale, and to promote active community and stakeholder participation. In the earlier projects, such as those in Brazil and Mexico, the approach was still very centralized, with limited participation by stakeholders, and was barely described in the SAR. Brazil National Environment Project (Fiscal 1990) The initial design of the project gave primary attention to strengthening the recently established national environmental protection agency, IBAMA, and supporting federal conservation units. Since the midterm review evaluation in 1994, much of the project's focus has been on decentralized approaches to natural resource management. This emphasis has reinforced the existing support to environmental protection activities by state environmental agencies in three key ecosystems: the Atlantic Forest, the Pantanal wetlands, and the coastal zone. Mexico Environmental Project (Fiscal 1992) More than in the case of Brazil, the Mexico Environmental Project was fundamentally aimed at improving the environmental management capacity of the federal environmental agency, SEDUE. The project contained a component to test decentralization of front-line pollution control and natural resources management in a few states. An investment plan was to be developed for each of the five states selected, in cooperation with the central agency; the plan would include technical assistance to refine organizational structure, training, information technology, and implementation of substantive projects. Progress on effective transfer of front-line functions would be monitored by a coordinating group, and disbursements for investment projects would be conditional on agreement on a detailed action plan for the state, on mechanisms for transfer of services described in the action plan, and on the state's commitment to cover recurrent costs. In later projects, such as that in India, the focus has shifted more to the community level, with a much stronger emphasis on participation and piloting. (See also the case of Zambia, described in Box 8.) India Environmental Management (Fiscal 1997) The Environmental Management project involves strengthening the regional offices of the Ministry of Environment and Forests and the Gujarat State Department of Forests and Environment. Three subcomponents are designed to promote the decentralization of environmental management: a national environmental awareness campaign that includes decentralization to the state departments of environment, linking it to community-based environmental action campaigns; a review of the established environmental brigades and support for an accelerated five-year program to establish and train new ones; and creation of an Environmental Action Fund to support community-based environmental mitigation projects to be carried out by NGOs. Pollution Management Series 21 Environmental Capacity Building: A Review of the World Bank's Portfolio Box 8 Stakeholder Participation: Malawi and Zambia The projects in Malawi and Zambia are good examples of the stronger emphasis placed on participation and community-based management in a number of the more recent projects. Since both are new, the evaluation is based on the preparation process and the design of the projects. Both projects followed NEAPs that were produced by highly participatory processes, involving the government, the private sector, NGOs, and traditional leaders. Malawi Environmental Management (Fiscal 1997) All four components of the Environmental Support Program (ESP), of which the Bank's Environmental Management project is one, have strong community aspects, particularly the community-based environmental management component. The focus is on gradually transferring management of natural resources away from the government to local communities, which has already begun on a pilot basis in parts of the country. The aim of the component, which will fund small-scale environmental activities originating in communities, is to build community capacity in both urban and rural areas. The component is divided into two stages: in the first, community environmental management plans will be prepared by environmental management committees; in the second, the management plans will be financed from a "microprojects" window. Zambia Environmental Support Program (Fiscal 1997) Zambia's NEAP was the first plan to identify and bring together the most influential actors in the environmental field. Key issues include (a) the promotion of traditional institutions and community participation to create a demand-driven culture for more sustainable use of natural resources and (b) the gradual transfer of primary responsibility for environmental conservation and management to the people. A workshop that actively involved the key stakeholders was organized to maintain momentum in the consultative process. One component establishes a pilot environmental fund to help finance community-based projects. Others aim to strengthen community environmental management by actively involving communities in environmental planning, decisionmaking and implementation, and environmental education and awareness. Although we understand that decentralization all relevant parties-governments, polluters, and, in particular, participation are and affected communities. fundamental aspects of capacity-building efforts, the limited experience of the portfolio Project sustainability does not allow us to unequivocally state that the Bank's environmental ID projects tend to The activities financed by a project need to be be more successful when decentralization or sustainable in the long term. If they are not, participation are incorporated in project one can question whether real institutional design. development has taken place at all. Sustainability of actions financed in ID That does not weaken the case for strongly projects is indeed a reason for concern because supporting and promoting both issues in these projects are rarely one-time capital Bank-financed projects. In addition to ample investments. The results achieved and the evidence in other reports (see, for instance, The activities initiated have to be continued by the World Bank Participation Sourcebook, World borrowers and financed by them without the Bank 1996c), participation is a basic factor that Bank's financial support once a project is introduces transparency in the decisionmaking completed. Project sustainability is therefore process, accountability of decisionmakers, and closely connected to issues of financing and a much better exchange of information among borrower ownership. The process of implementation will be the best indicator of 22 Environment Department Papers Challenges and Problems in Environmental ID the future sustainability of a project and the attracting and retaining qualified staff, and willingness of the borrower to keep the political commitment. Efforts to lessen the activities going. risks include minimizing new structures and staff, ensuring participation and capacity Earlier projects do not appear to have paid building at the comununity level as a way of sufficient attention to sustainability issues, and taking some of the burden off the government less than half of the SARs address the question (Malawi), funding recurrent costs and salaries of sustainability directly. Exceptions among on a declining basis through implementation the early SARs are perhaps the Poland and (Madagascar II, Sri Lanka) or from the Bolivia projects. The newer projects are more government budget from the start (Poland), likely to include a separate section discussing and raising revenues through cost recovery sustainability, although here too it is not and fees (Sri Lanka, Trinidad and Tobago). always clear what is being done to address the Box 9 summarizes experience with creating problem. Key concerns include integration of funding mechanisms to ensure the natural resources management aspects into sustainability of actions. macro and sector levels, recurrent costs, Box9 Sustainability and Funding of Environmental Work The financial viability of environmental projects past the closing date is a general worry, and few attempt to come up with new or innovative ways to ensure funding for continued activities. An exception is the establishment of funds or credit lines, which are found in quite a few projects and are often tied to investment and sector activities. Most of these funds are found in the more recent projects-Chile, Ghana, Honduras, India, Nigeria, Russia, Sri Lanka, and Zambia. The following are examples of such funds in the areas of natural resource and pollution management. Predominantly Natural Resource Management Ghana Environmental Resource Management (fiscal 1993). The land and water management components include a development fund to provide incentives for farmers to adopt improved land management practices in the short run until long-term benefits become apparent. Sri Lanka Environmental Action I (fiscal 1997). A community initiatives component is designed to involve communities in implementing demonstration environmental activities through participatory methods and to help train them in participatory work. The fund will seek proposals from local government institutions, commnunity groups and NGOs, and research organizations, for amounts between $5,000 and $100,000. It will address priority areas of the updated NEAP, including improved land and water management, solid and domestic waste collection, and environmental education and mass awareness. That there was a demand for the fund was established through consultations between the ministry and NGOs. Eligibility criteria include cost-effectiveness, ability to mitigate environmental problems and poverty, replicability, and ability to meet maintenance costs on completion of the activity. The initial focus will be on proposals emphasizing training for skills to prepare and manage activities. (continued) Pollution Management Series 23 Environmental Capacity Building: A Review of the World Bank's Portfolio Box 9 (continued) Zambia Environmental Support Program (fiscal 1997). A pilot enviromnental fund is designed to provide incentives to communities for adopting best practices in local resource management through a matching grant facility. This will be linked to the community environmental management component. Grants for studies of key natural resource management and environmental issues will also be made available through the funds. Pollution Management Honduras Environment Development (fiscal 1995). The project establishes a line of credit for environmental investments by microenterprises in connection with a pilot municipal and community-level environmental investment component. The aim of that component is to assist in the development of capacity and instruments for management of a larger municipal and community-level environmental investment portfolio at the national level. The credit line will help finance preinvestment feasibility studies, followed by projects in ecotourism, solid waste collection and recycling, and pollution abatement for cottage industries. Three NGOs will act as financial intermediaries. Russia Environmental Management (fiscal 1995). The National Pollution Abatement Facility (NPAF) is designed to help finance a portion of the investment cost of commercially viable "win- win" resource recovery and pollution abatement projects. Funding for such investment has been hard to find due to a number of uncertainties, including unwillingness of local and foreign banks to provide medium-to-long-term loans. The Bank funds can help lower transaction costs and insecurity for other foreign investors. The NPAF would be authorized to sell or syndicate the loans to local commercial banks on a nonrecourse basis, which would have the advantage of minimizing the government's exposure to risk and would revolve the resources of the fund more rapidly. Involvement by local banks in the financing of projects will be encouraged. The fund will also function as a framework through which resources can be channeled from the Global Environment Facility (GEF)-the phase-out program for ozone-depleting substances-and from multilateral and bilateral agencies to appraised environment projects in Russia. In addition to the seven factors identified institutionalize those changes takes much above, the Bank's routines and its project cycle longer than the duration of a single project" clearly affect the design of a project. Because (Boyle 1998). This requires a model different of limited experience with ID projects, from that offered by the current project cycle. particularly in the environmental field, More emphasis should be placed not only on "classical" Bank-style projects have been the implementation and supervision phases of employed for ID objectives. With the a project but also on greater flexibility, increased realization of the importance of participation, piloting experiences, multiphase well-prepared institutions for carrying out programs, and mainstreaming. Recently, projects and programs in any country, the there has been a move toward using such question arises: How can the World Bank approaches in the Bank in environmental and project cycle be modified to produce better other projects (see Box 10). The introduction outcomes in ID projects? "The of adaptable lending may be a further synchronization of project disbursement with promising mechanism for ID projects. the time it takes to bring about institutional However, as holds true for any organization, change has been a neglected area of project the Bank needs time to institutionalize these design. An average Bank project is completed new experiences (see Margulis and Vetleseter in 6-8 years. Organizational change in 1996b). institutions does not take that long, but to 24 Environment Department Papers Challenges and Problems in Environmental ID Box 10 The Program Approach: Longer-Term Perspectives in Institutional Development Several enviromnental ID projects have been developed based on the recognition that ID is a long-term process and that capacity should develop gradually through programs and building- block projects. Madagascar Environment Program I (Fiscal 1990) and II (Fiscal 1997) Madagascar's fifteen-year Environment Program is based on a NEAP prepared in 1988 as a collaborative effort between the government, the Bank, NGOs, and other donors aiming to strengthen the country's management of natural resources in three five-year stages. The first phase focused on creating a proper policy, regulatory, and institutional framework. The second, now being implemented, will consolidate programs started under the first phase, and the third will strive to mainstream environmental concerns into macroeconomic management and sector programs. Both the NEAP and the first phase were developed with a large input from external sources because of the low capacity in the country, but by the time the second phase was designed, capacity had been so strengthened that national institutions led the preparations, in a country-driven participatory process. Russia Environmental Framework Program (Fiscal 1995) The Russian Environmental Framework Program was developed by the Bank, in a role of a facilitator, together with the Russian government and bilateral and multilateral donors. It is intended to be an overarching framework for incorporating environmental and natural resource management concerns directly into the economic, social, and political adjustment process at the federal and regional levels of government. By strengthening and streamlining institutional structures, policy and strategy formulation and implementation, management systems, and financial delivery mechanisms for environmental and natural resource management, the program attempts to set priorities and coordinate activities in the sector funded by a number of different sources, including the Bank. The Environmental Management Project (see Annex A) is implemented under the umbrella of the framework program. Zambia Environmental Support Program (Fiscal 1997) The objective of the Environmental Support Program is to mainstream environmental and natural resources management at the national and local levels. Based on the NEAP and the country assistance strategy, as well as on the government's development strategy, the Zambia program is designed as a long-term multidonor effort to finance environmental projects and to ensure that the concerns are dealt with in a holistic manner that includes sector ministries and local communities. The active involvement of the various stakeholders in program formulation has been emphasized to build ownership, facilitate implementation, and guarantee that the projects are in tune with local capacity. The support is seen as the first stage in a long-term commitment to improving environmental management. It is designed to allow for flexibility in implementation and responsiveness to emerging priorities by keeping the scope and ambition limited to piloting activities before developing full-fledged national activities. Lessons learned in this program will be incorporated into a second phase of NEAP implementation, continuing the strengthening of institutions and interventions in priority areas. Some other projects are explicitly designed to be first steps in prolonged assistance to strengthen environmental management in a country; they seek to test pilot activities before launching larger investment components. Among them are the Pakistan Environmental Protection and Resource Conservation project (1992) and the Sri Lanka Environmental Action I project (1997). In addition, the government of Malawi has developed an Environmental Support Program that is intended as an umbrella framework for incorporating strategies, policies, and priority programs to address environmental problems. The program covers the actions of a number of actors and donors, including the Bank's Malawi Environmental Management project (1997). Pollution Management Series 25 Environmental Capacity Building: A Review of the World Bank's Portfolio Project Implementation excludes the seven youngest projects, which have been in effect for less than a year. The environmental ID portfolio is a young one, and only the projects in Poland and Relative performance Mexico had been closed at the end of fiscal 1997. With most projects still in the middle or Operational Services Department (OPR) start-up phases of implementation, it is ratings, recorded in the Annual Review of necessary to be very cautious about coming to Project Performance (ARPP), indicate that the strong conclusions about their implementation Bank's environmental ID portfolio performance or longer-term impact. There performance has improved in the past three are, however, some interesting points and years in relation to the Bank's portfolio as a valuable lessons based on experience so far, whole, to all Bank projects stated to have and some conclusions can be drawn from the environmental objectives, and to the whole development of the portfolio in the past few Bank portfolio of technical assistance projects years. Our review of project implementation (see Table 4). Table 4 Comparative performance of environmental ID projects (percentage of problem projects) FY 94 FY 95 FY96 Item IP I Do IP DO IP Do Environmental ID 31.3 6.2 19.0 9.5 14.3 5.0 All Bank projects 18.4 13.4 17.8 11.5 16.6 11.5 Bank environmental projects 29.6 0.0 23.1 2.6 19.1 2.1 Bank technical assistance loans 20.3 9.8 20.0 14.3 17.8 12.7 Note: IP, implementation progress; DO. development objectives. "Problem projects" are those rated unsatisfactory or highly unsatisfactory for IP, DO, or both. There were 16 environmental ID projects in fiscal 1994 and 21 in fiscal 1995 and in fiscal 1996. As Table 4 shows, during fiscal 1994-96 the The ratings on the likelihood that projects will performance of the environmental ID portfolio meet their development objectives (DO) have improved significantly compared with other stayed roughly level, at considerably lower relevant categories of Bank operations. Most rates of problem projects than either the Bank notable is the decline in the number of projects portfolio average or the technical assistance rated unsatisfactory on implementation loans. Bank environmental projects have an progress (IP), from 31.3 to 14.3 percent, ending even lower number of problem projects on the up lower than the figure for the Bank as a basis of this criterion, but a trend is not yet whole. The drop in the other categories of very clear. projects was at most 2 percentage points during the same period. It is interesting to Keeping in mind that the environmental ID note that the projects which operations portfolio consists of a relatively small number departments (as distinguished from the of projects, it still appears that portfolio Environment Department) identify as having performance for these projects is improving as environmental objectives have seen a similar they mature and as lessons are applied from improvement. In 1994, this category contained older projects such as those in Brazil, a considerably higher number of projects with Madagascar, Mexico, and Poland. However, implementation problems (29.6 percent) than the development objectives for these projects, the Bank average (18.4 percent), while two especially the ID ones, are both long term and years later the two categories were much difficult to measure. As noted, it is as yet closer (19.1 and 16.6 percent of problem early to make strong statements regarding the projects). ultimate impact of these projects on the basis of the ratings. 26 Environment Department Papers Challenges and Problems in Environmental ID Performance of the environmental ID portfolio course of project implementation, and the projects there were among the earlier projects. Currently, none of the 21 projects started before fiscal 1997 is considered at risk of being As has also been found in reviews of other unsuccessful in terms of being rated sectors, there appears to be a clear pattern unsatisfactory on either implementation whereby ID projects are more likely to face progress or development objectives. However, problems toward the middle of the a number of projects were recently updated implementation period (Table 5). from unsatisfactory to satisfactory, including those in Mexico, Morocco, Nigeria, and The Brazil and Mexico projects received Russia. In all, 10 projects have experienced unsatisfactory supervision ratings in the ARPP serious implementation problems, 3 of them three or more times and Nigeria and Morocco, (Brazil, Mexico, and Nigeria) over more than twice. Six projects received one unsatisfactory one period. Those three countries experienced rating, and 11 projects have always been major macroeconomic or political crises in the satisfactory. Table 5 Environmental ID projects rated unsatisfactory, by project age Unsatisfactory or highly unsatisfactory rating on Year of Number of Number of IP or DO implementation projects projects (Percent) 1 21 1 4.8 2 21 3 14.3 3 20 5 25.0 4 16 5 31.3 5 13 2 15.4 6 ormore I5 0 0.0 Few projects are considered to be doing really inadequate Bank training of counterparts in well. Projects in Korea (fiscal 1994) and Benin these procedures, improper assessment of are rated highly satisfactory on development local capacity, or actions by the government's objectives, and the recently completed Poland own bureaucracy, which the Bank has little project was, in the end, considered highly capacity to influence. (Examples are local satisfactory, both in its implementation and in procurement rules, regulations on importation meeting its development objectives. The fiscal of equipment, and the like.). Since the roles of 1993 Korea project and the project in The the parties and the incentives they face differ, Gambia were considered highly successful. we distinguish some of the problems as The latest forms 590 rate most projects originating separately from Bank and from satisfactory on implementation progress (18 government failures. It is not the intent here out of 21) and development objectives (16 out to make an exhaustive analysis of all problems of 21). that occur in the implementation of environmental ID projects but only to Common implementation problems summarize the common problems encountered. Bank-financed projects are a joint effort by governments and the Bank, and the problems Borrowerfactors affecting implementation encountered during implementation can originate from either party. For instance, Political and economic environment. Examples of complex Bank procedures may interfere with problems are national political issues and implementation progress as a result of leadership changes (Nigeria); parliamentary Pollution Management Series 27 Environmental Capacity Building: A Review of the World Bank's Portfolio ratification procedures (Benin, Trinidad and agencies (Brazil, Indonesia, and Madagascar), Tobago); election periods that affect the personality issues between ministers and the national agenda (Benin); delays in meeting project coordination unit (Honduras), and effectiveness conditions (Russia); failure of the executive agency to obtain macroeconomic difficulties (Brazil, The adequate cooperation from participating Gambia, and Mexico); and laws being stalled agencies (Morocco) are examples of such in the legislature (Bolivia). Such problems resistance and lack of cooperation. The cross- clearly interfere with all sectors in the sectoral nature of environmental issues and economy and thus take precedence in projects increases the need for coordination government agendas. Many SARs foresee and exposes rigidities more readily than is the periods of political and macroeconomic case in other sectors. Such problems have changes in the course of project been encountered in the early phases of implementation, but it is difficult to judge ex several projects but have typically have been ante whether the changes warrant more ironed out in the course of project cautious actions by the Bank or governments implementation (Brazil, Madagascar). regarding the project. Bankfactors affecting implementation Lack of political will and counterpartfunding. It is clearly very difficult to evaluate identify the Inadequate stafffor supervision. ID projects are level of political support on the basis of project highly labor-intensive and typically require documents and supervision reports alone, but closer and more intensive supervision than this factor is one of the most frequently stated other types of projects. This and other reasons for unsuccessful or unsustainable portfolio reviews indicate that Bank project implementation and can be especially management clearly does not provide detrimental to ID projects. Lack of adequate resources for supervision. The main counterpart funding is perhaps the most reason is Bank incentives that have tended to obvious manifestation of lack of political will. give more emphasis to project design than to Even though this can result from "legitimate" implementation and results on the ground. financial problems (e.g., in periods of Among the few exceptions is the structural adjustment with tight budgetary Environmental Management Project in Poland, constraints) or from bureaucratic difficulties, which significantly benefited from the especially when too many government willingness of the regional management to agencies are involved, strong political support allocate adequate resources for supervision helps minimize such difficulties. Lack of during the entire duration of the project. This counterpart funding has occurred in several was one of the key factors contributing to environmental ID projects, including those in successful project implementation and Bolivia, Ghana, Nigeria, Trinidad and Tobago, completion. and Uganda. In many cases, the project money is used to cover recurrent costs, Task manager turnover. The average task indicating a lack of government resources or manager turnover on environmental ID will to follow.up once the project is closed, projects is 2.2 years. Where long-term which would threaten its sustainability. dialogue and commitment need to be established between Bank and borrower, Institutional "rigidity" and tensions. Public frequent task manager turnover is clearly sector laws often force actions financed by a negative for a project. It may be a sign of project to go through lengthy bureaucratic instability, it can interrupt continuity, and procedures, with little flexibility for expediting some time is usually lost before the new task solutions. In addition to such rigidities, ID manager is fully on board with respect to all projects often face resistance from staff within project initiatives. In a review of the the main environmental agencies and from biodiversity portfolio, a correlation was found other institutions that have to do with between the frequency of task manager environmental issues. Lack of cooperation turnover and problem projects (see Annex D). with outside consultants (Brazil), lack of A similar link has not been condusively found communication and cooperation between 28 Environment Department Papers Challenges and Problems in Environmental ID with environmental ID projects, even though work full time on the tasks (as in The Gambia the average task manager turnover is close to and Morocco), so outside experts may be the 2.1 years for biodiversity. Because of the needed. An important factor cited in the small number of ID projects, conclusions success of the Poland project was the strong should be drawn with caution. emphasis on ensuring effective local capacity to carry out Bank procurement and Complex Bank procedures. The Bank has always disbursement procedures (see Box 11). been strongly committed to the use of competitive procurement procedures, which Otherfactors affecting project implementation can be relatively complex for governmental institutions in developing countries. When the Delayed effectiveness. In a high number of host agency has no previous experience in projects, there has been a considerable delay in working with the Bank-the case with nearly effectiveness, often resulting in disbursement all the projects under review-procurement lags (Benin, Brazil, Madagascar, Morocco, and and disbursement procedures can cause Nigeria). Our review suggests that there is no complications and delays without well- automatic or necessarily strong link between planned, effective support for developing effectiveness delay, or a slow start, and these skills (as in China, Honduras, and subsequent failure to reach the project's Poland). development objectives. Both can be part of a learning or consensus-building period that One way of ensuring such support is to will later be to the benefit of the project. The provide an adequate number of qualified ultimate outcome will depend on the cause of experts or to train local people in the necessary the delay and the measures taken to improve Bank procedures. Local staff are often not the situation. available (as in Indonesia) or are not able to Box 11 Procurement and Disbursement in Poland The design and implementation of Poland's Environment Management Project included an extremely strong emphasis on the development of procurement and disbursement skills. The same procurement specialist participated in the Bank's preappraisal and appraisal missions and in all main supervision missions. During the preparation and start-up phases, Polish specialists received extensive procurement and disbursement training and advisory support. With experience, the Polish personnel responsible for procurement and disbursement became highly effective in using competitive procedures and efficient disbursement methods for a wide range of projects, and they also provided advisory support to other ministries concerning these issues. They became skilled in the preparation of terms of reference and technical specifications for the procurement of goods and services. This process included not only personnel from the project implementation unit and local implementation units but also a wide range of Polish specialists from local governments and applied research institutes. These personnel rapidly learned to make practical assessments of budget tradeoffs and became adept at negotiating with suppliers. The effective use of international competitive procurement procedures by Polish specialists for the Bank-supported project resulted in significant cost savings on a wide range of procurement actions. These savings were reprogrammed by the Ministry of Environment and allowed for a significant expansion of project-supported activities for air quality management and water resources management. Pollution Management Series 29 Environmental Capacity Building: A Review of the World Bank's Portfolio Project too complex. Possible problems related properly assess such capacity ex ante has to be to complex project design have been discussed attributed to both the Bank and governments above. The degree of complexity of any and indicates lack of realism and project is a function of local capacity to absorb overambitious design. As noted previously, and implement the proposed activities, which both governments and task managers often can be difficult to evaluate prior to have incentives, before project approval, to implementation. Given that the agencies minimize the disclosure of eventual involved are generally new, weak, or both, weaknesses. Administrative weaknesses have complexity has been a source of difficulty for caused delays and lack of project coordination several projects (Brazil, Morocco, Pakistan) (Mauritius, Mexico), lack of communication and has in a number of cases led to and of awareness of the objectives of the simplification and restructuring of the project (Indonesia), failure to prioritize projects. The key in these cases, of course, is objectives and initiatives (Pakistan), poor flexibility on the part of all agents involved, scheduling of overseas training and including the Bank (see Box 12 for the inappropriate staff assignments (China), Brazilian experience). absence of detailed programming of activities (The Gambia), lack of ability to identify Lack of institutional capacity to implement the overseas training opportunities (Korea), and proposed actions. The underlying problem in poor monitoring capacity (Mauritius). failure to handle adequately most of the issues Shortages or unavailability of qualified staff is outlined above is weak institutional capacity. another critical problem and can be attributed This may appear circular, since it is precisely to a lack of local experts (Indonesia) or to the weak institutional capacity that environmental failure of training programs (Pakistan) but ID projects are designed to address. In this also to low salaries and the incapacity to retain context, the weak capacity is relative to the the right people full time (The Gambia, tasks involved in the project. The failure to Morocco). Box 12 The National Environment Project in Brazil As mentioned in Box 7, the Brazil National Environmental Project (NEP) originally emphasized the strengthening of central government agencies. Following the midterm review, $60 million of the Bank loan was reallocated to support more than 90 resource management projects administered by municipal governments, often with the participation of NGOs and other local groups, in the 20 states that were able to prequalify for funding-in some cases by adopting new legislation or introducing other environmental management improvements. Experience to date suggests that when municipal governments clearly assume ownership of local environmental projects and are able to create good partnerships with other stakeholders, the initiatives take off and are likely to be both replicable and sustainable. NEP funding has also permitted communities to implement or scale up environmental projects that have been underdeveloped because of limited local resources. The experience at the federal level, by contrast, has been mixed. IBAMA has benefited through the establishment of a state-of-the art remote-sensing environmental mapping center and a national environmental information system and has improved the management of federal protected areas. However, efforts to reorganize and enhance the institutional effectiveness of the agency have been largely unsuccessful due largely to institutional resistance within IBAMA. After the midterm review, overall coordination of NEP was shifted to the newly created Ministry of Environment, and this contributed to a significant improvement in project performance. Since 1994, the project has also supported a range of institutional strengthening measures for the Environment Ministry. Experience from this project indicates a need for both persistence and firmness on the Bank's part, as well as close supervision and flexibility, as was the case with the substantial reallocation of project resources and implementation responsibilities in midcourse to support decentralized interventions. 30 Environment Department Papers Challenges and Problems in Environmental ID Endnotes 5. "Blueprint" approaches are not used in project costs, they are given less attention the same generalized way in ID projects than the larger investment components. as perhaps in the Bank's macroeconomic Examples include the Sao Paulo stabilization programs. Indeed, since Industrial Pollution Control Project, there is not even enough dissemination of where disbursements were not directly experience of environmental ID projects related to the capacity-building within the Bank, the term blueprint may components, and the two India Industrial be inappropriate. However, as suggested Pollution Control Projects, where the later in the paper, projects are prepared institutional components were by teams without sufficient knowledge systematically ranked as less satisfactory about the institutions and organizations than the investment components. It may that they propose to strengthen and be worth exploring this issue in future without time for solid interactions with reviews. counterparts. Thus, very similar actions end up being proposed in inappropriate 7. Decentralization reduces information individual contexts. Classical examples costs (residents of a jurisdiction know are acquisition of hardware, training of their own priorities best), and it allows personnel, changes in laws and environmental quality and policy regulations, and the like in contexts instruments to vary across regions where institutional responsibilities are according to priorities and budgetary unclear, staff are not sufficiently constraints. But decentralization in motivated, budgets do not cover even environmental policy is a mixed blessing operational costs, and project resources for several reasons. Local governments are not sustainable. may not set environmental standards high enough or may not wish to properly 6. We have not reviewed the larger green enforce them; decentralization may lead and brown investment projects that to tax exporting and can make it difficult include an institutional strengthening to internalize externalities created by component. As with the mixed projects, spillovers; and local governments often the institutional components of acquire administrative responsibilities investment projects tend to be more without having adequate powers to raise focused, in that they support the revenues or levy their own taxes. Finally, departments in the environmental decentralization may make it impossible agencies directly responsible for the to take environmental actions on the investments. However, since the required scale, which, for the most institutional components typically significant problems, is generally larger represent only a small fraction of overall than the territory of a municipality (Margulis 1998). 31 Enviromnent Departrnent Papers 32 Environment Department Papers 4 Lessons and Recommendations This paper briefly reviews Bank experience take place. This has led to a huge allocation of with environmental ID projects, identifying money when the real need was for attitudinal the most important issues and problems and cultural changes. The Bank has not associated with their design and formed a core team of institutional specialists implementation. Many of these problems are in the environmental field, nor does there common to other sectors, but some are appear to be a good network within the peculiar to environment. Since the portfolio is community of practice in this area. relatively young and small, it is too early to draw strong conclusions and lessons from How much time it will take the Bank to implementation, and it is not easy to detect change the incentives given to task managers clear trends on a number of issues. and the tools used in environmental ID Nevertheless, some trends and lessons can be projects is important because the Bank may be distinguished, and they point to a few key losing comparative advantage in supporting recommendations that may eventually help ID objectives. Money is not the issue in ID; of improve the design and effectiveness of new more importance is that task managers have and second-generation projects now under only a limited understanding of the political, preparation. (See Annex E for a summary of economic, and sociocultural factors at the root project activities.) of institutional setups and that the Bank's cross-country experience in this area has been Key Lessons poorly disseminated inside the institution. The Bank's long-term relationship with The Bank has realized that lack of institutional governments is an obvious advantage, but it capacity is one of the key obstacles to the still has to make up for other problems. preparation and implementation of environmental policies in developing Like the institutions that environmental ID countries. This has led to the development of projects support, the Bank needs time to a large number of environmental ID projects change. There is undeniably an ongoing over the past six years. Although most such learning process in the Bank with regard to projects are considered "satisfactory" by the environmental ID, and lessons have been Bank's ARPP system, when the outcomes in incorporated into both the implementation of terms of improved environmental the older projects and the design of new ones. management and improved environmental conditions are set against the resources We divide the key lessons of this review into allocated to these projects, the results have four sets of issues: those having to do with the often been frustrating. One reason is that the ID process and project features; those related Bank's perception of the vital importance of to the incentives given to task managers; those institutional strengthening has not been having to do with the tools available for matched by a parallel understanding of the environmental ID; and those pertaining to processes through which institutional changes governments. Pollution Management Series 33 Environmental Capacity Building: A Review of the World Bank's Portfolio Process Issues Incentives for Task Managers Government institutions are protective and The internal Bank incentives for task managers conservative and are typically resistant to reward the approval of projects by the Board change. Even when there is no resistance, and so favor project preparation to the poor working conditions and low staff detriment of implementation and on-the- motivation frequently lead to limited ground results. Incentives are also geared receptivity and commitment to capacity- toward larger projects and quick building efforts. This is a chicken-and-egg disbursements. Such incentives promote situation-improving the motivation of staff is overambitious projects that overestimate the one of the main goals of ID, but ID cannot real implementation capacity of local agencies; succeed without involvement and minimize the potential prevalence of participation by staff-and is one of the main inappropriate macroeconomic or political challenges in ID. conditions, lack of political support for the project, and absence of coordination by the ID needs more time than typically anticipated various agencies and stakeholders; and to achieve results and more involvement and impose a time frame for task managers effort from the Bank than any other form of incompatible with that required for ID projects assistance. In most cases, five to seven years (see below). will not be sufficient to ensure the required cultural changes and a lasting impact on Tools Available for Preparing ID Projects environmental capacity or on environmental conditions. Since ID is essentially a process of cultural change, the kind of project needed to promote Too much money may be counterproductive it has to be different from those that the Bank to ID objectives, since large inflows of typically supports. The Bank's project cycle resources distort the normal modus operandi has proved inconsistent with the flexibility of institutions and may create conditions that needed for a gradual capacity-building are not sustainable. Also, project process. The adaptable lending approach is a implementation units generally administer timely change that may resolve or minimize budgets that are far larger than those of most many of the problems related to the rigid departments within the same beneficiary structure of traditional Bank projects. institutions, often stimulating the creation of parallel structures which fragment, rather than The Bank's current approach to technical strengthen or integrate, institutions. assistance, whereby its own policies are implemented globally, is often ineffective The stated objectives of environmental ID because country needs vary so greatly. projects are consistently vague and general. Technical assistance requires country- and More specificity can be introduced only when sector-specific approaches. Outside-funded there is clarity about the concrete problems technical assistance may temporarily help facing the institution. Since such clarity is increase the political clout of an agency, frequently absent, stand-alone environmental maintain the size of its budget, and raise the ID projects are more prone to suffer from level of staff expertise, but these advantages vague objectives. By contrast, when ID is in may vanish when assistance is discontinued. support of investment projects, specific ID needs are automatically identified. Government Issues An additional consequence of a vague Without ownership and political support, ID definition of project objectives is that projects cannot achieve much. External monitoring of implementation is typically assistance can help weaker institutions define inadequate. Efforts are primarily devoted to and perform their legal assignments, but monitoring tasks executed (inputs), not the governments and beneficiary agencies must skills absorbed (outcomes). 34 Environment Department Papers Lessons and Recommendations have political motivation to ultimately lead the roles and responsibilities of institutions when process "from the inside." these are initially ambiguous. Since unclear institutional responsibilities and functions are Because countries' often see the World Bank's in turn largely a consequence of lack of presence in the environmental field as a broader policies and strategies, environmental validation of their own efforts towards ID should support the preparation of such environmental protection, the existence of a policies and strategies at the outset of projects. Bank-financed environmental project matters In countries that lack environmental policies more than the actual outcomes. and strategies and have weak institutional capacity, the temptation to "do everything" Governments must have a clear idea as to must be resisted by identifying priorities and what they expect when requesting assistance phasing in actions accordingly. for ID. Thus, there must be in place strategies and priorities for the environment, as well as Ensure that governments have ownership of the broader ID strategies for the public sector, so projects and arefully committed to them. Political that efforts under environmental ID projects support is fundamental for the success of any are not made in isolation from other project. Government agencies involved with government initiatives and so that they fit into ID projects should know precisely what to and help support established sectoral policies. expect from such projects so that they can be (This integration has often been attempted fully committed to them, while leading the through NEAP exercises.) In fact, in most process of institutional change. They have to cases ID efforts address the definition of such involve eventual beneficiaries and interested policies and strategies simultaneously with parties, and the public more generally, so as to capacity building, which delays and ensure or introduce public pressure and complicates the process. In the enviromnent accountability of institutions. The Bank must field, in particular, government policies are leave substantive tasks to be performed by often driven by outside forces rather than by beneficiary institutions, engaging them in the genuine demand for change. process and sending the signal that technical assistance does not have a zero opportunity Recommendations cost. Given the relatively poor knowledge of Change the type of technical assistance. Technical institutional cultures, the existing perverse assistance is successful only if skills and incentives for task managers, the poor internal technical expertise are actually absorbed by dissemnination of lessons from ID projects in beneficiary institutions. While lessons from many countries, and its own rather inflexible other countries and contexts are always useful, project cycle, the Bank may not presently have the Bank should tailor its efforts to country a strong comparative advantage in providing conditions. The Bank must improve its technical assistance in environmental ID.8 This knowledge about specific national institutions, can be changed, and some of the problems making greater use of resident missions and may require relatively little effort and time to local expertise from universities and selected overcome. Much depends on Bank local consultants. Outside consultants and management's understanding of the problems consulting firms that do not have the time and and on its willingness and capacity to act. incentive to interact with and gradually transfer skills to local institutions will face The following are some key recommendations resistance and should be avoided. To ensure for Bank management, governments, task that technical assistance actions are managers, and other agents involved in sustainable, the longer-term impact of projects environmental ID projects that may help should be taken into account in the improve results. performance evaluation of staff and of the projects themselves. Clearly define what is to be strengthened. ID projects should initially aim at clarifying the Recognize that ID requires a long-term mutual commitment and that the Bank's project cycle must Pollution Management Series 35 Enviromnental Capacity Building: A Review of the World Bank's Portfolio adapt. New operating procedures and new environmental institutions, with small and lending instruments have to be introduced for slow disbursements, and without many dealing more effectively with the process obvious and visible immediate changes. This nature of ID. Such new approaches need to be means spending more resources (time and more flexible, changing the rigid project cycle money) in learning about the internal culture into a more process-oriented effort. Projects of the institutions that are to be strengthened, should support longer-term programs and interacting with staff, and becoming immersed pilot initiatives. They should be designed as a in the process in order to ensure an effective series of "building blocks," with the specific transfer and absorption of skills. Task objectives being defined as the project managers should also have incentives to develops, as institutional capacity is gradually design small rather than large projects. They accumulated, and as the Bank increases its should have the time, the objectivity, and the knowledge of the specific institutions incentives to realistically assess the involved. Much greater emphasis must be government's capacity and effective interest in placed on implementation and thus on a project, so that the incentive is not to "push" supervision, rather than on project design. a project but to create with counterparts the The Bank's new adaptable lending system, appropriate context and conditions. which aims at providing phased and sustained Incentives can be changed only if senior support for the implementation of long-term management has a clear understanding of the development programs, is a promising move perverse effect of the current incentives on toward such flexible systems and should be institutional development and if it becomes tried in ID projects. fully committed to changing them. The key to improving the results of the Bank's Make a major effort at the start. The need to shift environmental ID portfolio thus lies the focus toward the process of project fundamentally with senior management, implementation should not occur at the which is able to change the incentives for task expense of a major effort at the start of managers. projects, since the project's "quality at entry" is a key determinant of its likelihood of Look at environmental ID in context. The overall success. The Bank needs to better understand objective of ID projects is to strengthen the the history and politics that guide institutional environmental management system as a decisions, to build a strong consensus with whole, not just an environmental agency in national and subnational governments and isolation. It is thus important to create institutions about the importance of the partnerships and cooperation in the ID process proposed efforts, to realistically assess the between the beneficiary agency and other capacity to absorb the proposed assistance, entities involved in enviromnental issues, such and to ensure government commitment to as universities, industries, and NGOs. Key sustain all efforts. Such initiatives, which are government ministries, especially finance, required very early in the process of project should be brought on board. Often this means development, are not directly associated with nothing more than exchanging information progress on the ground, so they may be seen and making the process more transparent; this as a waste of time and energy and as delaying is necessary because ID must ultimately be results. In reality, however, they are an coordinated with mainstream development essential and unavoidable price to pay for assistance and linked to political institutions ensuring ownership and for structuring the and economic growth. In terms of the Bank's long-term commitment that the process of work, this means integrating the ID institutional strengthening requires. Within perspective into the design of CASs and into institutions, a process of discussion, education, all sector strategic work. and information is required at the initial stages of ID programs. Complement stand-alone environmental ID projects with investment projects. Stand-alone ID Drastically change the incentives for task projects may be necessary to help prepare or managers. Task mangers must have incentives strengthen the overall policy framework in the to pursue a long-term process with environment field, but the specific objectives 36 Environment Department Papers Lessons and Recommendations to be achieved and the actions to be financed successful project implementation. More may be clearer for investment projects. dialogue and negotiation with industries, Investment projects were not reviewed in this polluters, and natural resource users is study, but it was suggested that they are also necessary, as is the use of more transparent not problem-free. (The time frames of procedures in government decisionmaking in investment and ID components are often environmental matters. radically different, and task managers, who have incentives to pressure borrowers to Introduceflexibility, simplicity, and moderate accelerate disbursement, will tend to focus far expectations. Environmental ID projects have less on ID components.) While problems with to be simple and flexible, since most of the both types of projects have to be addressed, ID ideal conditions outlined will not be met, at objectives will probably best be achieved by a least at the beginning. Several of the most combination of the two types. recent projects appear very conscious of such needs. The temptation to include too many Decentralize andfoster participation. Central components and subcomponents has to be governments have largely failed to address resisted by prioritizing and by keeping problems that are essentially local in nature, so expectations moderate. As mentioned, strategies for decentralization, particularly as however, to do this requires changing existing regards the execution and enforcement of incentives for task managers. policies, should be pursued. The current positive, universal trend in environmental ID Endnote projects toward decentralization, partnerships, and more direct involvement by local 8. We did not review projects financed by stakeholders must be continued. Projects must other institutions and donor countries. also foster public participation and pressure to This should perhaps be done in future increase project ownership and make reviews. Comparative advantage refers institutions accountable for their work, to the Bank's own potential relative to contributing to a greater likelihood of other agencies. Pollution Management Series 37 Annex A Active World Bank Environmental Institutional Development Projects Country FY Project name and cost Project description Brazil 90 National Environment Strengthen and restructure the national environmental protection Project ($117.0 million Bank; agency, IBAMA; consolidate environmental legislation; establish $166.4 million total project integrated programs for the protection and management of Pantanal cost) wetlands, Atlantic forest, and coast; consolidate conservation units, and create new ones. Madagascar 90 Environment Program Establish protected areas for biodiversity heritage; watershed ($26.0 million Bank; $156.0 management; soil conservation; agroforestry; reforestation; GIS; land million total project cost) boundaries and titling; develop national environmental management capacity and policy. Poland 90 Environment Management Help the Environmental Ministry improve planning, budgeting, and use Project ($18.0 million Bank; of economic incentives and analysis for environmental management; $27.3 million total project improve monitoring of food and soil contamination, hazardous waste cost) management policy, industrial pollution management; develop air pollution management and abatement strategy for Katowice-Krakow; improve water resources planning and management for upper Vistula River basin. Mauritius 91 Environmental Monitoring Strengthen environmental institutions and prepare national physical and Development ($12.4 development plan and national solid waste management plan; select million Bank; $20.5 million site and design industrial park; integrated pest management and marine total project cost) conservation; create national park. Indonesia 92 BAPEDAL Development Strengthen BAPEDAL's enforcement and inspection role by reviewing Technical Assistance ($12.0 and supplementing existing laws for pollution control and alternative million Bank; $15.0 million dispute resolution procedures; strengthen regional pollution control total project cost) agencies and laboratories; public awareness programs. Mexico 92 Environmental Project Reform and strengthen environmental institutions at the federal and ($50.0 million Bank; $126.6 state levels; prepare for decentralization; develop sectoral strategies total project cost) and coherent policy framework; strengthen monitoring capacity for air and water pollution, protected areas, wildlife protection and conservation programs. Nigeria 92 Environmental Management Support main agencies in the design, implementation, and monitoring ($25.0 million Bank; $37.9 of appropriate environmental incentive systems; establish million total project cost) environmental data collection systems and information network; carry out studies to identify key projects for alleviating environmental degradation. Pakistan 92 Environmental Protection Strengthen key environmental institutions, legislation, and policies; and Resource Conservation watershed and rangeland rehabilitation and development, reforestation ($29.2 million Bank; $57.2 and wildlife refuge management. million total project cost) Bolivia 93 Environmental Technical Strengthen institutions with environmental responsibilities; strengthen Assistance ($3.7 million environmental legal and regulatory framework; promote environmental Bank; $5.5 million total education in the primary school system. project cost) Chile 93 Environment Institutions Establish and strengthen the institutional framework for managing Development ($11.5 million environmental protection and conservation; update the legal and Bank; $32.7 million total regulatory framework; strengthen environmental assessment; promote project cost) environmental education and carry out small environmental projects at the community level; support priority sectors: forestry, mining, antipollution strategy, air and hazardous waste inventory. Pollution Management Series 39 Environmental Capacity Building: A Review of the World Bank's Portfolio Country FY Project name and cost Project description China 93 Environmental Technical Support the Chinese Ecosystem Research Network and Biodiversity Assistance ($50.0 million Research and Information Management; strengthen the National Bank; $76.0 million total Environmental Protection Agency, university-level education systems, project cost) monitoring and information systems; support environmental assessment capacity. Ghana 93 Environment Resource Develop national environmental resource management system; Management ($18.1 million strengthen environmental institutions, environmental education, public Bank; $35.9 million total awareness; develop environmental information systems; launch pilot project cost) for improved land and water management involving local communities; management of five coastal wedands. Korea, Rep. 93 Environmental Research and Assist selected colleges of agriculture and veterinary sdences to of Education ($60.0 million upgrade their capacity for environmental research and teaching. Bank; $97.3 million total project cost) Gambia, The 94 Capacity Building for Establish capacity within the National Environmental Agency by Environmental introducing environmental management processes; develop strategy Management-Technical for environmental educaton; improve environmental information Assistance ($3.0 million management. Bank; $5.0 million total project cost) Korea, Rep. 199 Environmental Technology Strengthen selected natural research institutes to identify and address of 4 Development ($90.0 million environmental issues and undertake environmental research and Bank; $156.0 million total development; strengthen the planning and policy role of the Ministry of project cost) Environment Morocco 94 Environmental Management Strengthen technical and institutional capacity in the Under Secretariat ($6.0 million Bank; $10.8 of the Environment; sector ministries, and local govemments; enhance million total project cost) and update regulatory framework and enforcement systems; promote environmental education; establish national environmental information network. Benin 95 Environmental Management Strengthen the National Environmental Agency; decentralize ($8.0 million Bank; $9.3 environmental planning; monitor regulatory framework; establish million total project cost) environmental information management and monitoring system. Honduras 95 Environment Development Strengthen the Ministry of Environment; improve environmental ($10.8 million Bank; $12.5 planning and legislation, implement environmental assessments, million total project cost) national environmental information system, local capacity building. Russia 95 Environmental Management Strengthen environmental institutions and policy; pilot projects for air ($ 110.0 million Bank; $194.8 quality management, safe water, river health and water conservation, million total project cost) hazardous waste management, pollution abatement facility, biodiversity strategy and conservation. Trinidad and 95 Environmental Management Operationalize the environmental management authorty; support Tobago ($6.2 million Bank; $10.5 participating agencies involved in environmental management; support million total project cost) priority work programs. Uganda 95 Environmental Management. Support environmental institutions in building capacity at local and Capacity Building ($11.8 natonal levels; establish National Environmental Management million Bank; $15.2 million Authority; document, monitor, and design solutions to environmental total project cost) degradation. Ecuador 96 Environmental Management Strengthen environmental institutions and review and update Technical Assistance ($15.0 environmental legislation; update pollution control and standards; million Bank; $20.0 million national environmental information system; environmental planning and total project cost) management for the Ecuadorian Amazon; municipal environmental management. Colombia 96 Urban Environmental Provide technical assistance to national, regional and local institutions Management ($20.0 million for improving environmental management in urban areas. Bank; $40.0 million total project cost) 40 Environment Departmnent Papers Annex A The Active World Bank Environmental institutional Development (ID) Country FY Project name and cost Project description Sri Lanka 97 Environmental Action I Initial five-year phase of longer-term program to strengthen and ($14.8 million Bank; $20.8 restructure the Environment Division in the Ministry of Transport, million total project cost) Environment and Women's Affairs; establish a Community Environmental Initiatives Facility to finance environmental activities at the grass-roots level within the priorities of NEAP; pilot land management component involving rehabilitation of degraded lands with community participation. India 97 Environmental Management. Strengthen environmental research; strengthen and expand the Technical Capacity Building environmental information system; establish environmental Technical Assistance ($50.0 economics cell in Ministry of Environment and support million Bank; $61.5 million environmental economics education in universities, support total project cost) review and upgrading of environmental standards; design a framework for environmental indicators; strengthen the national and regional offices of the Ministry of Environment; decentralize environmental management; strengthen implementation of environmental law and of environmental monitoring and compliance; support pilot effort in Gujarat State. Malawi 97 Environmental Management Support institudonal capacity building and strengthening of the ($12.4 million Bank; $13.7 environment information system, environmental education, million total project cost) community-based environmental management, and environmental actions and studies. Zambia 97 Environmental Support Set in place an effective institutional and regulatory framework for Program ($12.8 million environmental protection and natural resource management; pilot Bank; $20.8 million total community environmental management program; environmental project cost) education and public awareness; pilot environmental fund for the promotion of community-based microprojects; establishment of an environmental information network and monitoring system. Pollution Management Series 41 Annex B Objectives of environmental institution-buildin projects, institutional components 1 Policiesl Environmental ID nttional etrforma nce insttu ents inrorm atin. monitor i,edu