Argentina - Fourth Social Protection Project

Report No. PID7121 Project Name Argentina-Fourth Social Protection (+) Project Region Latin America and Caribbean Region Sector Social Assistance, Other Social Sector Project ARPE6058 Borrower(s) The Argentine Republic Implementing Agency Secretaria de Dessarrollo Social (Social Development Secretariat) Environment Category B Date PID Prepared December 1, 1998 Projected Appraisal Date August 1998 Projected Board Date October 15, 1998 1. Country and Sector Background Demand-driven Approach and the Ability to Participate. The objectives of the Argentine Government's social policy in recent years have been to satisfy the basic needs of the population and to provide opportunities for participating in the process of economic development to overcome the various causes and manifestations of poverty. Successful implementation of such a policy would require the type of program administration that can respond to diverse needs and demands at the local level in a transparent and participatory manner, and would depend on the ability of the intended beneficiaries, particularly the poor, to take advantage of the opportunities presented. Social Sector Information. The Government has also employed the strategy to provide an overall policy and institutional framework by establishing standards, encouraging the application of sound criteria and using a combination of moral suasion, institutional support and dissemination of best practices to improve spending at the provincial level. Several Bank and IDB supported operations, in the area of health, education and economic management, are directly helping the provinces. A high priority has been placed on improving the availability and the quality of social indicators and information of program beneficiaries, to effectively target poor and vulnerable groups, to identify their unmet needs, and to design and implement effective systems to satisfy those needs. Social Protection I. Within the above-mentioned context, in 1995 the Government requested the Bank's support in establishing FOPAR, a pilot Social Investment Fund, which was expected to design and test mechanisms to build capacities of the poor in identifying and prioritizing needs, designing and implementing small projects accordingly, and mobilize resources to carry out such projects in a participatory manner. Another request was made to support the establishment of SIEMPRO, a mechanism that would contribute to the improved design and implementation of social programs by making information more widely available, by carrying out the analyses and evaluations of policies and programs, and by strengthening the capacity of provincial and national agencies in information management and analysis as well as policy and  program evaluation. In response, Bank-financing was provided to FOPAR and SIEMPRO under the Social Protection I (SP I), along with other targeted interventions. 2. Objectives The primary objectives of the Project would be to assist the Argentine Government in: (i) building capacities in poor communities to better manage the process to improve their welfare; (ii) providing poor communities with technical assistance and grants for beneficiary-identified small scale subprojects that would meet specific needs; and (iii) improving the focus and management of social programs by improving the availability and quality of social sector specific information, the capacity to effectively target social services to the poor, and the methodologies to monitor and evaluate social sector programs. The above-mentioned objectives would be pursued through the following two programs within the Social Development Secretariat (SecretarUa de Desarrollo Social; SDS). First, the Participatory Social Investment Fund (Fondo Participativo de Inversi6n Social; FOPAR), established under the SP I as a two-year pilot program, would expand its operations. The main objective of the Fund is to build institutional capacity among the poor, and simultaneously to provide them with means to meet specific necessities. It is important to recognize that FOPAR has defined its subprojects not only as the means to satisfy specific needs of the poor, but also as the training vehicle to build and strengthen the ability to identify, define and prioritize their needs, and then mobilize and manage resources to design, implement and operate their own projects. Second, the Technical Assistance for the Improvement of Social Information and Monitoring and Evaluation of Targeted Social Programs (Sistema de Informaci6n, Evaluaci6n y Monitoreo de Programas Sociales; SIEMPRO) would enter into the second phase to establish itself as a catalyst in changing the focus and management of social programs by improving the accessibility and quality of information, promoting transparency, participation of the civil society and appropriate targeting of social services to the poor. 3. Rationale for Bank's Involvement The Bank's support has facilitated the provisions of knowledge and expertise to FOPAR/SIEMPRO (see also 8. Lessons learned). 4. Description FOPAR-2: would have the following three subcomponents (a) Community Subprojects: Through the provision of technical and financial assistance, FOPAR would support the identification, design and implementation of small-scale subprojects in the poor communities in approximately 170 poorest districts in ten northern provinces and in a southern region. The average size of subprojects is estimated to be around US$ 47,000 equivalent, and approximately 2,000 subprojects would be supported during a four-year period. Eligible types of subprojects are defined in the FOPAR Operational Manual, including construction of multi-purpose community centers, latrines and other rudimentary sanitation facilities, rudimentary water systems (hand- pumps and vats), pedestrian bridges and other minor civil works, training programs for leadership building and vocational skills, preservation of cultural heritage, environmental management, and community-network building. - 2 -  (b) Knowledge and Methodology Transfer and Capacity Building. Under this subcomponent, FOPAR would promote participatory approaches through educational campaign, seminars and workshops and the provision of technical assistance to interested government agencies and programs at both central and local levels. Technical assistance would be given based on a concrete technical assistance agreement between FOPAR and the beneficiary agency, and would cover topics such as targeting, operational modalities and MIS. In addition, FOPAR would actively support the development of poor communities' capacity to manage beneficiary-identified small scale subprojects though promotion, evaluation and supervision of community subprojects. (c) Project Management. Under this component, FOPAR would establish and operationalize four new provincial units (UPFs) and provincial participatory councils in the north, and several regional units and a regional council in the southern region. This subcomponent would also support day-to-day operation of FOPAR, internal staff training and capacity building, project administration, audits and monitoring and evaluation. SIEMPRO-2: SIEMPRO would continue to promote transparency, participation of the civil society and appropriate targeting of social services to the poor through the following subcomponents: (a) Social Information Base - the improvement of the social information-base for timely monitoring and analysis of the situation of the poor and vulnerable groups; (b) Evaluation and Monitoring - the development of appropriate methodologies and systems for targeting, monitoring and evaluation (ex-ante/ex-post) of social programs, and evaluation studies on a demand-driven basis; (c) Capacity Building of Provinces - the dissemination and transfer of developed methodologies and social information systems to appropriate national and provincial agencies, and (d) Social Policy Analysis - the provision of assistance to the SDS to establish priorities and assure coordination of social programs directed to the poor. 5. Financing Total ( US$m) Government 42.1 IBRD 90.8 IDA 0 Total Project Cost 132.9 6. Implementation Implementation period: FOPAR - 48 months (January 1999 - December 2002) / SIEMPRO - 39 months (January 1999 - March 2002) Institutional and implementation arrangements for both FOPAR and SIEMPRO would remain essentially unchanged. Both programs would continue to be hosted within the Social Development Secretariat (SDS), which in turn, provides administrative support to the programs. 7. Sustainability The Argentine Government has frequently expressed its intentions to fund FOPAR and SIEMPRO without external financing in the future. Given that these programs' overall fiscal impact is very small, and that they are both proving their worth, their sustainability-potentials are high. Considering the - 3 -  presidential election scheduled towards the end of this year, however, the concrete plans for sustaining FOPAR and SIEMPRO would have to be discussed with the new administration. The best opportunity to for such discussions would be the mid-term review. As for FOPAR subprojects, there are many encouraging signs. Based on social, technical and economic considerations, a recent ex-post evaluation concluded that 80t of the infrastructure-type subprojects within the sample had medium-to-high chance of sustainability. However, considering the relatively short experience of FOPAR and the small sample size, the sustainability of subprojects would require continuous monitoring through periodic ex-post evaluations. 8. Lessons learned from past operations in the country/sector FOPAR: Cautious and conservative approach during the initial phase pays off. During its early days, FOPAR concentrated on internal institution building, and at the same time, maintained a very cautious attitude in subproject appraisal and approval. In fact, the number of subprojects approved during the first year was only 55. By the end of the second year, however, FOPAR had accelerated the pace of implementation by 15 times, and approved 751 new subprojects, making the cumulative total to 806, of which 179 had completed and 584 were in execution. FOPAR, through its rigid appraisal process, also established the reputation that it adheres to its operational principles, in particular, community participation and transparency (for example, more than 50; of the reasons for disapproval were inadequate participatory measures). This reputation has been effective in buffering the potential of political interference, and helped ensure that resources are allocated to the areas of greater need or beneficiary-determined priorities. Investing in the Management Information System pays off. One of the pay-offs of concentrating on internal institution building during the initial year -- even at the expense of the speed of subproject processing -- materialized as a highly effective management information system (MIS), which is often considered in Latin America and the Caribbean as one of the best MIS implementation in a SIF. The system was one of the key factors to enable the above-mentioned rapid efficiency gain as well as the effective targeting. The technological foundations of the system are rather modest. Also, the system does not provide any eye-catching but non-essential features like colorful WEB pages. It is unique, however, in its design and implementation process. FOPAR hired a private consulting firm to carry out thorough business-process engineering. This firm observed and worked closely with FOPAR staff of all levels, and designed detailed data structure and information flow models. Subsequent system development was carried out with close consultations with the users (i.e. FOPAR managers and staff); and the system developers (i.e. the MIS Staff) and the users literally worked side-by-side. In other words, from the very beginning, FOPAR's MIS developed with the organization's management and control mechanisms. This process obviously helped identify and overcome inefficiencies and weakness of FOPAR's operational procedures and organizational structure. In addition, FOPAR's national coordinator has been exceptionally supportive and committed to the development of an effective MIS and its use by the staff. This is almost a textbook example of good (but often neglected) MIS development and operation regardless of the type of business or organization (SIF or otherwise). Formulation of core-beneficiary group increases the chance of participation. - 4 -  FOPAR is similar to the SIF in Peru (FONCODES) and several African countries (Zambia and Malawi) in the sense that beneficiaries are formed into groups (in Argentina, they are called NUBs - Nucleo de Beneficiarios), which serve as the focal point for subproject preparation and implementation. This has allowed for participation by communities and beneficiaries which are often excluded from development initiatives. For example, 59t of NUB members are women; among urban areas, 36t are under 24 years old and 11 are adolescents. About 60- of NUB members have no prior experience in participating in systematic organizational activities that concern the welfare of their own communities. Necessity to redefine the benefits of social investment funds. Through field visits during Bank supervision missions and the ex-post evaluation, it has become clear that FOPAR has generated significant "spill-over" benefits, including the building of empowerment skills (learning to organize and speak out, belief that the poor can improve their conditions, confidence in dealing with government officials, banks and other institutions), institutional skills (identification of needs, planning and budgeting, handling of contracts, financial administration) and the transfer of skills and experience to other community groups (for example, Bank supervision mission members had several opportunities to sit in self-initiated meetings among NUBs to learn from each other). In the words of the mayor of a small city in the north, the effect FOPAR is having makes it easier for the municipal government to serve poorer areas. Such benefits are compelling when witnessed on the ground but difficult to capture in statistics, and may have a significant and lasting effect on a community or group's ability to address poverty conditions beyond the actual benefits from the infrastructure or services contained in a subproject. For example, most members of the communities served by FOPAR have had hardly any contact with formal financial institutions. There were a number of cases that local bank tellers refused to attend to the community representatives, denied the request to open an account, or rejected (even destroyed, in some cases) FOPAR-issued checks presented by the community representatives. As a result, FOPAR -- to help the community member establish credibility in the eyes of the local bank tellers -- modified its procedure and now sends a UPF staff to accompany the community representatives when they go to a local bank for the first time to open an account and deposit the first disbursement check. Having beneficiaries administer resources can lead to lower unit costs, curb on potential corruption in subproject implementation, and foster flexibility and creativity. Record keeping, procurement and financial management by the beneficiaries have been exceptionally good. Two critical factors have been: (a) training of supervisors to provide on-going technical assistance to beneficiary groups on administering subproject execution; and (b) incentives for monitoring by the community -- FOPAR staff explain administrative requirements to the entire community group (not just the representatives) and NUBs are required to keep open records which any member of the community can see. Shopping for materials and withdrawal of funds are always done by more than one NUB representative. In most cases, the NUB has chosen to self-manage infrastructure, in part to get more value for money by avoiding contractors fees. As such, unit costs are coming in significantly lower than similar projects. Community-execution of subprojects also allows greater flexibility and creativity. For example, many communities have voluntarily developed and adopted a scheme to provide paid-work to poorer members. In a rural indigenous community where jobs are scarce, the community decided to pay twice - 5 -  the number of laborers at half the budgeted cost as a way of distributing income more evenly among the community and giving youth construction work experience. Experience of Project Competition. Drawing on the experience of FOSIS in Chile, FOPAR, unlike other SIFs in Latin America and the Caribbean, uses project competitions (concursos de proyectos). In accordance with the targeting criteria of FOPAR, CPP (Provincial Participatory Council) selects eligible disadvantaged neighborhoods and poor districts. A period of approximately three months is designated for communities to identify their needs, form beneficiary groups (i.e. NUBs) and seek technical support in the presentation of subprojects. FOPAR promoters actively assist in this process, from organizing community meetings, orienting groups in subproject formulation and identifying technical resources available to NUBs (since geographical areas are pre-selected, promotion efforts can be highly targeted). The experience with the project competition reveals both advantages and disadvantages over the first-come, first-serve alternative, which is more commonly used in other SIFs in Latin America and the Caribbean. On the positive side, (a) it orders the pipeline and sends clear signals to beneficiary groups regarding the rules of the game (how much money is available, time frame which an approval can be expected, etc.) and thereby avoids the tremendous buildup up of subprojects waiting to be evaluated like many other SIFs experience; (b) it facilitates the contracting of technical experts to review an entire package of similar subproject proposals, and hence promotes the selection of the 'best' subprojects rather than just the first to be received; (c) it allows for the opening and closing of windows for certain subproject types and priority beneficiaries; and (d) since eligible neighborhoods and rural areas are specified in the competitions, targeting can be refined and redirected annually. On the negative side, it tends to make the pipeline lumpy. For instance, large packages of subprojects tend to cause operational bottlenecks, such as when they enter contracting and approval stages. Administrative systems and personnel must be structured to handle the peaks, which may reduce overall administrative efficiency versus a smoother pipeline flow. In addition, presentation deadlines may work against proposals from weaker groups. FOPAR would continue to use the competitive mechanism, but would schedule the competition cycle in such a way to minimize peaks and down-time, and improve the technical assistance to weaker communities. The above-mentioned lessons coincide with international experience with SIFs, discussed at the forums of SIFs like the International Workshop on Social Fund at the World Bank Headquarters in May 1997 participated in by over 70 funds managers from all over the world, and documented in the following and many other literature: Narayan, Deepa and Katrinka Ebbe, 1997. Design of Social Funds: Participation, Demand Orientation and Local Organizational Capacity (World Bank Discussion Paper No. 375) "Portfolio Improvement Program: Review of the Social Funds Portfolio", Quality Assurance Group (QAG), the World Bank, March 1997. Carvalho, Sonya, 1994. Social Funds: Guidelines for Design and Implementation (Human Resources Development and Operations Policy Working Paper) Gopal, Gita and Alexandre Marc, 1994. World Bank-Financed Projects with Community Participation: Procurement and Disbursement Issues (World Bank Discussion Paper No. 265) "Ten Years of Social Fund Activities in Bolivia" (OED Precis, May 1997) - 6 -  "A Success and Challenge: AGETIP in Senegal" (OED Precis, May 1997) Barientos, Jorge, 1998. "A practical approach for designing community-based operations - with special reference to social funds". SIEMPRO Through the course of SIEMPRO, it has become evident that one of the most valuable contribution of the program is its technical assistance to the provinces. SIEMPRO would continue strengthening this line. On the other hand, in some instances, SIEMPRO experienced difficulties in obtaining necessary cooperation and access to information in carrying out the evaluation of programs outside the SDS. Consequently, during the first year, SIEMPRO would concentrate on the evaluation of the program inside the SDS. The evaluation of the programs outside the SDS would be demand-driven. Furthermore, to ensure that SIEMPRO's products would serve the needs of stakeholders as well as to improve the coordination with partnership agencies like INDEC, SIEMPRO would form an Advisory Council consisting of the representatives from social sector agencies, partnership agencies, the academic and NGO communities. In addition, SIEMPRO would take advantage of the Bank's expertise in poverty analysis and social surveys. The Bank would be also instrumental in transferring lessons and experience from other clients as well as the OECD countries. 9. Program of Targeted Intervention (PTI) See descriptions of FOPAR's experience under Section 8. in the above. 10. Environment Aspects (including any public consultation) Issues : The SP IV has been assigned a B category. FOPAR subprojects are expected to remain small (the expected average size is $47,000; the average during the pilot phase was US$38,000), and most of the environmental impacts should be predictable and subsequently avoided or mitigated with common practice. Sections of FOPAR Operational Manual and Project Presentation Guides concerning the environment have been reviewed by Bank staff and found acceptable. 11. Contact Point: The InfoShop The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Hideki Mori, Task Team Leader The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: (202) 458-1571 Fax: (202) 614-0365 Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. -7 -  Processed by the InfoShop week ending December 4, 1998. - 8 -  Annex Because this is a Category B project, it may be required that the borrower prepare a separate EA report. If a separate EA report is required, once it is prepared and submitted to the Bank, in accordance with OP 4.01, Environmental Assessment, it will be filed as an annex to the Public Information Document (PID) . If no separate EA report is required, the PID will not contain an EA annex; the findings and recommendations of the EA will be reflected in the body of the PID. 9