World Bank Discussion Paper No. 356.The World Bank has become the world's largest lender in the health, nutrition, and population (HNP) sectors, requiring the institution to seek ever greater evidence that its work is effective on the ground. This paper reviews the literature on the causes of observed changes in health and fertility levels, on the evaluation of policies, and on programs designed to accelerate these changes. It presents a framework that delineates the relationships between Bank activities in the HNP sectors, the characteristics of a health care system, household behavior, and changes in health outcomes. The paper also describes a strategy for assessing the development effectiveness of the Bank's work in these sectors. The underlying thesis is that changes in health policy and improved outcomes depend on the the demand for health services and on institutional incentives that drive health care system performance.