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Over the last fifteen years, two of the most contentious issues faced by the World Bank have been its involvement in the forest sector and its structural adjustment lending.

This report addresses the intersection of these two arenas by asking:

"To what extent, and under what conditions, can the World Bank be an effective proponent of forest policy reform through adjustment lending?"

The report focuses on experience in a few exceptional cases where the World Bank has explicitly included forest policy reform conditions in adjustment lending operations: Papua New Guinea, Cameroon, and Indonesia. In addition, the report includes an analysis of what happened in Kenya, where the World Bank proposed, but did not move forward on, an adjustment operation focused on environmental policy reform.