Argentina - Second Provindial Reform-Tucuman

 ICRR 10746 Report Number : ICRR10746 ICR Review Operations Evaluation Department 1. Project Data: Date Posted : 08/08/2000 PROJ ID : P006006 Appraisal Actual Project Name : Second Provindial Project Costs 100 100 Reform-Tucuman US$M ) (US$M) Country : Argentina Loan/ Loan US$M ) 100 /Credit (US$M) 100 Sector (s): Public Sector Management Cofinancing Adjustment US$M ) (US$M) L/C Number : L4221; LP301 Board Approval 98 FY ) (FY) Partners involved : Closing Date 12/31/1999 12/31/1999 Prepared by : Reviewed by : Group Manager : Group : 2. Project Objectives and Components a. Objectives To help the Province of Tucuman, Argentina to reform and restructure its government to ensure an efficient and responsive delivery of public services (notably social services) within fiscally sound policies. b. Components The reform program supported by the project included three major components . 1. The reform of public finances including (a) improvement in tax collection and administration to promote higher reliance on own source revenues; (b) civil service reform through the structural reform of selected sectors, privatization of public services, outsourcing of peripheral services and controls to lower absenteeism and overpayments; and (c) rationalization of public expenditures and prioritization of government spending, while ensuring that there are no cuts in the budget for the social sectors . 2. Education reform to ensure extension of mandatory education and guaranteed access to the poor . 3. Health reforms to improve efficiency and equity in the health sector by separation of the provision and financing of public health services, increasing cost recovery, consolidating hospital facilities, reducing excessive staff and reallocating resources to non -personnel expenditures, improving targeting to the poor and increasing health insurance coverage. c. Comments on Project Cost, Financing and Dates The loan was disbursed in two tranches - $55 million on loan effectiveness for actions agreed prior to Board approval and US$45 million upon implementation of agreed reform program . Figures on local financing costs are not available. 3. Achievement of Relevant Objectives: The project achieved many of its objectives . The province achieved improvement in tax collection and administration. The provincial civil service was downsized . In education, the province introduced improvements in management of human resources through (a) rationalization of pay and benefits of public sector teachers on leave; (b) the improvement of the control system of sick leave and absenteeism; (c) the redesign of the administrative procedures and implementation of a computerized system; and (d) the implementation of a new payroll system . It also improved distribution of public funds to private schools, eliminated excess teacher training institutions and updated curriculum. In health, it established self-managed hospitals; improved health insurance management information systems and expanded insurance coverage for the poor . 4. Significant Outcomes/Impacts: The absenteeism among teachers was reduced . In health, service standards were improved . 5. Significant Shortcomings (including non-compliance with safeguard policies): Fiscal performance indicators did not show any significant improvement (see e.g. Table 14 in the ICR). No systemic improvement in the efficiency or equity of education services was observed . The formula adopted for private school financing was abandoned upon closing of the loan . 6. Ratings : ICR OED Review Reason for Disagreement /Comments  Outcome : Satisfactory Moderately Satisfactory Only modest progress was made on fiscal and education reform issues. Institutional Dev .: Modest Modest Sustainability : Unlikely Likely Please note that the ICR rates it "uncertain" but OED no longer uses "uncertain" rating. The discussion by the ICR appear to be equivalent to "unlikely" in OED ratings. Some backtracking on education reform has already taken place . Health reforms on the other hand appear to have broader support. Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory NOTE: NOTE ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness. 7. Lessons of Broad Applicability: Quick disbursing loans have the potential of introducing fundamental reform provided the lender focuses on output performance and shows credible commitment to the disbursement conditions . 8. Assessment Recommended? Yes No 9. Comments on Quality of ICR: The ICR is of good quality and provides a limited number of useful indicators on project performance . The ICR does not include an aide-memoire and borrower's comments. This was an intensive learning model ICR and stakeholder workshops were conducted with provincial authorities and technical experts .