PHN 1991 Sector Review 12 Section B of this chapter provides a distillation of lessons learned from myriad Bank reviews (see bibliography in Annex 3), from seven PCRs and other reviews of PHN program experience undertaken during FY91 (Annex 1, lhble 7), and from the insights of task managers of FY91-approv,-4 operations. Section C reviews FY91-approved PHN operations as they relate to those lessons learned. While the ASR team reviewed many documents in preparing this sector review, time did not permit a comprehensive review and analysis of Bank experience relevant to PHN sectors.

# B. Lessons Learned

3.8 The review of PHN project experience (Annex 1, Thble 7), two OED studies (1985 and 1989) on project sustainability, and the Sixteenth ARIS, reveals four conditions that have a strong influence on the sucoess and sustainability of PHN operations: _*Enabling policy and political environment,_ which includes (1) macroeconomic and muitisectoral pollcies that are oriented toward growth with poverty reduction; (2) strong political commitment to poverty programs despite the weak political and economic position of the poor, (3) policies that encourage private sector development, decentralization, institutional pluralism, and popular participation; and (4) PHN policies that emphasize the provision of basic services to the poor and vulnerable segments of national populations.

_eSound organiutonal stucture,_ which would encourage the involvement of the many institutions, agencies, and community groups that could participate in PHN sector development.

_*Adequate management capacity_ of all contributors to PHN sector development, which would permit appropriate planning, programming, design, implementation, nmonitoring, and evaluation of sector activity, as well as the optimal use of human, financial and capital resources.

_eAdequate and reliable finandng_ of esntial sector activities over the long term, which would be aehieved through investment and recurrent budget allocations that are filly reflective of sound policy and strong political support, adequate and equitably designed cost-recovery programs, and improved availability, coordination, and use of external aid.

This section provides insight based on lessons learned as to what managementfinstitutional Lssues PHN sector operations must focus on in order to assist national governments to bring about these four conditions for successful and sustainable activity In the PHN se vs. These lessons are drawn largely from the I _et. implentation eapeince,_ particularly but nt ;xclusively in the PHN sectors, as documented in the in-house reviews cited earlier. They also reflect the experience and perspectives<sup>of</sup> Bank staff consulted during the ASR exercise. Where available and appropriate, references are made to documents, which would provide furnher guidelines and/or insight on how to approach these issues.

3.9 Section B.1, below, presents some lessons of substance, which give some indication of _what_ to do about thee various components of management/institutional development issues. Section B.2, which immediately follows, presents a number of lessons of design and process and notes some useful tools, al of which might give some guidance on _how_ to address management/institutional development issues more effectively. These sections certainly do not provide a complete set of guidelines for task managers and management. Rather, they are an initial attempt to address a difficult yet crucial dimension of PHN work, which has thus far received little attention. PHRHN is considering, however, developing the preliminary work undertaken in this ASR into a more thorough review and analysis of management/nstitutional development experience<sup>in</sup> PHN, both inside and outside of the Bank, which would eventually culminate in the production of such guidance.

1. _Lessons of Substance_

3.10 Tne lessons of substance presented here are organized around two main categories: institutional and organizational framework, and management capacity for policy formulation and implementation.