Water Policy, Economics, and Systems Analysis
Strengthening river basin institutions: The Global Environment Facility and the Danube River Basin
 Increased international attention to water resource management has resulted in the creation of new institutional arrangements and funding mechanisms as well as international initiatives designed to strengthen river basin institutions. The Global Environment Facility's (GEF) International Waters Program is at the heart of such novel collaborative regional approaches to the management of transboundary water resources. This paper assesses GEF-led efforts in the Danube River Basin, GEF's most mature and ambitious projects to date. It finds that GEF has been quite successful in building scientific knowledge and strengthening regional governance bodies. However, challenges of coordinating across expanding participants and demonstrating clear ecological improvements remain. GEF-led collaborative activities in the Danube River Basin reveal three critical lessons that can inform future river basin institution building and decision making, including the importance of appropriately creating and disseminating scientific data pertaining to the river system, the need for regional governance bodies for integrated river basin management, and the necessity to address coordination issues throughout project planning and implementation.
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 During the summer of 2002, severe flooding gripped central Europe, affecting at least four million people and causing over $15 billion in damage [European Environment Agency, 2003, p. 8]. The exceptionally heavy rainfall resulted in floods along several European rivers, notably the Danube River. This tragedy was but one example of how decisions regarding land use and river basin management have real and long-lasting consequences. Catastrophes such as this have brought to light the need for increased coordination between water resources management and environmental protection. One solution has been the development of joint institutional arrangements to help manage precious resources and to prevent and respond to such a crisis.
 Over the past decade, we have witnessed an expansion of participants in global environmental governance, including the United Nations system, environmental nongovernmental organizations (NGOs), and private sector actors. New institutional arrangements and environmental funding mechanisms have emerged. The organization perhaps most vital in challenging traditional water management has been the Global Environment Facility (GEF). The Global Environment Facility is a multilateral financial mechanism that promotes international cooperation around the protection of the global environment. It is active in six focal areas, including climate change, biodiversity, ozone layer, land degradation, persistent organic pollutants, and international waters.
 Since gaining support from the international community during the Rio Summit, GEF has become the largest multilateral source of aid for global environment issues, including water-related issues. During the 1990s, its first decade of existence, GEF allocated a total of $4.2 billion to finance more than 1000 projects in 160 countries. Including cofinancing, almost $1 billion has been invested specifically for water-related projects in 139 countries. Another $400 million is anticipated over the next 4 years to address critical global water issues [El-Ashry, 2003, p. 2].
 In the fragmented and diffuse environment of international water resource management, GEF has come to be a “major facilitator” of the implementation and increased adoption of international waters laws, action plans, and regional environmental protection agreements [GEF, 2001, p. 35]. GEF defines its role in international waters as a “catalyst [for the] implementation of a more comprehensive, ecosystem-based approach to managing international waters and their drainage basins as a means to achieve global environmental benefits” [GEF, 1996, p. 49]. In doing so, it aims to assist countries in better understanding the functioning of their international water systems and developing an appreciation of how sectoral activities impact the environment. By relying on the requisite strengthens of the United Nations Environmental Programme (UNEP), United Nations Development Programme (UNDP), and the World Bank, GEF's tripartite management structure represents a shift toward a multilateral cooperative international development aid model. Across the globe, GEF seeks to develop new institutional governance arrangements to manage transboundary water resources that highlight improved scientific knowledge and regional governance. Its regional water projects aim to resolve the collective action problems that characterize common pool resources like transboundary waters.
 Activities in the Danube River Basin demonstrate GEF's new multicountry partnership approach. By supporting the development and refinement of institutional governance arrangements in the region, GEF-led activities aim to create regional public goods. Activities in the Danube represent GEF's most mature, well-funded, and ambitious collaborative regional water projects to date [Ollila et al., 2000, p. 10]. They illustrate a regional approach to the development of environmental and water-related national policies and offer insight into the management and policy of a transboundary river basin. These projects raise important questions about the ability of international institutions to successfully design, manage, and sustain joint management arrangements.
 This paper investigates the emerging framework for the management of transboundary water resources advanced by GEF. Specifically, it assesses the outcomes of GEF-led activities along the Danube River, GEF's largest single investment and most mature international waters projects. Given the great attention and investment in this region, it is important to question the relative success of GEF activities and the challenges to regional coordination. It asks, What have been the changes in human behavior and in the biophysical environment along the Danube [Miles et al., 2002]? How effective is GEF in building regional public goods in the Danube region? What are the implications of GEF-led activities for river basin management in this region? What lessons does the basin reveal for future river basin collaboration and decision making?
 First, we sketch the difficulties of managing common pool resources like international rivers and outline GEF efforts at promoting river basin organizations as regional public goods. Next, we provide a broad description of GEF-led activities along the Danube. An analysis of GEF's river basin management strategy and its broader implications for this region is then presented. Specifically, GEF's success in building scientific knowledge and strengthening regional governance bodies along the Danube River is assessed. So too are the challenges of coordinating between expanding participants and demonstrating clear ecological improvements. It is hoped that the lessons learned from this case study will be applicable to other international efforts concerning transboundary water resources and inform the development of institutional arrangements in other regions of the world.
2. River Basin Organizations as Regional Public Goods
 International rivers are common pool resources shared by basin states. Common pool resources are defined as resources where exclusion is difficult and costly to achieve and use is subtractable [Ostrom and Ostrom, 1977]. As a result, users of common pool resources often face problems of resource depletion and degradation. The “commons dilemma” of overuse and mismanagement can occur when there is no agency to coordinate management or ration use [Gardner et al., 1990].
 States face collective action problems in trying to design effective institutions to manage common pool resources. For example, an individual state may not have an incentive to incur the costs of creating new institutions without some assurance that other states will also participate to provide the public good. The transaction costs of participation are often high at the national level in managing a common pool resource. This is often because of conflict over resource use and the relative weak nature of regional governance bodies. States often fail to overcome collective action problems because of the inability to monitor each other's behavior with any degree of certainty and the fear that others will renege on their commitments.
 However, states can collectively produce and maintain effective structural designs for resource governance, thereby mitigating the commons dilemma. Institutional governance arrangements can help states overcome such collective action problems and reach mutually beneficial agreements. Such arrangements can provide states with information about other state's behavior and actions, about relevant standards of behavior, and about scientific knowledge [Martin, 1999]. Institutions allow states to overcome these problems and provide for monitoring and cooperation at a more reasonable cost to the individual state. In order to encourage cooperation, states must be given incentives to bargain and participate in environmental agreements and to “surrender some degree of sovereignty” [Susskind, 1994, pp. 21–24].
 Scholars have highlighted the need for a new framework for the management of water resources in international river basins [Correia, 1999]. Specifically, they address the “pressing need for mechanisms that bring parties in disputes together to negotiate resolutions” [Rogers, 1992, p. 69]. Milich and Varady  recommend treating transboundary resources, such as rivers, as unified water basins in an integrative manner to maximize the ability to prevent harm, assure future use, and resolve conflicts.
 Yet international aid agencies have historically addressed environmental problems through the provision of public goods at the local and national levels. That is, traditionally, aid has been targeted at a specific environmental problem in a particular country or community. Most environmental aid institutions are not equipped to address regional activities, and so such a multicountry approach calls for new special organizational solutions. GEF activity in the international waters arena represents just such a new multilateral cooperative international development aid model. GEF's approach emphasizes river basin organizations as regional public goods. Regional public goods are “goods that can only be provided effectively at the level of the region” or a grouping of neighboring governments [Cook and Sachs, 1999]. As such, GEF activities address collective action problems around transboundary waters by minimizing the high transaction costs, or costs of organizing and cooperating, for participating states.
 By funding the costs of the learning processes necessary to gain a better understanding of these ecosystems, GEF hopes countries will collaborate with their neighbors to collectively reach effective solutions. In an effort to define “international waters,” GEF operational strategy focuses on “transboundary” water resources, emphasizing pollution and water management through a participatory stakeholder process. GEF activities currently target 11 transboundary river basins across the globe, including the Danube, Dnipro, Bermejo, Okavango, Tumen, Dnieper, Rio de la Plata, Mekong, San Juan, Nile, and Senegal River systems. To receive funding, a project must involve a significant transboundary problem involving one or more imminent threats with demonstrated regional commitment and a plan demonstrating leverage assistance from other sources [International Union for Conservation of Nature and Natural Resources, 1997]. GEF relies on the incremental cost paradigm, requiring recipient countries to demonstrate that they, along with outside donors, are making investments to address baseline national water-related issues. As such, it complements traditional development assistance by covering the additional costs or agreed incremental costs incurred when a development project also targets global environmental objectives.
 In an effort to improve efficiency and advance partnerships, institutional linkages are forged intentionally through GEF-led activities. Management institutions are linked both horizontally across geographic space and vertically through levels of organization [Young, 2002]. As such, project implementation is characterized by a tripartite management structure. Three agencies, the UNDP, UNEP, and the World Bank, work in concert to provide a delivery system for global environmental projects by working with client country governments and NGOs to develop global environmental projects. UNDP manages capacity building projects and undertakes smaller projects where they can utilize their technical expertise on the ground and build upon their already strong connection to recipient countries. UNEP's focus is on regional priority setting and action planning, and they provide guidance through a Scientific and Technical Advisory Panel (STAP). The World Bank is in charge of the GEF Trust Fund and implements GEF projects that typically complement its regular loan-making programs.
3. Emerging Institutional Arrangements Along the Danube River
 The Danube River, Europe's second longest river, is in the heart of central Europe. From its source in Germany to its delta at the Black Sea, the drainage basin is ∼800,000 km. With over 80 million inhabitants the Danube catchment includes 18 countries, more than any transboundary basin in the world. These include all of Hungary, most of Austria, Croatia, Romania, Slovenia, and Slovakia, and significant portions of Bosnia and Herzegovina, Bulgaria, the Czech Republic, Germany, Moldova, Serbia and Montenegro, and Ukraine. In addition, small parts of Albania, Italy, Macedonia, Poland, and Switzerland are included in the basin. Figure 1 displays a map of the Danube River.
 The Danube is relied upon for multiple uses, including navigation, commercial fishing, hydropower, drainage, irrigation, recreation, and tourism [Linnerooth, 1990]. Tens of millions of people depend on the Danube for their drinking water. Despite great differences in the level of political and economic development within the basin, the Danube region is thought to have a high economic development potential [International Commission for the Protection of the Danube River Permanent Secretariat, 2001, p. 9].
 Today, the Danube River experiences serious nutrient pollution, mainly from household products, urban sewage, and agricultural fertilizers. Toxic substances from accidental spills and high flooding make matters worse. In addition to water quality concerns the region also faces water quantity, river navigation, and fisheries concerns. The Danube River picks up domestic, industrial, and agricultural waste as it makes its way to the Black Sea. Since there is little exchange of water between the Black Sea and the Mediterranean, contaminants and nutrient loads which cause eutrophication and oxygen depletion accumulate in the Black Sea. The impact has reduced biodiversity, posed human health threats, and disrupted fisheries. Excessive fluxes of phosphorous and nitrogen in rivers have created polluted conditions in the Danube Delta and Black Sea. Some 80% of the Danube's wetlands and floodplains have been lost.
 Characterized by a relative high degree of conflict, the basin includes countries that were, for decades, allied with hostile political blocs. As the Transboundary Water Project reports, “conflicts in the basin tended to be both frequent and intricate, and their resolution especially formidable” (Transboundary Water Project, The Environmental Program for The Danube River, http://www.transboundarywaters.orst.edu/projects/casestudies/danube.html, accessed 18 April 2004). The unresolved Gabcikovo-Nagymaros hydroelectric project conflict highlights disputes in the region over water development projects and their environmental consequences [Jordan, 2000; Environment News Service, 1999; Aldhous, 1992]. Periodic devastating flooding in recent years has pitted countries against one another and raised scientific questions over the nature and cause of flooding in the region. The 2000 cyanide spill along the Tisza River, a tributary of the Danube, raised issues of lax and inconsistent environmental regulation and enforcement by some countries within the Danube River Basin. Such conflicts and stresses within the region, coupled with the great international significance of the river, demonstrate the necessity of investment in regional public goods within the Danube River Basin.
 Through its International Waters program, GEF has “nested” projects in the Danube-Black Sea region. This region was selected as a test geographic region on the basis of (1) the history and maturity of GEF and donor involvement in the region, (2) expressed recipient government commitment, and (3) availability of historical monitoring information to provide a baseline against which to engage improvements [Sklarew and Duda, 2002, p. 2]. Agreements and protocols signed in the Danube and Black Sea region in the early 1990s signaled to GEF and other donor institutions that these countries were ready to cooperate. European Union (EU) accession factored prominently into the selection of this region as a test case and model project region as the availability of substantial grant funding stimulated progress. GEF funding and leadership has been the centerpiece of activity on this region in the past 10 years. It represents coordinated action and the development of new partnerships and institutional arrangements between and among countries, institutions, and communities. Table 1 provides a list of GEF-funded projects in the Danube River Basin.
Table 1. GEF Investments in the Danube River
|Danube River Basin Environmental Management (1992–1996)||UNDP||8.5||43.5|
|Developing the Danube River Basin Pollution Reduction Programme (1997–1999)||UNDP||4.19||7.79|
|Building Environmental Citizenship to Support Transboundary Pollution Reduction in the Danube (2000–2001)||UNDP||0.75||1.583|
|Transfer of Environmentally Sound Technologies in the Danube River Basin (2001–2003)||UNDP||0.99||2.4|
|Strengthening the Implementation of Capacities for Nutrient Reduction and Transboundary Cooperation in the Danube: Phase I (2001–2004)||UNDP||5.35||11.95|
|Strengthening the Implementation of Capacities for Nutrient Reduction and Transboundary Cooperation in the Danube: Phase II (2004–2007)||UNDP||12.24||25.118|
|Danube/Black Sea Basin Strategic Partnership on Nutrient Reduction: Phase I (2001–2007)a||World Bank||7.35||36.905|
|Danube/Black Sea Strategic Partnership For Nutrient Reduction: Tranche II (2001–2007)a||World Bank||16||90.8|
 The Environmental Programme for the Danube River Basin (EPDRB), carried out by the European Union Phare in cooperation with GEF, can be traced to the Environment for Europe Conference held in the Czech Republic in 1991. GEF helped fund the first phase of the program, the Danube River Basin Environmental Management (1992–1996), with a $8.5 million grant. The aim of the program was to build regional cooperation for water management, evaluate and define problems in the region, initiate high-priority actions, implement a basin-wide water quality monitoring strategy, and establish a warning system for accidental pollution. The project produced a strategic action plan (SAP). The SAP contains four goals: improvement of aquatic ecosystems and biodiversity and reduction of pollution loads entering the Black Sea, maintaining and improving the quality and quantity of Danube River water, control of damage from accidental spills, and the development of regional cooperation in water management [EPDRB, 1995]. It provides a framework for regional integrated water management expressed in the Danube River Protection Convention, also signed in 1994 by the environmental ministers from the Danube countries and the European Union Commissioner responsible for the Environment. The Danube River Protection Convention officially entered into force in October 1998 when ratified by eight Danube states.
 The Danube NGO Network, established in 1994 and funded initially by GEF, was designed to ensure participation of environmental NGOs in project planning and implementation activities. In 1999 the Danube Environmental Forum replaced the Danube NGO Network. An umbrella network of Danube NGOs, this group has come to represent 150 NGOs from Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Moldova, Romania, Serbia and Montengero, Slovakia, Slovenia, and Ukraine. The main tasks of the forum are to “influence the future development of the Danube River region on issues such as ecosystems, land use and environmental education and to reinforce the co-operation among NGO representatives, governments and other stakeholders” (Danube Environmental Forum, http://www.rec.org/DanubePCU/def.html, accessed 18 April 2004).
 During the second phase of the Environmental Programme for the Danube River, GEF funded another project named Developing the Danube River Basin Pollution Reduction Programme (1997–1999), encompassing a $3.9 million GEF grant. A program of demonstration projects and institutional development actions designed to support the SAP and the regional convention, the goal of this second GEF-funded project was to develop prioritized pollution reduction projects for cofinancing. Over 500 pollution hot spots were identified and matched with the policy, legal, and institutional reforms needed to clean them up. UNDP led the production of a transboundary diagnostic analysis (TDA) to obtain a complete knowledge base for priority pollution loads and environmental issues in the basin, particularly hot spots. Transboundary issues included water quality and quantity, river navigation, and fisheries. NGOs were particularly involved in this phase as the Danube Environmental Forum, along with the World Wildlife Fund and the International Union for Conservation of Nature and Natural Resources, helped to identify small-scale hot spots for restoration. Projects implemented included wetlands restoration projects, clean production technology projects, planning in the Tisza River Basin, the creation of the Yantra River Basin Council, and disposal of manure from animal farms project. With European Union Phare support the Trans-national Monitoring Network and the Accident Emergency Warning Systems were also put into operation.
 Attempting to bring enterprises into compliance with environmental norms of the Danube River Protection Convention, GEF also offered support for a United Nations Industrial Development Organization–led project in 2000. This project, Transfer of Environmentally Sound Technologies in the Danube River Basin, is designed to identify 130 major manufacturing enterprises of concerns and build capacity in existing cleaner production institutions in five Danubian countries. In addition, a medium-sized grant to the UNDP, Building Environmental Citizenship to Support Transboundary Pollution Reduction in the Danube, aims to help countries operationalize information access and public participation in the Danube Basin by providing funds to Hungary and Slovenia.
 Today, the International Commission for the Protection of the Danube River (ICPDR), housed in Vienna, Austria, is the main decision making body under the convention and led by a permanent secretariat. ICPDR is the “institutional frame not only for pollution control and the protection of water bodies but it sets also a common platform for sustainable use of ecological resources and coherent and integrated river basin management” [ICPDR, 2003]. The Commission's Joint Action Programme, the ICPDR's main policy document, demonstrates joint and coordinated basin-wide activities in the region. It is directed toward improvements of the ecological and chemical status of the water, prevention of accidental pollution events, and minimization of the impacts of floods [ICPDR, 2001, p. 18]. The Danube Pollution Reduction Programme, the revised SAP, and the Five Years Nutrient Reduction Programme were the basis for the development of the ICPDR's Joint Action Programme.
 In 2001, GEF launched a strategic partnership to accelerate implementation of the region's Strategic Action Plan and move toward a more geographically programmatic approach. Through collaboration with the 17 participating countries and three implementing agencies (UNDP, UNEP, and WB), GEF merged their Danube activities with those occurring in the Black Sea region. The Strategic Partnership on the Danube and Black Sea Basin (2001–2007) includes two final regional projects through UNDP: (1) Control of Eutrophication, Hazardous Substances and Related Measures for Rehabilitating the Black Sea Ecosystem and (2) Strengthening the Implementation Capacities for Nutrient Reduction and Transboundary Cooperation in the Danube River Basin. These capacity-building projects, implemented by UNDP and UNEP total $9 million in GEF funding, are expected to strengthen the region's two commissions and assist countries in adopting the necessary, policy, legal, and institutional reforms, such as wetland restoration and agricultural policy reforms. The partnership also includes a novel Partnership Investment Fund led by the World Bank on nutrient reduction in the basin, designed to catalyze an investment response necessary to accelerate action. Initially funded by a $20 million GEF grant, the Investment Fund aims to leverage $210 million to complement the $70 million GEF grant funds for nutrient reduction investments in the agriculture, municipal, and industrial wastewater treatment sectors and for wetlands restoration. The funds are designed to replicate demonstration projects through country requests to the World Bank and other sources to address nutrient reduction as the highest transboundary priority.
 This programmatic partnership represents a test to determine if GEF can serve as a catalyst in leveraging the necessary policy and institutional reforms and investments necessary to reverse degradation of a large marine ecosystem and its contributing freshwater river basin. Many participants in the larger strategic framework include the Governments of Germany and Austria as well as European Bank for Reconstruction and Development, European Investment Bank, U.S. Agency for International Development, and the World Wildlife Fund. The European Union has taken a leadership role in convening participants and sponsoring coordination meetings. This geographic programmatic approach is being replicated in other regions around the world, including the Mekong River-South China Sea Region and the Parana/Paraguay/Plata River Basin systems and Patagonian Shelf Large Marine Ecosystems.
4. GEF's River Basin Management Approach: Achievements and Challenges
 Given the significant amount of energy, resources, and money that GEF has invested in the Danube River basin, how effective have they been in creating regional public goods? Specifically, how effective have GEF-led projects been in influencing participant behavior and solving problems around the common pool resource? By relying on Miles and Underdals' effectiveness measures we look at both changes in human behavior and changes in the biophysical environment [Miles et al., 2002]. This assessment of institutional arrangements along the Danube focuses on four broad implications for river basin management in the basin including: (1) the creation of scientific knowledge, (2) the strengthening of multicountry regional governance institutions, (3) the coordination between expanding participants, and (4) the demonstration of clear ecological improvements. This research reports success in the first two outcomes but finds a less impressive record for the latter two.
4.1. Creating Scientific Knowledge
 Through its transboundary diagnostic analysis-strategic action plan (TDA-SAP) process GEF has done an excellent job of creating and disseminating scientific knowledge as well as building a sense of trust among the participating individuals. The intention is that this joint effort early on may then “lead to more formal and sustainable legal frameworks among nations in order to keep the initiative moving after the GEF project” [Duda and La Roche, 1997, p. 135]. Projects in the Danube follow this phased approach.
 The first stage involves a TDA, a joint fact-finding endeavor of the participating countries to determine the environmental and water threats, examine the root causes of degradation, and reveal the underlying social issues in the region. Collaborating nations create interministerial technical teams, which assemble information on water-related environmental problems in their part of a particular basin or ecosystem. These committees lead national planning workshops and promote country policy and legal reform. They provide dialogues with subnational units of government and stakeholders on the ground. Through workshops and seminars the public is informed and consulted. The Danube projects report that dozens of regional workshops or seminars were held involving approximately thousands of participants to identify the major problems, their causes, and solutions. As a result of these workshops a series of working groups of government, civil society, and local experts were established to accompany the SAP preparation process. Participating countries then share this information with neighboring countries in a multinational committee setting. The TDA then forms the basis for a SAP, addressing the region's shared environmental and water priorities. The third stage is the implementation of the SAP and involves integrating the regional priority actions into national development plans and involves pilot activities and capacity-building projects in participating countries. Pilot projects can help governments better carry out their activities and improve local knowledge which is critical to successful implementation [World Bank, 1998]. An NGO network was intentionally created and funded to help boost stakeholder participation. National water plans provide a framework needed for promoting an integrated perspective on water sector issues [Saleth and Dinar, 2000, p. 195].
 In the Danube region the SAP is intended to provide a framework for achieving goals outlined in the Danube Convention. It also aims to support the transition from central management to a decentralized strategy of regulation. The Danube SAP was revised in 1999 on the basis of the TDA and national review report and national planning workshop reports created by the participating countries. The SAP and its revisions created a basis for the ICPDR Joint Action Plan that is now the framework for the implementation of the Danube River Protection Convention. A Danube Database, developed within the Danube Pollution Reduction Programme, allowed each country to report to the convention the status of interventions implemented under the SAP. Today, countries are reporting on the status of the Joint Action Programme implementation.
 The TDA-SAP phased scientific process promotes integrated water resources management. Most scholars and practitioners now recognize integrated management as the best approach to resource management [White, 1998]. Incorporating environmental, economic, and social considerations based on the principle of sustainability, this approach involves broad stakeholder participation and capacity building [Young et al., 1994, p. 45]. Such a diagnostic and prescriptive approach is at the heart of integrated water management and will ultimately go a long way toward preventative care as opposed to mitigation and remediation.
4.2. Strengthening Multicountry Regional Governance Institutions
 In addition to creating scientific knowledge, Danube project activities have succeeded in promoting the strengthening of multicountry regional governing bodies. The 2003 United Nations World Water Development Report highlights the need for international institutions as a critical lesson in “hydrodiplomacy” for the international community [United Nations, 2003, p. 318]. The International Commission for the Protection of the Danube River is at the center of GEF-funded international water projects. This governing body seeks to implement regional and international treaties and conventions. GEF-funded projects provide incentives for countries to participate in problem solving and collective action through the commission. In the collaborative process, countries learn from one another. As Danube Regional Project Manager I. Zavadsky points out, “Because more developed countries with more mature administrative and implementation structures are part of the process, they provide examples and leadership, and help guide the whole project toward fulfilling ambitious goals” (Zavadsky, personal communication, 31 October 2003).
 NGOs participate in project decision making at the regional level by holding observer status with the commission. Both the World Wildlife Fund (WWF) and the Danube Environmental Forum have actively participated in project planning and implementation in the region. The World Wildlife Fund is particularly active in regional wetlands issues and works to build capacity and strengthen the Danube Environmental Forum network [WWF, 2001]. In practice, NGOs, such as WWF, are limited in their ability to attend all of the various regional meetings, thereby hindering their full participation (D. Tickner, Freshwater Team Leader, World Wildlife Fund-International, Danube-Carpathian Programme, personal communication, 7 October 2003). Moreover, given central European traditions, traditional institutions such as the church, older universities, and the mainstream media may be better at raising public awareness in the region than environmental organizations alone [Manikowski et al., 1999, p. 12]. According to A. Garner, Environmental Specialist with the UNDP/GEF Danube Project, future funding will place a greater emphasis on community involvement and public participation in regional decision making and likely involve the creation of a Water Council or stakeholder forum (Garner, personal communication, 2003).
 In addition, GEF activities help to strengthen the contractual environment through the passage of national legislation to implement country commitments. National legislation has resulted in all participating countries along the Danube River Basin and the respective commission secretariats maintain records of such relevant legislation. Of course, implementation and compliance with such legislation will be the true test rather than the mere existence of such legislation. In addition, monitoring and verification practices serve to increase the likelihood of collective action and improves the contractual environment [Haas et al., 1993]. As Duda and La Roche [1997, p. 136] suggest, “confidence in this verification function is the key to building relationships among nations. They need to feel that they are ‘in this together’ and that transparency actually exists, rather than one country gaining at the others' expense.” Through creating scientific knowledge and strengthening multicountry regional institutions, GEF has produced significant outcomes in terms of modified human behavior. Through such activities, GEF has helped to create regional public goods along the Danube.
4.3. Coordinating Between Participants
 Some scholars have suggested that cooperation is less likely to occur the larger the number of actors [Dietz et al., 2002, p. 23]. Indeed, coordination of project activities serves as a challenge to these new institutional arrangements along the Danube. As discussed, GEF's institutional design involves many agencies, relying on the requisite strengths of GEF's three core implementing agencies: UNDP, UNEP, and the World Bank. Coordination is further challenged by project activity at multiple levels including multicountry, regional, national, intersectoral, and local. As such, resolution of interagency conflict and integration between agencies is a major element of agency work in GEF's international waters program (A. Hudson, principal technical advisor, International Waters, United Nations Development Programme, telephone interview, 15 October 2003).
 In addition, since GEF relies on the incremental cost paradigm, requiring recipient countries to demonstrate other financial investments, small grant support in the Danube region is contingent upon leveraging additional funds and on participating countries paying their dues to the their respective commissions. In this region, external funding has included support from the European Union's TACIS Interstate Programme and the PHARE MultiCountry Programmes, World Bank loans, European Bank for Reconstruction and Development, and efforts from the United States, Netherlands, United Kingdom, Denmark, and Canada. An evaluation of the Danube Program found a lack of communication between the various important actors including GEF, UN Development Programme, Phare, and the World Bank. Moreover, the World Bank's refusal to fund transboundary projects negatively impacts effective cooperation in the region. So too has the change in Phare rules (from a multicountry to a single country approach) and the take over of former Phare projects by TACIS hindered effectiveness and efficiency in the region [Manikowski et al., 1999, Annex VII, p. 12]. Such institutional preferences and policy change impact efforts at improved integration and collaboration in the region.
 In 1998 the UN Development Programme launched the International Waters Learning Exchange and Resources Network (IW:LEARN), a web-based system to assist GEF participants in improved communication and the transfer of knowledge concerning international water projects. Biennial International Waters Conferences also serve to bring participants together to share experiences and begin the development of best practices of international waters management. There are high costs to this approach, including appropriate technological access and transportation expenses. It remains to be seen if such a network can improve the coordination of institutional practices or decision making.
4.4. Demonstrating Clear Ecological Improvements
 There is the additional challenge of demonstrating clear environmental impacts in the region. Prior analysis of GEF's international waters focal area found that from the perspective of performance indicators, most of the impacts were related to processes with modest improvements in the environmental status indicators for ecosystem quality for the Danube ecosystem [GEF, 2002, p. 34]. According to GEF, “For projects in damaged transboundary systems, years may go by before a sufficient number of countries have implemented sufficient stress reduction measures (on-the-ground measures implemented by collaborating countries) to enable a change to be detected in the transboundary water environment” [Duda, 2002, p. 8]. The Joint Action Programme for the Danube River Basin, 2001–2005, articulates clear outcomes expected including a reduction of pollution loads for organic matter, nutrients, and heavy metals and a reduction of pathogens and micropollutants [ICPDR, 2001, p. 28]. For now, however, much of the evidence of ecological improvement, like water quality and fish catches, is anecdotal, and we still await clear and consistent evidence of environmental improvements. Ultimately, given the emphasis on “process” in GEF's international waters program, changes in the biophysical environment may be slow coming. A. Hudson (telephone interview, 2003) suggests that it may be a 20–30 year time frame in these larger ecosystems for environmental impacts to be revealed.
 Indeed, countries along the Danube have substantial advantages. Despite the recent management challenges in the Danube Basin, including severe flooding, accidental toxic spills, armed conflict in former Yugoslavia and Kosovo, and the controversy over the Gabceikovo-Nagymaros hydroelectric project, there is a longer history of cooperation in the Danube region [Murphy, 1997]. Indeed, at least one skeptic thinks that cooperation is still in its “infancy” in the Danube region, finding suspicion and antagonism hindering cooperation in the region [Assetto, 2002]. Nonetheless, a great deal of communication is occurring that would not have occurred without GEF-led activities in this region, including the production of baseline scientific knowledge and the development of regional governing institutions. Moreover, the Danube River Protection Convention, which entered into force in 1998, might not have come about absent GEF funding and leadership. Ultimately, however, GEF will need to demonstrate clear and consistent ecological improvements in the Danube if this geographic region is to serve as a model for river basin management worldwide.
5. Lessons Learned
 GEF-led collaborative activities in the Danube River Basin reveal broader implications for river basin management. Specifically, activities in this region reveal three critical lessons that can inform future river basin institution building and decision making. First, GEF-led activities in the Danube highlight the importance of appropriately creating and disseminating scientific data pertaining to the river system. It is vital that participating states share existing data and work together to gather transboundary data. GEF's TDA-SAP process is instrumental in targeting the most critical transboundary problems, their causes, and impacts. It also serves to bring together diverse stakeholders, including state officials, local scientists, and NGOs. In doing so, it takes some of the “politics” out of the process and helps to build a sense of trust among the participants. The interministerial committees established through this process, as illustrated by the Danube case study, are a necessary component of water-related coordination at the national level. Of course, not all countries treat these committees equally as the Danube case study also reveals. While such interministerial committees allow for an effective performance of nutrient reduction and control tasks in Germany and Austria, these committees are less effective in the other participating countries [UNDP and GEF, 2003, pp. 20–21]. Moreover, the baseline information provided is essential if institutions are to report evidence of the ecological improvement. The gathering of scientific information is not static however, but rather is a dynamic process that will change as new problems emerge and old ones are resolved. The strategic action plan in the Danube was successfully revised to reflect new information gathered within the participating countries. It is critical for those involved to recognize the fluid nature of this and build a process that can account for such adaptation.
 Second, activities in the Danube illustrate the importance of regional governance bodies. Such river basin organizations are the decision-making bodies that translate the scientific data (environmental problems identified) into action. It is necessary to include NGO representatives in the decision-making process at the river basin organization level, and as the Danube case study reveals, it is important to do so early in the design process. Given the diversity of NGO strength and organization, this may entail a building of the participatory process and a significant financial investment. The river basin organization also provides a forum for the reporting and monitoring of participant behavior, eliminating a major collective action problem and stumbling block to cooperation. The International Commission for the Protection of the Danube River, the main decision-making body under the Danube River Protection Convention, serves as a model for other multicountry arrangements to ensure sustainability in financing and political commitment after GEF grant money expires. Ultimately, meaningful national legislation from the participant states will be a necessary condition to meet commitments and resolve environmental problems identified through the TDA-SAP process.
 Finally, it is necessary to address coordination issues. The new multicountry partnership approach of GEF requires a high degree of administration to manage and coordinate the multiple levels of activity. Regional governance bodies, like the river basin organization, can help provide a central forum for dialogue and actions to be taken, as demonstrated in the Danube case study. Strong leadership at the regional level, illustrated by the ICPDR secretary in the Danube basin, is also a vital component to effective administration. Moreover, dialogue can help spur the creation of regional agreements to better manage the transboundary resource as it did in the Danube basin. Ultimately, a connection to a larger institutional regional framework can improve coordination over the long run within a particular region. In the Danube River basin, in particular, connection to European Water Framework Directive may help overcome coordination difficulties. This directive serves as a new framework for the implementation of a number of European Commission Directives, intended to give coherence to these directives and provide linkages to regional conventional and agreements. An act that holistically enhances water resource management and pollution control by valuing the ecological integrity of the river, it adopts an integrated catchments area management approach whereby countries modify environmental laws to comply with the directive. The European Commission has been active in its support of the International Commission for the Protection of the Danube River. Such an approach can help bring member states to the table and provide new opportunities for financing in this region. In the Danube region, Hungary, in particular, has been fairly active adjusting its water regulations to meet the European Union Directive [Vimola, 2000]. As P. Weller, the Commission's Executive Secretary, points out, “The fact that the countries are applying European Union legislation throughout the region [already] without the obligation to do so is a mark of success” (Weller, personal communication, 5 December 2003). The formation of the Danube-Black Sea Task Force, known as DABLAS, in 2002 is designed to apply the directive to programs in this region and coordinate future action.
 GEF activity in the international waters arena represents a new multilateral cooperative international development aid model. Its regional water projects aim to resolve the collective action problems that characterize common pool resources like transboundary waters, by emphasizing river basin organizations as regional public goods. GEF operates as both a “learning facilitator” promoting the creation and sharing of scientific knowledge and an “enhancer of cooperation” by working to strengthen and create treaties and regional governance bodies [Young, 1999]. As such, its offers insight into the search for effective institutions to sustainably manage common pool resources.
 On the basis of this analysis, GEF has demonstrated success in creating scientific knowledge and strengthening multicountry regional institutions in the Danube River basin. However, great challenges exist, including coordination across the various participants and the demonstration of clear ecological improvements. GEF-led collaborative activities in the Danube River Basin reveal three critical lessons that can inform future river basin institution building and decision making, including the importance of appropriately creating and disseminating scientific data pertaining to the river system, the need for regional governance bodies for integrated river basin management, and the necessity to address coordination issues throughout project planning and implementation. Despite the struggles that remain in the basin, the past 10 years of GEF activity along the Danube River has provided a solid foundation for integrated management and improved coordination around transboundary resources and warrants our attention.