Building analytic capacity in Bolivia : the Social Policy Analysis Unit (UDAPSO)

. . Research Project 67961 Improving the Policy Relevance of Living Smdards Me4surune~Shrrfy surveys Research Paper Series Paper No.2 Building Analytic Capacity in Bolivia: The Social Policy Analysis Unit (VDAPSO) Manuel E. Contreras October 23, 1995 Poverty and Human Resources Division Policy Research Department The World Bank This paper is a product of thq research project, "Improving the Policy Relevance of Living Standards Measurement Study Surveys" being carried out under the guidance of Margat Grosh and Paul Glewwe by the Poverty and Human Resources Division of the Policy Research Department of the World Bank. The findings, interpretations, and conclusions are the authors' own and should not be attributed to the World Bank, its Board of Directors, or any of its member countries.   BUILDING ANALYTIC CAPACITY IN BOLIVIA: THESOCIALPOLICYANALYSISUNIT (UDAPSO) Manuel E. Contreras Harvard Institute for International Development and Universidad Cat6lica Boliviana (Final Draft October 23, 1995) Paper prepared for The World Bank Policy Research Department's Case Studies in Building Analytic Capacity in the research project "Improvingthe Policy Relevance of LSMS Surveys" (RPO-679-61). Acknowledg~~ents I thank the comments and suggestionsof Jere Behxman, ChristianD d ,Vicente Fretes, George Gray-Molina, Margaret Grosh, Menw Pradhan, Juan CarlosRequena, Eugene Szcpesy, Rosa Talavera, and Nico van Niekerk to earlierdrafts of thispaper. The errorsand omissionsthat remainare my sole responsibility.   Introduction Bolivia's experience with the Social Policy Analysis Unit (UDAPSO) shows that it is possible to improve the public sector's analytic capacity to formulate social policy, provided that at least the four following conditions are met: (i) adequate political support and concrete mission and focus for such an institution; (ii) strong management and leadership; (iii) favorable external and internal incentives to hire and maintain the best people available; and (iv) access to financial resources and first-class technical assistance. Moreover, UDAPSO's experience illustrates the complexities of developing a policy research iytitution in a developing country with a low human capital base and a weak social sector research tradition. It provides a case study of the issues of managing and developing research institutionsunder four interdependent dimensions: strategic management; collaborativeinstitutional arrangements; internal management, administration and supervision; and research operations, and confirms that "it is the acquisition, retention and effective utilization of this skiUs mix operatingwithin a scienn~callydriven value system that makes for effective research institutions."l This paper reflects on the experience of the author in setting up and mnning UDAPSO in the Bolivian government between 1992and 1994. It only briefly considersthe changes since the end of my tenure as Executive Director in April 1994 and the present. It endeavors to provide an account of a capacity building experience--from conceptualizationto implementation-, from the point of view of the practitioner. I intend to share with policy makers the lessons learned and bat can now be distilled with the benefit of short-term hindsight. In the process, I highlight the wider impact and externalitiesthat capacity building projects have, particularly in personnel development, and in the local research community. Although the literature on policy research institutes in developed countries is growing, it is still ~parse.~ In developing countries, there has been no methodic study of the 'Moses N. Kiggundu, "Managingresearch institutions in developing c o d e s : test of a model," Public Administrationand Development, vol. 14(1994): 201-222. Quote from p. 206, emphasisin the original. 2SeeJames A. Smith, The Idea B d m . Think Tanksand the Rise of the New Policy Elite (New York: The Free Press, 1991)for the U.S.;Lindquist, "Thinktanks or clubs? Assessing the influence and roles of Canadianpolicy institutes,"CanadianPublic Admhistmtion, vol. 36, no. 4 ( ):547-579 for Canada; and AlanJarman and AlexanderKouPnin, 'Public sector think tanksin inter- agency policy-making:Designing enhanced governmentcapacity," CanadianPublicAdmhMdion, vol. 36, no. 4 ( ):499-529 for the case of Australia.  evolution of these institutions3and so documenting this process is one of the objectives of this paper to contribute to comparative studies of social policy think-tanks. This is increasingly pertinent given the growing awareness of the importance of information and analysis in social policymaking, and the recognition that ""socialpolicy brokers" ...help to develop shared meaning and to build consensus on the formulation and implementation of social policy ...and have begun to play an interesting role in the developmentof integrated social policy agendas."4 Thus, the creation of UDAPSO in 1992 marked a transition in the way the Bolivian governmentproposed to address social development. It was a move away from the short-term project approach-as embodied in the Emergency Social Fund (ESF)(1985-1990) and its successor the Social Investment Fund (SIF) (1990to date)-toward long-term local capacity-buildingthat recognized the need to develop domestic capacity in problem identification and policy formulation within the public sect~r.~Its creation was a "distinctive development in public enquiryw6in social sector policy development and the start of multidisciplinary policy-oriented research which is key for social policy formulation, as will be shown in this paper. The external environment The Paz Zamora administration's (1989-1993) desire to institutionalizesocial policy research and analysis and strengthenits policy formulation capacity was due to its decision that social policy was going to be the main priority in its last two years in office. The economy was stabilized, there were positive macroeconomic indicators, and there was modest economic growth. There was consensus amongst the main political parties, opinion-makers and policy- 3Apossibleexception is Daniel Levy,Buildingthe Third Sector: I-atin America's Pri- vate Research Centersand Nonprofit Deveiopment, (Universityof Pittsburgh Press, 1996). 4FayDumt, "Roleof Information in SocialPolicymaking: Latin America and the Carrib- bean," in Daniel Morales-G6ma and MarrioTorres A. (eds.)Social Policy in a Global Society (Ottawa: IDRC,1995).p. 176. %ese experienceshave been documentedand analyzed by the actors themselvesand World Bank staff,see Gerardo Avila, FernandoCamperoand Jorge PatiiSo, Un pwntesobrela crisis. El Fondo Social deEhnergd, (LaPaz: Fondode Inversi6n Social, 1992),and SteveJorgensen, Margaret Grosh and Mark Schacter,Bolivia's Answer to Poverty, Economic Crisis, and Aaustment. World Bank Regionaland Sectoral Studies(Washington,D.C.:The World Bank,1992). 'Quote from Evert A. Lindquist, "Thinktanks or clubs?"  makers that the challenge ahead was to increase growth rates, and get the benefits of a stabilized economy to the majority of the people. Investment in human capital was seen as being key in achievingthis. This view was promulgated in the Social Strategy issued in September 1991. That document definedthe government'spriorities in the social sectors and established the guidelines for action. Human capital development was the strategy's comerstone, along with efforts to improvethe efficiency of social expenditures, and to target social interventions toward the poor. The Ministry of Planning and Coordination, the Senior Ministry in Bolivia, set up UDAPSO based on the successful UDAPE model (the economic think-tank establishedwith USAID support in 1984). UDAPE gathered, analyzed and disseminated data on macroeconomic issues. With Harvard Institute for International Development (HID) assistancebetween 1987and 1992, it monitored Bolivia's macroeconomic indicators. HID helped develop the analytical skills of UDAPE's staff in general equilibrium models and sophisticated economic analysis that enabled UDAPE to be a key player in negotiationswith the IMF. Indeed, with macroeconomic stability, "UDAPE became the watchdog of the nation's economy.n7 By 1990, UDAPE had done important sector work with various line ministries. Within this context, it developed the government's September 1991Social Strategy document. To a large degree, the governmentcreated UDAPSO under the Ministry of Planning to pursue further and implementthis strategy. UDAPSO followed closely the internal organization of UDAPE. The fact that both institutions where in the same ministry and had regular and direct contact with the Minister facilitated close coordination between them. The development of UDAPSO starting in 1992 must be seen in the context of a series of favorable external conditions. At the macro level there was a strong perception in top government circles and in public opinion that an explicit social policy was necessary. On the one hand, the government realized it had to show more actions and results in the social sector, both to' maintain popular support for its economic reform program and to assure success in the general elections in 1993. Simultaneously,there was a genuine belief amongst the more enlightened members of the governmentand key policy-makers that it was necessary to move along the reform process and concentrate on human development to make the adjustment process more viable, and to increase sustained economic growth. Moreover, multilateral and bilateral international aid agencies also were proposing that once countries stabilized their economies, it was imperative that they address social development in a climate of structural 70n UDAPE'sdevelopment see Ricardo Godoy and Manuel E. Contreras, "Bolivia"chap- ter presented in HIID Conferenceon Capacity Building, Bermuda, April, 1995.  reform. Thus, any move towards promoting social development was well received, and the creation of UDAPSO gave rise to positive expectationsand was supported by the donor community, the press, and institutions such as the Gennan-funded Imtituto Lai~rnericamde Investigaciones Sociales (ILDIS), which had established itself as a non-partisan discussion forum since 1985. Similarly, key World Bank staff associated with Bolivia were interested in UDAPSO from the start and helped in every way possible by providing access to documents, financing research, and advocating the work UDAPSO was doing. There was a well-founded perception that information on Bolivia's social sector was sparse and that, despite the existence of the Living Stydard.Measurement Surveys (LSMS) since 1989,there was inadequate social policy analysis. Bolivian universities were not strong in policy oriented research and there was very little analytical work in the different social sector ministries. There were mostly sector reports which were general diagnostics with anecdotal narrative characteristics. A possible exception were the studies on population and reproductive htalth carried out by the Unidadde Polin'cas de Pobhci6n (UPP) of the Ministry of Planning. The National Statistics Institute (INE) also carried out some studies, but these did not have wide dissemination. Most studies using household survey data were carried out by external consultants,as is pointed out below. In this context, the strong commitmentto UDAPSO shown by the Minister of Planning, Samuel Doria Medina, was critical. He had led the formulation of the Social Strategy, which emphasized the need for a pragmatic social policy think tank to address social policy issues. The Minister's strongpersonal commitmentwas compounded by his trust and support of me as Director. Although Doria Medina and I had not worked together before, we shared a common academic background (postgraduate studies in the London School of Economics) and a belief that good ideas and political support were what was needed to get social policy going in Bolivia. Thus, I virtually was given a free hand in running UDAPSO and all the political support I needed to get things done, from trivial administrativepursuits to critical backing in front of other Ministries, and a strong endorsement in the eyes of the donor community. The Minister had a clear understanding that a technical analysis unit was what was required, and he therefore did not interfere in the appointment of technical staff which was my sole responsibility as Director. The Ministry of Planning's endorsementwas key for obtaining donor support, such as USAID's financing for operations. Initially, UDAPSO started as a unit of UDAPE (with a staff of six) and benefited from that unit's financial, infrastructureand human resource base. The close relationship to UDAPE also helped UDAPSO to develop a keen sense of the overall macroeconomic constraintswhen analyzing social policy alternatives. Once the assistance  contract with USAID was signed, UDAPSO was able to expand (to twelve analysts) and acquire adequate office infrastructure. This group of favorable external factors had a positive influence on the institutional development of UDAPSO, which took on innovative organizationalcharacteristics. Institutional and organizational innovation UDAPSO's work originally concentrated on eduation, health, poverty and income distribution, micro enterprisedevelopment issues, gender studies, and the tracking of social sector expenditures. ln the second year, gender and micro enterprisedevelopment studies were abandoned. In the first case, because another government unit took charge, and in the second because there was not sufficientgovernment interest in this area. Instead, rural development and employment analyses were introduced, in part as a response to greater government interest in these areas. In all areas, UDAPSO adopted three broad strategicorientations: convocation- centered, "seekingto bring people together to explore issues and exchange views;" info-on-centered, "generatinginformationprimarily for publications"; and consociational, that is a balance between convocation and information activities.8 Thus, UDAPSO promoted seminars and meetings with other researchers in these areas as well1 as with stake holders to discuss research proposals as well as reserch results. UDAPSO, therefore, had a wide span of influence on the way social issues were addressed in the government after it creation. I will highlight two of the most important ones. First, with UDAPSO's creation, analysis of social sector policy issues was concentrated within a single institution of the Ministry of Planning, which until then had been mainly concerned with economic development. This allowed UDAPSO to become a critically placed spokescenter for social policy. NGOs and the donor community could participate in policy dialogues with UDAPSO on social policy and refer to it when needed, instead of having to speak with each and everyone of the multitude of institutional actors in the social sector. Second, by establishing an analysis unit in the public sector with a cadre of senior and junior specialists, gradually the line ministries and institutions started to avail themselves of the services of UDAPSO in a variety of instances. The Junta Nacioncrlde Solidari&d y Accion Social (Junta), in charge of homeless children, the elderly and women, was the first institution to demand UDAPSO's help. It first requested help in developing project proposals *Lindquist,"Assessingthe influenceand roles," pp. 556-558.  and then-under World Bank auspices-in the design of an evaluation of the impact of a Child Health Care and Nutrition Program (PIDI). This example illustrates well the importance of having a sound technical unit in the public sector, not involved in daily operations, that could serve as an objective, apolitical, external evaluator using data collected by another public institution, the National Statistics Institute (INE). Other ministries were slower in accepting UDAPSO. The Ministry of Health, for example, required a few years of gradual collaboration in specifictasks-such as the joint preparation of Bolivia's report to the Pan American Health Organization, before they realized that UDAPSO had health economiststhat could play an important role in health reform. The initial contacts were developed by a senior analyst (sociologist)who had much experienceand personal contacts in the sector and it was she who introduced ajunior analyst (an economist) who is now a senior UDAPSO analyst in charge of health finance and cost effectivenessstudiesthat proved to be important inputs to the health reform effort.9 UDAPSO's relationship with the education sector was different. The government had set up an Education Reform Task Force (ETARE) six months before UDAPSO in the Ministry of Planning which had produced no visible results. At the request of the Minister of Planning, I assumed the mission of finding a new Director and helping thisDirector to re-start ETARE and to focus better the design of the Education Reform in light of the Social Strategy. Although UDAPSO formally assumed oversight of ETARE for a few months, it was more of a personal endevour to provide ETARE with the necessary technical, administrative, and moral support until it gained its own momentum and new personality. Some UDAPSO analysts did participate, however, in ETARE projects, particularly those involving the financing of the education reform proposal. Thus, it was ETARE who had the principal role in assisting the Ministry of Planning to move forward educationpolicy analyses, except for higher education as will be discussed below. Admittedly, UDAPSO's slow acceptanceby the sector ministries was caused by their fear of competition. Suddenly, a new public institution from the Ministry of Planning was working in social policy issues and developing policy proposals, and-what was worse- economists and other social scientist were speaking of health issues (without being doctors) and on education (without being teachers). Once UDAPSO proved itself in the field, and the social sector institutionssaw that they could benefit from working with it, collaborativerelations developed. qersonal communicationwith Guillermo Seoane, formerUnder Secretary for Health, Sep- tember 1995.  UDAPSO also had a significantimpact on a variety of private institutions, as well as on the international aid agencies. In UDAPSO, the government now counted on an institution which was technically competent and had the backing of the Minister of Planning that could coordinatep r o j q that involved many public sector agencies, and multidisciplinary studies. Thus, UDAPSO was involved in the design of an integrated system of social statistics (with INE, all the sectors, and agencies such as UNICEF), and in developing a multidisciplinary and multisectoral action plans. Information and statistics on the social sectors in Bolivia was out-of-date, it was sparse, and fragmented, with each government institution producing its own data. Moreover, much of the datathat existed was collected for bureaucratic purposes and had very little policy relevance. Thus, UDAPSO developed a series of tables which we found relevant for our work. We compiled these in a dossier and distributed them throughout the public sector. There was a very favorable reception to these reports, UDAPSO then decided to publish a small booklet on social statisticswhich reproduced many of the tables in the working papers and synthesized information from the LSMS. Unfortunately, these statistics have not been updated and recently a research NGO, CEDLA, and ILDIS have produced their own social statisticspublicati~n.'~This has been clearly an area where UDAPSO was unable to consolidate its initial leadership, despite the fact the setting up a database of social statistics in Bolivia was one of it original mandates. A good example of UDAPSO's role in policy coordination,was the preparation of the social sector papers for the Consultative Group in 1992. UDAPSO staff prepared the Minister of Planning's presentation and the Director delivered a paper which highlighted the social policy challenges facing Bolivia that was favorably received by the donor community.ll This illustrates the trust that UDAPSO enjoyed from the Minister of Planning, the role it played in setting policy in such an international forum, and the competence it had achieved. Similarly, NGOs and other social sector actors could engage in a policy dialogue with UDAPSO and know that they were dealing with a semi-autonomous, technical unit of one of the most powerful ministries in the government. To the extent that it was done at all, this was 1