Colombia - Secondary Education Project

Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT (Core ICR) Report No. 22017 ONA LOAN IN THE AMOUNT OF US$90.0 MILLION TO THE REPUBLIC OF COLOMBIA FOR A SECONDARY EDUCATION PROJECT PROJECT ID: P006866 L/C NUMBER: 36830 March 29, 2001 Human Development Sector Management Unit Country Management Unit for Colombia, Mexico and Venezuela Latin American and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange rate Effective December, 2000) Currency Unit = Colombian Pesos (COP) COP 2,229.18 = US$ 1.00 FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS CREM Municipal Center for School Resources CREP Institutional Center for School Resources DANE National Administrative Department of Statistics DNP National Planning Department FINDETER Financial Company for Territorial Development PLC FIS Social Investment Fund ICFES Colombian Institute for the Promotion of Higher Education MEN Ministry of National Education MHCP Ministry of Finance and Public Credit PEI / PIM Institutional Plan for School Improvement PEM Municipal Education Plan SABER National Evaluation System for the Quality of Education SED Departmental Education Office SNC National System for Co-financing SEM Municipal Education Office UNDP United Nations Development Program UPCE Project Unit for External Loans Vice President: David de Ferranti Country Management Unit Director: Olivier Lafourcade Country Sector Leader: Eduardo Velez Sector Management/Unit Director: Xavier Coll Task Manager: Martha Laverde  FOR OFFICIAL USE ONLY COLOMBIA SECONDARY EDUCATION PROJECT (LOAN 3683-CO) CONTENTS Page No. 1. Project Data 1 2. Principal Performnance Ratings 1 3. Assessment of Development Objectives and Design, and Quality at Entry 2 4. Achievement of Objectives and Outputs 7 5. Major Factors Affecting Implementation and Outcome 18 6. Sustainability 22 7. Bank and Borrower Performance 22 8. Lessons Learned 25 9. Partner Comments 28 Annex 1. Key Performance Indicators/Log Frame Matrix 44 Annex 2. Project Costs and Financing 45 Annex 3. Economic Costs and Benefits 46 Annex 4. Bank Inputs 46 Annex 5. Rating for Achievement of Objectives/Outputs of Components 48 Annex 6. Ratings of Bank and Borrower Performance 48 Annex 7. List of Supporting Documents 49 Preliminary work on this document was undertaken by Joel Reyes with the assistance of Marisella Aguilera and Darlyn Meza whose contributions are gratefully acknowledged. After Mr. Reyes's transfer to the Bank's Guatemala Country Office, Martha Laverde, task manager of the project, took the responsibility to complete and finalize the document as well as lead the ICR Mission with the Colombian Government. The report is based on project documentation and interviews with officials from the Ministry of Education (MEN) and other relevant National Agencies as well as with senior project staff. Two workshops were held with project stakeholders who provided useful insights and comments. The collaboration of Rosa Cristina Siabato who organized the stakeholders workshops is gratefully acknowledged. Assistance in preparation of the final report was provided by Maria Elisa Caro and Veronica Jarrin. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: PE-P006866 Project Name: Secondary Education Team Leader: Martha Laverde TL Unit: LCSHE ICR Type: Core ICR Report Date: March 29, 2001 1. Project Data Name: Secondary Education L/C/TFNumber: 3683 Country/Department: COLOMBIA Region: Latin America and Caribbean Sectorl subsector: ES - Secondary Education Region KEY DATES Original Actual PCD: NA Effective: 11/09/94 03/28/95 Appraisal: 11/19/93 MTR: 06/06/96 11/06/96 Approval: 12/16/93 Closing: 12/31/2000 12/31/02* * The 1999 amendment to reallocate all undisbursed funds to the reconstruction of the Coffee Zone changed the closing date to 2002. However, all activities related to the Secondary Education project as such were terminated on December 31, 2000. Borrower /Implementing Agency: MIN. OF EDUCATION Others Partners: ICETEX, FINDETER AND FIS STAFF Current At Appraisal Vice President: David de Ferranti Shahid Husain Country Manager: Olivier Lafourcade Yoshiaki Abe Sector Manager: Xavier Coll Jacques Van der Gaag Team Leader at ICR: Martha Laverde/ Joel Reyes Michael Potashnik ICR Primary Author Martha Laverde with inputs from Marisella Aguilera and Darlyn Meza 2. Principal Performance Ratings (HS= Highly Satisfactory, S = Satisfactory, U = Unsatisfactory, HL = Highly Likely, L= Likely, UN = Unlikely, HUN =Highly Unsatisfactory, H = High, SU = Substantial, MS= Moderated Satisfactory, M = Modest, N = Negligible) Outcome: S Sustainability: L Institutional Development Impact: L Bank Performance: MS Borrower Performance: MS QAG (if available): N.A. Quality at Entry: U Project at Risk at any time: YES  3. Assessment of Development Objective and Design, and Quality at Entry 3.1. Original Objectives: The educational policies adopted in the country between 1991 and 1994, in the context of thePlan de Apertura Educativa (Educational Expansion Program), aimed principally to achieve higher levels of educational attainment of the labor force in order to raise its productivity and contribution to economic growth. Therefore, the efforts in the education sector focused on giving fresh impetus to the increase in coverage and the improvement of the quality of education available to the Colombian population. To support the initiatives of the Government, the project envisaged the following objectives: (i) contribute to the implementation of the new national strategy of co-financing with the departments and municipalities for education investments; (ii) provide incentives to regional and local governments to achieve national education targets; and, (iii) support the assumption by municipalities of an expanded role in education by building local capacity for the planning, co- financing, and implementation of investments. Specifically, the basic guidelines of the national policies in connection with basic and secondary education were oriented towards: (i) massively increasing enrollment in secondary schools and improving the quality of education at all levels; (ii) advancing the establishment of the system of decentralization and modernization of the education system; (iii) developing financial mechanisms to solve problems of equality; (iv) promoting competition among the private and public schools as a means of increasing the quality of education; and, (v) increasing overall investments in education, at both the regional and local level. The original project objectives were consistent with the Bank strategy for Colombia during the FY93-96 period, that placed special emphasis on human resource development and poverty reduction within an overall agenda of support for private sector development, decentralization, and growth with equity. The Bank supported the Government's policies and programs to reduce poverty and income disparities with effectively targeted social outreach programs which enhanced equity, efficiency and service quality. It also supported the Government's strategy to increase social spending, improve responsiveness to local needs through decentralization, and improve efficiency by promoting private delivery of services and replacing subsidies to service producers with targeted grants. 3.2. Revised Objectives: No change 3.3. Original Components: In accordance with the objectives of the Project, four components were designed: (i) increasing coverage; (ii) expanding access through the Voucher Program; (iii) enhancing educational quality through the funding of Institutional Plans for School Improvement (Proyectos Institucionales de Mejoramiento Escolar -PIMs-); and, (iv) strengthening the management of educational services. The following table presents the original budget for the four components. 2  Table No. 1: Original Allocation of Resources per Component Distribution of resources (US$ millions) Components Credit Counterpart Total funds A. Increasing coverage: obtained through funding of the: (i) new school constructions and enlargement; and, (ii) rehabilitation of the 37.0 16.8 53.8 installations and facilities of the public basic and middle secondary education institutions. B. Expanding access: Supports the access of private secondary schools which have the capacity to accommodate students from low-income 4.0 3.5 7.5 families who do not have access to basic and middle state institutions in a participating municipality or district. C. Educational Quality Enhancement: obtained through the funding of Institutional Plans for School Improvement (Planes Institucionales de Mejoramiento Escolar -PIMs-),' includes the training of 33.0 27.3 60.3 headmasters and teachers, the supply of school textbooks, materials and teaching equipment. D. Management and Institutional Strengthening: In order to help the departments (states) to carry out their new functions and responsibilities 6.0 6.1 12.1 arising from the decentralization process, oriented towards the formulation of policies and the overseeing of the System. E. Unallocated 10.0 6.7 16.7 TOTAL 90.0 60.4 150.4 60% 40% 100% The project was originally designed to support schools in 87 municipalities in 11 departments. In reality, 89 municipalities were reached. 3.4. Revised Components. In 1996, the Project's administrative and financial management procedures were reoriented, without changing the original objectives and components as set forth in the Loan Agreement. The purpose of the adjustment was to adapt the implementation mechanisms and procedures to the new legal educational context, as well as the new institutional and educational policies of the country. In conformity with the country's decentralization policies, project implementation was simplified in terms of operating procedures and more attention was given to the task of increasing the participation of the local communities. Implementation during the first years of the project (1994- 1996) had revealed that the dispersion of activities under the various components led to inefficiencies in the use of the loan resources. The central authorities had initially distributed the loan resources across seven distinct investment lines, however, only one of these financing categories was accessible to the municipalities. For example, one year civil works would be designated and the following year educational materials would be designated. To simplify procedures, the seven budgetary lines originally set up were combined into two groups with each one targeting a specific type of subproject: (i) the Municipal Education Subprojects (Subproyectos Educativos Municipales) which focused on increasing coverage in grades 6 to 11, improving the quality of education, and strengthening management at the municipal level; and, (ii) the Institutional ' In the nomenclature of the Law 115/94, the PIM become Institutional Education Plan (Proyectos Educativos Institutionales -PEIs-). 3  School Improvement Subprojects (Subproyectos Educativos Institucionales) which financed the proposed PEIs oriented to improve the quality and management of education at the school level.2 With this adjustment, the central government's decentralization to the municipal level was better supported by the project and school autonomy was strengthened. Schools gained the capacity for planning, managing, executing and evaluating the processes defined in each one of their institutional improvement projects. For the preparation of the Municipal Education Plan (PEM), technical assistance was organized at the national level by the Ministry of Education (MEN), consisting of: (i) technical guidance to the municipalities for the situational diagnosis of the education sector and the design of the PEM; and, (ii) information on how to gain access to loan resources and national funds available through the Social Investment Fund (FIS) and Financial Company for Territorial Development (FINDETER). While the project's effectiveness was enhanced by the above-mentioned restructuring, the transfer of project resources to the municipalities was seriously constrained by the acceleration of the financial crisis experienced by the country and the limitations of the new Co-Financing System3 for education.,. The following difficulties coming from the co-financing system were observed: (i) the scheme was too complex with too many entities involved in the approval process of the sub-projects presented by the Local Authorities; (ii) decision-making remained centralized at the national level; (iii) there were significant inequalities in the allocation of budgets to the various municipalities, with the result that the weakest municipalities with the greatest needs had less chances of getting resources; and, (iv) the FIS operated as a very politicized and bureaucratic institution, at both the national and local levels. As a result of these problems, in August 1998, the National Planning Department (DNP) decided to cancel the loan altogether. A proposal was made to use the undisbursed resources for a Social Sector Adjustment operation. Although this did not happen, in the meantime, no allocation for use of loan resources nor counterpart funds were assigned for the Secondary Education project in the 1999 budget, apart from those necessary to finance the commitments already made. In January 1999, as a result of the earthquake in the coffee production zone (Eje Cafetero), the Government decided to use the remaining loan resources to support the reconstruction of the affected zone, together with the resources of three other projects from the Bank portfolio and some from the IDB. After that date, all project funds were transferred to the Reconstruction Fund for the coffee production zone. This decision was taken by DNP over strong objections from MEN because of the latter's concern that the municipalities would be left without resources and without the possibility, at least at that time, of gaining access to external loans through the co-financing modality. As a result of this decision, the financm; envelope for the various components was modified as shown in table 2 below: 2This Subproject groups the following components: support to initiatives that improve management capacity, make pedagogical management more dynamic and promote community participation in the institutions, teacher-training, the provision of educational material and the improvement and/or rehabilitation of infrastructure. 3The national co-financing system started in 1993 as an instrument to finance social investments with resources from the central government and the local governments. Specific institutions were established at the national and local levels to implement this co-financing system. 4  Table No. 2: Definitive Allocation of Resources per Component Components Distribution of resources (US$ millions) Credit Counterpart funds Total A. Increasing coverage 14.7 19.1 33.8 B. Expanding access: 1.8 22.6 24.4 C. Educational Quality Enhancement 19.7 7.5 27.2 D. Management and Institutional Strengthening: 4.1 1.5 5.6 TOTAL 40.3 50.7 91.0 3.5 Quality at Entry. ICR Rating: U The design of the project responded directly to the priorities defined by the Government during the 1991-94 period. These objectives were maintained and strengthened during the implementation of the national and local subprojects. It should be noted, however, that the design of the Secondary Education project may not have been realistic in its plan to introduce and consolidate such important reforms within the lifespan of a single project. It would have been more appropriate to establish intermediary targets and to design the implementation of the reforms over a longer period of time. The Staff Appraisal Report (SAR) identified the following risks as the main threats to project implementation: (i) delays due to the weak implementation capacity of MEN, FIS and other government agencies; (ii) the institutional weakness of local government; (iii) reluctance of the local governments to participate fully because of a lack of confidence in the central government; (iv) the investment restrictions from the local governments for secondary education facilities according to the targets; and, (v) the lack of political acceptance for the voucher program. The measures taken to mitigate risks were partially adequate to manage most of the risks mentioned above. Some important risks, such as the large quantity of actors involved in project implementation, frequent turnover of senior MEN staff, various legal modifications, the macroeconomic situation, and the rising violence, were not given sufficient weight. Legal aspects: The design of the Secondary Education Project started during the 1991-94 period, when the Plan de Apertura Educativa (Education Expansion Plan) was being prepared and the country was going through a profound constitutional change. The project faced various legal modifications like: The potential impact of key changes in regulations linked to the new decentralization law, the Law 60 on Competencies and Resources (La Ley 60 de Competencias y Recursos), the creation of the Social Investment Fund (FIS) and the new General Education Law (Ley General de Educaci6n). These laws were incorporated in the Secondary Education Project in the final preparation phase and during negotiations, to reflect the need to support the new decentralization process and the related co-financing arrangements between the national and local levels. Another important challenge came from substantial changes in the country's education policies, especially with the new Education Law promulgated in 1994. It made basic education compulsory and redefined basic education to include grades 0 to 9 and secondary education to include (grades 5  10 and 11). The old secondary education system recognized as grades 6 to 11, which was in place when the project was designed, was phased out. At the level of the municipalities, this change resulted in the physical, technical and administrative integration of all institutions previously involved in the delivery of the various levels forming the new Basic Education cycle. The mechanisms of distribution of budgetary resources and the education statistics systems were also modified to fit the new basic education concept. All of this meant that the original design and focus of the project became out of line with what the country was proposing. Implementation of the project finished during the transition phase to MEN's new system, which began in 1994. Economic Variables: During almost the entire project implementation period (1994-2000), the country experienced a situation of acute fiscal crisis which made it impossible to use either loan proceeds or counterpart funds as scheduled. At the same time, the Secondary Education Project was instrumental in supporting the new National Co-Financing System that defined the distribution of resources between the central and the local authorities (department and municipal). The implementation of this system, however, turned out be very difficult because of its complex procedures and politicization. In the end, it became necessary to rethink the operation system and to adopt the mechanism of integrated Projects PEM/PEI - Municipal Education Plan and Institutional Education Plan. Rising Violence: Above all, violence in many parts of the country had a major impact on the project. In many instances, the municipal authorities had to refocus their attention to deal with the concrete consequences of the armed conflict. In cities like Medellin, Cartagena, Pasto and Cucuta, emergency programs had to be put in place in order to attend to the education needs of displaced youths from the municipalities directly affected by the civil war. The mayors of these municipalities were also compelled to reallocate considerable resources to programs to alleviate the consequences of the war, for example in the health sector. In smaller municipalities like Maria la Baja in the Department of Bolivar, the presence of different fighting factions prevented the authorities from visiting the affected localities to look at the education needs and plan the necessary investments. Multiplicity of Actors: In particular, the intervention of three main co-executors (ICETEX, FINDETER, and FIS) with limited institutional capacity to administer a large and complex investment program made it very difficult to coordinate project activities in an effective manner. Unclear responsibilities and operational mechanisms for the implementation of some of the financing categories, compounded by difficulties in coordinating procedures among the various institutions involved, hampered project implementation and loan disbursements. Turnover of Senior MEN Officials: One of the major implementation difficulties was the absence of leadership and ownership by MEN staff at the central level. There were eight Ministers and six coordinators during the lifetime of the project. Because of frequent turnover, more often than not, project leadership and management did not rest with technical staff of MEN, but with outside contracted consultants. Contrary to what was expected, implementation capacity turned out to be much better at the local level where the teams in the SEMs were characterized by high levels of leadership, commitment and stability. 6  4. Achievement of Objective and Outputs 4.1. Outcome/Achievement of Objective The overall outcome of the project is rated Satisfactory The projected objectives were reached in general. Even though the project was terminated before the planned closing date and a significant proportion of the loan was reallocated to the reconstruction of the Coffee Production Zone, the overall outcome is satisfactory because the municipalities invested more resources than originally planned to finance project activities. The fact that the project was instrumental in mobilizing additional resources is in itself a mark of success. The supporting information to measure the degree of achievement of the Project objectives was collected through: (i) indicators of co-financed educational investments in keeping with national policy; and, (ii) indicators of institutional interventions at the local level, such as training programs, formulated development programs and the existence of other activities connected with institutional strengthening of both the Territorial Entities and the schools themselves. The quantitative information used to calculate the indicators is presented in Annex No. 1. The Secondary Education project was one of the Government's main instruments to promote increases in education budgets at the municipal level within the context of the new decentralization policy. The project's success in achieving this result is illustrated by municipal levels of counterpart funding that are significantly higher than those originally planned for all components. Following the positive outcome of the voucher program initiated under the project, MEN abandoned the traditional approach of giving subsidies linked to the supply-side and promoted instead, through the General Education Law, a system of incentives in all departments and municipalities to give demand-side subsidies which are now widely in use throughout the country. The Secondary Education project had a very positive impact in terms of permitting the development of methodologies and instruments to assign higher priority to education in the plans and programs of local governments. A new culture of planning by objectives and projects was introduced at the level of the municipalities and the schools themselves, which resulted in higher levels of autonomy for the schools and better planning capacity in the municipalities. As a result of the project's restructuring, the technical assistance strategy was changed to focus on selected municipalities, for which the department assumed the role of advisor and overseer, improving the overall implementation process. Under the new approach, the departments were able to exercise a more systematic control of project design and execution at the local level. There was also a better understanding of relative responsibilities between the different national actors and the municipalities. 7  4.2. Outputs by components: INCREASING COVERAGE ICR Rating: S The first component, which focused on increasing coverage, financed new construction, as well as the rehabilitation and remodeling of existing installations and equipping them with the necessary facilities. The school construction sub-component was funded through loans given by FINDETER. The municipalities had to demonstrate solvency and accept the contractual commitment involved in the FINDETER loan. The financing arrangement went as follows: the municipality contracted a loan equivalent to 50% of the total amount, the municipality itself contributed up to 30% with its own resources, and the last 20% came in the form of a central govemment grant administered through the FIS. All rehabilitation and remodeling works were carried out by the Social Investment Fund. The FIS financed 80%, using the resources of the Bank loan, and the municipalities financed the remaining 20%. This was the most successful component in terms of achieving the original targets. The number of additional classrooms, either through new construction or rehabilitation of existing facilities, exceeded the project target by 63%. This resulted in significant increases in the enrollment levels of the relevant population groups, as reflected in the evolution of the gross and net enrollment rates for the 12 to 17 age group. The gross enrollment rate rose from 75.4% in 1994.to 87.7% in 1998, and the net enrollment rate from 56.9% in 1993 to 67.9% at the end of the project period4. Enrollment in public schools had a significant increase, close to 5% per year during the four years of execution. The share of the public sector went from 48% in 1994 to 53% in 1998. Table No 3: Evolution of enrollment in the municipalities targeted by the Secondary Education Project (1993-98) Grades 1994 1998 Annual Growth Rate 6