A role for positive conditionality?

15 April 2000

A new report from the World Resources Institute examines to what extent, and under what conditions, the World Bank can be an effective proponent of forest policy reform through adjustment lending. The Right Conditions: The World Bank, Structural Adjustment, and Forest Policy Reform, looks at four cases where the World Bank attempted to link structural adjustment lending to forest policy changes, in Papua New Guinea, Cameroon, Indonesia and Kenya.

A key finding of the report is that under the right conditions, the World Bank has been effective in using structural adjustment lending to support domestic constituencies for reform against entrenched vested interests in unsustainable logging. However, the Bank has not been very successful in using adjustment lending to leverage policy implementation where institutional capacity and political will have been weak. According to the report, the right conditions in the borrower country include the existence of a domestic constituency for reform, and policy changes that can be implemented with a stroke of the pen.

For the Bank to be effective in promoting forest policy reform, it must centrally address governance issues in the sector. The report identifies changes in polices, personnel, and budgeting systems necessary to give World Bank staff the incentives and resources to play these new roles effectively.

To order or view the report in PDF format, see: www.wri.org/wri/governance/iffeforest.html