ABSTRACT
A decade of structural adjustment programs has generated improvements in the economic performance of some developing nations, notably middle-income countries, but it has failed to produce improvements in others, particularly in low-income ones. During the past few years, structural adjustment programs have shifted from correction of macroeconomic disequilibria to sectoral adjustment lending for two basic reasons. Developing a system of national income accounts that integrates environmental services into national productivity remains a requisite for allowing policy makers to plan the rational use of environmental resources. Recommended changes for the World Bank, the International Monetary Fund, and, by extension, the regional development banks are in four areas: integrating the environment into development planning, establishing an operational directive on sustainability, improving implementation capacity, and strengthening the international environmental incentive structure. The country strategy papers are the first venue in policy formulation whereby major changes can take place within the World Bank.
