Forests Sourcebook - HCV Resource Network

limited in the coverage and duration they can devote to sectoral
reforms). They can also be designed as multiyear, multitranche
operations that support sector-wide assistance
programs in response to government requests when appropriate,
and are associated with different types of conditionality
(see box 6.10 and box 6.11).
The good practice principles proposed by the World
Bank 2005 Conditionality Review are relevant for strong
policy operations aiming to achieve forest sector reforms.
These principles are reviewed in the following paragraphs:
Ownership. Success of sector policy reforms depends heavily
on the ownership and institutional capacity of the agencies
responsible for implementing the reforms. A realistic assessment
of ownership must rely on the government’s expressed
policy intentions and its track record of reform. The nature of
policy loans requires separating the reforms from the stakeholders
responsible for implementation. Perspectives diverge
on the implication of this for the utility of DPL for sectoral
reforms. With DPLs, sector reforms often must be initiated
and owned by central economic and policy ministries, thus
broadening the group of agencies responsible for reform.
Furthermore, policy loans can be more effective because disbursements
are triggered by the delivery of tangible and
measurable results. This can be an important incentive in
achieving sectoral reforms that might not come to fruition
under sector investment lending because of institutional inertia
and unwillingness to venture into reform areas in the
implementing agencies themselves (see boxes 6.11).
Separating reforms from the stakeholders responsible
runs the risk of a disconnect between reform and implementation
at the sector level, especially in cases where very
specific sectoral objectives have been included in the DPL
package. For example, in some countries energy sector
reforms have been included in a series of DPLs over several
years, with little impact on the sector program. When using
DPLs for sectoral reforms, it can also be unclear where the
funds required for costs of implementing triggers or prior
actions for subsequent loans will be raised.
Harmonization. Under the lead of country authorities,
World Bank staff should reach an understanding with the
government and other partners on a single and internally
coherent framework for measuring progress under the government’s
program. These accountability frameworks are set
out as policy matrices showing policy actions and expected
results. These frameworks can serve to coordinate broader donor
support, including technical assistance. Accountability
Box 6.10
Typology of Conditionality
Policy based loans are made available when the borrower
accomplishes critical policy and institutional
actions, or loan conditions. Actions to be met before an
operation can be approved by the Board are referred to
as prior actions and are listed in a schedule to the legal
agreement, and all conditions for single-tranche operations
are prior actions. In an operation with more
than one tranche, the borrower complies with certain
conditions after Board approval and effectiveness (in
addition to any prior actions), termed tranche-release
conditions. Unless all tranche-release conditions are
met, a tranche can be released only if the Board
approves a waiver of the unmet conditions.
In addition to the critical policy and institutional
actions that are recorded as prior actions or trancherelease
conditions in legal agreements, the World Bank
uses triggers and benchmarks to review and describe
progress under a programmatic series of loans.
■
Triggers represent critical actions for achieving and
Source: World Bank 2005.
■
sustaining the results of the medium-term program.
Achievement of triggers normally indicates sufficient
progress to move from one operation to the
next. Triggers offer greater operational flexibility
than using tranche-release conditions, because triggers
can be adapted more easily to a changing program
environment. Bank operations are expected to
describe how triggers are adapted and modified to
support program objectives before being converted
into the prior actions of a follow-on operation.
Benchmarks in program matrices describe the contents
and results of the government’s program in
areas supported by the World Bank. Benchmarks
are frequently used to describe steps in a reform
process that represent significant, though not necessarily
critical, progress markers for the implementation
of the program. Although they help define an
area of the Bank’s policy involvement, they are not
intended to determine disbursement of Bank loans
or grants.
222 CHAPTER 6: MAINSTREAMING FORESTS INTO DEVELOPMENT POLICY AND PLANNING