IEG Findings and Conclusions. References to both natural resource degradation and associated human vulnerability occurred most frequently in forest resource nexus countries (in 64 and 55 percent of Systematic Country Diagnostics [SCDs] and Country Partnership Frameworks [CPFs], respectively) and least frequently in groundwater nexus countries (39 and 30 percent). There is a lack of analysis, across all nexus countries, about the way that resource degradation is affecting the welfare and livelihoods of poor, resource-dependent persons—in the places where these threats are most prominent. There is a tendency for SCDs and CPFs in nexus countries not to refer to both resource degradation and human vulnerability.

IEG Recommendations. Recommendation 1: The World Bank should identify and analyze natural resource degradation and vulnerability nexus (NRDV) issues and leverage this knowledge in SCDs and in country engagements where such issues matter for achieving sustainable poverty reduction and shared prosperity. In a subset of countries where NRDV nexus issues matter for achieving sustainable poverty reduction, SCDs can draw on data and analytics to identify and prioritize these issues. Management can leverage this knowledge to address these issues in country engagements, including through advisory work and, where relevant, prioritize lending, including through partnerships.

Acceptance by Management Agree.

Management Response Management agrees with the first recommendation, to analyze natural resource degradation and vulnerability nexus issues in SCDs and in country engagements, where such issues matter for achieving sustainable poverty reduction and shared prosperity. This is consistent with management’s view of the SCD as a diagnostic tool that, by its nature, is not expected to be exhaustive in its review of the development issues facing a country but rather to be selective in choosing those issues that constitute the key development bottlenecks at the time that the SCD is prepared. SCDs have the strategic objective “to identify the most critical constraints and opportunities facing countries as they work to end extreme poverty and promote shared prosperity in a sustainable manner.” Given varying circumstances and conditions, not every SCD and Country Partnership Framework will present assessments of the drivers and consequences of natural resource degradation and related vulnerability. As in all cases, the World Bank will work with clients to help define and prioritize country-level objectives and will endeavor to ensure that natural resource degradation (and its effects on vulnerable populations) remains central to this dialogue in countries where these issues are prominent for poverty reduction, as suggested by the report.

IEG Findings and Conclusions. Three factors help explain the performance of the NRDV portfolio: (i) natural resource management practices, (ii) resource governance, and (iii) financial incentives. Projects that address natural resource degradation use many technical practices whose effectiveness depends both on their appropriateness for specific ecological systems and on their fit within particular social and economic contexts. These interventions struggle to find the right balance between achieving resource recovery and meeting the needs of vulnerable resource users. Effective resource governance, including land use rights, policies, and adequate institutional capacity, are vital to the sustainable management of and equitable access to natural resources. The effectiveness of financial incentives in promoting sustainable resource use and vulnerability reduction largely depends on whether programs target the most threatened areas and include vulnerable resource users. In most cases analyzed, financial incentives were provided through environment and climate change trust funds that did not include a vulnerability lens.

IEG Recommendations. Recommendation 2: World Bank operations that address natural resource degradation should direct attention to resource governance challenges and use a mix of resource management practices and financial incentives appropriate for the relevant socioecological systems. World Bank operations that include support for natural resource degradation can identify and address governance issues by, for example, clarifying resource rights and addressing regulatory failures and distortive policies that drive resource degradation and increase the vulnerability of resource-dependent people. These governance challenges can be addressed through concurrent operations or sequential programmatic approaches. Operations that use resource management practices (such as area closures and watershed management) should find the right balance between achieving resource recovery and meeting the welfare needs of vulnerable resource users. Such trade-offs can be managed by ensuring timely economic and social benefit flows to resource users. When using financial incentives (such as payments for environmental services), it would be important for these operations to target both threatened areas and vulnerable groups.

Acceptance by Management Agree.

Management Response Management agrees with the second recommendation—to direct attention to resource governance challenges—and will do so by combining different lending instruments. Management believes that the World Bank has made significant efforts supporting policy and regulatory reforms. The World Bank has lending instruments for addressing different development challenges, and this evaluation primarily focuses on one of those instruments—traditional investment project financing. development policy operations or loans are more suited to promoting policy, regulatory, and other governance reforms (including land tenure). Management believes that the evaluation’s portfolio analysis could have been more insightful in this regard had more development policy operations been included. Similarly, the analysis could have been further enhanced by the inclusion of more Program-for-Results operations, which have been used to support natural resource degradation and vulnerability investments in some cases. Management notes that many of the natural resources discussed in the report are common-pool resources and their respective restoration efforts will be sustainable when problems are collectively addressed through various appropriate channels. It should also be noted that the specific governance challenges identified in each case may require responses that fall outside the scope of individual projects (for example, coordination across different sectors and institutions) and may require a combination of lending and nonlending instruments (for example, the provision of knowledge and capacity building) delivered through programmatic engagements.

IEG Findings and Conclusions. No sustainable land management (SLM) project adequately assesses the nexus between resource-related outcomes and the vulnerability reduction of relevant resource users. Only 10 percent of the closed Sustainable Development SLM and none of the Social Protection SLM projects adequately provided attributable resource-related evidence. Only two closed Sustainable Development SLM projects attempted to measure the link between resource restoration and reduced human vulnerability, but even in these cases the analysis was incomplete.

IEG Recommendations. Recommendation 3: World Bank Global Practices involved in addressing natural resource degradation and associated vulnerability should share knowledge, improve measurement, and enhance coordination in the design and implementation of their projects to optimize development effectiveness. The Social Protection and Jobs and the Sustainable Development Global Practices should measure, assess, and report the attributable resource- and vulnerability-related outcomes of their different sustainable land and resource management approaches. For enhancing coordination, the Social Protection and Jobs Global Practice could share lessons on targeting vulnerable groups and measuring vulnerability-reducing effects. Similarly, the relevant Global Practices within the Sustainable Development Practice Group could share knowledge on the most appropriate scientific resource management practices and how to apply and measure their effects in the relevant socioecological systems. These projects should also ensure synergies when they are operating in the same geographic area. Possible ways to enhance coordination include cross-support, co-task team leadership, and joint advisory services and analytics.

Acceptance by Management Agree.

Management Response Management agrees with the third recommendation—to work across Global Practices to share knowledge, improve measurement, and enhance coordination to optimize development effectiveness—and it is acting on it. Management is continuously striving to enhance knowledge management practices, particularly to help ensure stronger outcome orientation of country engagements. Numerous examples of coordination and knowledge sharing from global programs such as PROGREEN and PROBLUE illustrate the progress underway in this realm. The Social Protection and Jobs Global Practice is strengthening its efforts to build, reflect and disseminate insights and evidence of social protection programs and policies that are adaptive and contribute to addressing natural resource degradation. The Social Protection and Jobs Global Practice flagship report “Adaptive Social Protection: Building Resilience to Shocks” is one such example and is complemented by multiple knowledge pieces on public works. Additionally, the Sustainable Development Practice Group has developed and shared its work and experience in areas such as integrated land use planning, benefit sharing, program design based on understanding the drivers of deforestation, ensuring the voice of marginalized and indigenous peoples in program design, diagnostics on social inclusion, and empowerment and resilience. Management will reflect on additional opportunities to continue enhancing measurement and knowledge sharing, with a view to achieving and reporting on development outcomes.