Document of The World Bank Report No: ICR00002303 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-45940) ON A DEVELOPMENT POLICY CREDIT IN THE AMOUNT OF SDR 133.8 MILLION (US$200 MILLION EQUIVALENT) TO THE ISLAMIC REPUBLIC OF PAKISTAN FOR A SOCIAL SAFETY NET DEVELOPMENT POLICY CREDIT June 29, 2012 Human Development Unit South Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective April 12, 2012) Currency Unit = Pakistan Rupee PKR 1.00 = US$ 0.01 US$ 1.00 = 90.73 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank ACRP Additional Credit and Restructuring Project BISP Benazir Income Support program CAS Country Assistance Strategy CCT Conditional Cash Transfer DFID Department for International Development (UK) DPC Development Policy Credit EU European Union GDP Gross Domestic Product IDA International Development Association IMF International Monetary Fund MIS Management Information System NSPS National Social Protection Strategy PBM Pakistan Bait-u-Mal PRESO Pakistan Poverty Reduction and Economic Support Operation PRSC Poverty Reduction Strategy Paper SBA Stand-By-Arrangement SSN TA Social Safety Net Technical Assistance Project Vice President: Isabel Guerrero Country Director: Rachid Benmessaoud Sector Manager: Pablo Gottret Task Team Leader: Cem Mete and Iftikhar Malik ICR Team Leader: Cem Mete and Iftikhar Malik ICR Author: Hjalte Sederlof PAKISTAN Social Safety Development Policy Credit CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Program Performance in ISRs H. Restructuring 1. Program Context, Development Objectives and Design ................................................ 1  2. Key Factors Affecting Implementation and Outcomes .................................................. 6  3. Assessment of Outcomes .............................................................................................. 11  4. Assessment of Risk to Development Outcome ............................................................. 15  5. Assessment of Bank and Borrower Performance ......................................................... 15  6. Lessons Learned............................................................................................................ 17  7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners............... 19  Annex 1: Bank Lending and Implementation Support/Supervision Processes ................ 20  Annex 2. Beneficiary Survey Results ............................................................................... 21  Annex 3. Stakeholder Workshop Report and Results ....................................................... 22  Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 23  Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders ........................... 29  Annex 6. List of Supporting Documents .......................................................................... 30  Annex 7: Policy Matrix .................................................................................................... 31  MAP .................................................................................................................................. 36    A. Basic Information Pakistan: Social Safety Country: Pakistan Program Name: Nets Development Policy Credit Program ID: P115638 L/C/TF Number(s): IDA-45940 ICR Date: 06/29/2012 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: DPL Borrower: PAKISTAN Original Total XDR 133.80M Disbursed Amount: XDR 100.30M Commitment: Revised Amount: XDR 100.30M Implementing Agencies: Benazir Income Support Program Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 03/12/2009 Effectiveness: 09/18/2009 09/18/2009 Appraisal: 04/28/2009 Restructuring(s): Approval: 09/10/2009 Mid-term Review: Closing: 03/31/2010 12/31/2011 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Highly Satisfactory Risk to Development Outcome: High Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Highly Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA): (Yes/No): Problem Program at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Other social services 100 100 Theme Code (as % of total Bank financing) Poverty strategy, analysis and monitoring 13 13 Social safety nets 87 87 E. Bank Staff Positions At ICR At Approval Vice President: Isabel M. Guerrero Isabel M. Guerrero Country Director: Rachid Benmessaoud Yusupha B. Crookes Sector Manager: Pablo Gottret Mansoora Rashid Program Team Leader: Cem Mete and Iftikhar Malik Cem Mete and Iftikhar Malik ICR Team Leader: Cem Mete and Iftikhar Malik ICR Primary Author: Hjalte S. A. Sederlof F. Results Framework Analysis Program Development Objectives (from Project Appraisal Document) The program development objective is the establishment of an appropriate policy framework for an efficient national safety net system. The proposed DPC support falls under pillar III of the CAS: supporting the poor and vulnerable. The CAS recognizes that the existing social assistance programs cover a very small fraction of the poor, provide negligible benefits, and suffer from ineffective targeting, weak administration, and a lack of monitoring and evaluation. To this end, the CAS notes that the Bank's support will include support for safety nets that will (i) help the chronic poor cope with poverty, and where possible; (ii) help the poor escape poverty, e.g., via conditional cash transfers; and (iii) help families and households cope with seasonal shocks. The proposed DPC is fully consistent with the PRSP 2, which identifies assisting the poor and the vulnerable as a key objective of Government's poverty reduction strategy. The proposed DPC is also consistent with the National Social Protection Strategy that supports the development of an effective and financially sustainable safety net system to promote the re-distributive goals of society Revised Program Development Objectives (if any, as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Increase in the share of beneficiaries enrolled in the BISP program using the Indicator 1 : new targeting mechanism from 0 to at least 30 percent of total beneficiaries Value (quantitative or 0 30% 34% Qualitative) Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments The stated target was met as planned and the previous system was completed (incl. % phased out by the summer of 2011. achievement) Increase in the share of total benefit expenditures reaching the poorest 40 Indicator 2 : percent of the population from 46 percent to at least 55 percent Value (quantitative or 46% 55% 75% Qualitative) Date achieved 05/05/2009 12/31/2010 12/31/2010 This target was met, which is a direct consequence of the targeting efficiency Comments of the new instrument. As a result of the nationwide application of the new (incl. % targeting mechanism, the share of benefits reaching the poorest 40% increased achievement) to 75%. Increase in program applicants receiving a response on whether they qualify Indicator 3 : for the program within 3 months from scorecard form submission, from 0 to at least 50 percent of total applicants Value (quantitative or 0 50% 80% Qualitative) Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % This target was met. achievement) Increase in benefit payments audited from 0 percent to at least 50 percent o f Indicator 4 : total payments under the new payment system and improvement in reconciliation time lag from the present indefinite period to two months Value (quantitative or 0 50%/2 months 50%/2 months Qualitative) Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % The target was met. achievement) Increase in percentage of participating (poverty-scorecard) districts in which Indicator 5 : beneficiary lists are publicly available, from 0 to at least 30 percent Value (quantitative or 0 30% 100% (on demand) Qualitative) Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments This outcome was met, with beneficiary lists being publicly available in all (incl. % BISP field offices, on demand. achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years National targeting system established - Legal and regulatory environment for a Indicator 1 : new national targeting system put in place Legal and Legal and regulatory regulatory Value environment for a environment for a (quantitative or N/A new national new national Qualitative) targeting system targeting system put put in place in place Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) National targeting system established - Mechanisms for data collection and Indicator 2 : processing agreed Value Mechanisms for Mechanisms for (quantitative or N/A data collection and data collection and Qualitative) processing agreed processing agreed Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) Institutional arrangements for safety net administration developed - BISP Indicator 3 : established as an autonomous safety net authority and administrative policy guidelines adopted Value N/A BISP established BISP established as (quantitative or as an autonomous an autonomous Qualitative) safety net safety net authority authority and and administrative administrative policy guidelines policy guidelines adopted adopted Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) Indicator 4 : CCT program - Plan for the piloting and expansion of the CCT Plan for the Value Plan for the piloting piloting and (quantitative or N/A and expansion of expansion of the Qualitative) the CCT created CCT Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) Adequate and sustainable safety net expenditures - BISP budget allocation for Indicator 5 : FY08/09 consistent with medium macro-economic framework and adequate to pay the agreed benefit amount to at least 3.4 million families BISP budget allocation for BISP budget FY08/09 allocation for consistent with FY08/09 consistent medium macro- with medium Value economic macro-economic (quantitative or N/A framework and framework and Qualitative) adequate to pay adequate to pay the the agreed benefit agreed benefit amount to at least amount to at least 3.4 million 3.4 million families families Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) Improved control and accountability of BISP payments - Independent payment Indicator 6 : agency (the Post) appointed Independent Value Independent payment agency (quantitative or N/A payment agency (the Post) Qualitative) (the Post) appointed appointed Date achieved 05/05/2009 12/31/2010 12/31/2010 Comments (incl. % achievement) G. Ratings of Program Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 03/26/2010 Satisfactory Satisfactory 158.91 2 11/01/2010 Satisfactory Satisfactory 158.91 3 06/26/2011 Satisfactory Satisfactory 158.91 H. Restructuring (if any) Not Applicable 1. Program Context, Development Objectives and Design 1.1 Context at Appraisal 1. Over the decade preceding the Social Safety Net Development Policy Credit (SSN DPC), Pakistan had experienced relatively high levels of growth and a gradual decline in poverty. However, chronic poverty still remained high at some 22 percent in 2004/2005 (the most recently available data at the time of project preparation). Vulnerability to income shocks was also high: economic ones such as the global food, fuel and financial crises; natural disasters, such as earthquakes, droughts and floods; and idiosyncratic shocks such as illness, injury and unemployment. Existing publicly financed social protection programs were limited in their ability to provide adequate protection to the chronically poor and in their ability to respond to shocks. The public safety net essentially consisted of two weakly targeted cash transfer programs providing low benefits and irregular benefit provision – Zakat, a cash transfer that was managed by the Ministry of Religious Affairs and implemented by local committees with financing from individual contributions; and Bait-U-Mal, a public food support program administered by The Ministry of Social Welfare. Spending on the two programs was a low 0.14 percent of GDP (2004/2005).  2. Recognizing the need to strengthen the country’s social protection system, the Government, with support from the Bank and other donors, had started a collaborative process in 2006 to develop a national social protection strategy that was approved by the Cabinet in 2007. A central feature of the strategy was the development of a poverty targeted cash benefit. This resulted in the establishment by the Government of the Benazir Income Support Program (BISP) in 2008 as its flagship cash benefit program which was to evolve into a national safety net platform that would either integrate or harmonize with other programs. The BISP would apply a poverty scorecard (a proxy means test) for selecting beneficiaries; it would also serve as a multi-purpose national targeting system. A pilot phase was launched in early 2009 to draw lessons for subsequent scaling up to the national level. At the same time, the Government increased its safety net spending from 0.14 percent of GDP in 2004/2005 to 0.6 percent in 2008 and 1 percent in 2010. Safety net spending was to be maintained for the medium term and possibly longer.  3. The Bank had supported the strengthening of safety nets in Pakistan for several years, gradually widening the engagement to include: (i) analysis of the efficiency of social protection expenditures; (ii) technical assistance to formulate the national social protection strategy; (iii) analytic work on the targeting performance of existing social assistance programs and the development of the poverty scorecard; (iv) policy dialogue with provincial governments on social protection policy and programs; (v) support for social care services for the disabled; and (vi) technical assistance to support the design and implementation of a pilot CCT.  4. The introduction of the BISP launched an ambitious agenda of institutional reform, and the Bank chose to support it through a programmatic mix of interventions. In order to provide effective assistance to BISP in the short term, technical assistance was initially provided through DFID financing (a Trust Fund managed by the Bank) that served to test the poverty scorecard and set up the initial organizational and operational 1 systems for the program, as well as to pilot the CCT. Subsequently, the Bank approved a Social Safety Net Technical Assistance project in June, 2009 (SSN TA) to be implemented over a four-year period 2010 – 2014. That project was designed to support the establishment of the national targeting system, strengthen BISP operations, management, accountability, and monitoring and evaluation systems, as well as to advance analytical and data work for implementing and monitoring the national social protection strategy. The SSN DPC was approved in September 2009 as a further means of supporting the reform and providing budgetary assistance to the Government.  5. All these initiatives fell fully within the framework of the CAS. The CAS recognized the weaknesses of existing social assistance programs and noted that the Bank financing would include support for safety nets that could (i) help the chronic poor cope with poverty, and where possible, help the poor escape poverty, e.g., via conditional cash transfers; and (ii) help families and households cope with seasonal shocks. The initiatives were also fully consistent with the Pakistan’s PRSP and its national social protection strategy.  6. At SSN DPC appraisal (April 2009), the country had an adequate macro- economic framework. Pakistan’s economic performance had been strong for part of the decade, but in 2007/2008, a sharp rise in international food and oil prices, in combination with internal political uncertainties, had led to rapidly expanding macroeconomic imbalances, and spending overruns had led to a sharp increase in the fiscal deficit, as the Government tried to protect households and businesses from rising food and oil prices through subsidies. Simultaneously, increased import bills and strong domestic demand contributed to a widening current account deficit. Recognizing the need to correct the imbalances, the Government introduced a stabilization program which included a medium-term macroeconomic framework that envisaged fiscal and monetary tightening. The program was supported by an IMF Stand-By Arrangement (SBA) that was put in place in November 2008. At the time of appraisal, the program, slightly revised to take into account effects of a deteriorating global economy, was on track. In its assessment at the time, the Bank team recognized the macroeconomic downside risks, but at the same time noted that the IMF SBA was likely to mitigate such risk by committing the authorities to specific fiscal and current account deficit targets. Moreover, policy-based Bank lending was seen as a critical element of the Government’s financial planning as reflected in the SBA. To this end, an initial policy loan – the Pakistan Poverty Reduction and Economic Support Operation (PRESO) - was approved in March 2009, and followed by the SSN DPC. At the time, other donors had also committed significant resources, with the international community pledging more than US$5 billion to Pakistan at a donors’ conference in April, 2009. The resources were to be utilized over the subsequent two years, primarily to expand social protection and enhance human development spending.  1.2 Original Program Development Objectives (PDO) and Key Indicators 7. The objective of the DPC was to support the establishment of an appropriate policy framework for an efficient safety net system, including the development of sound institutions for the effective implementation of the Benazir Income Support Program (BISP). It was conceived as a single DPC with two tranches.  8. A set of quantitative outcome indicators for the DPC were specified for the year 2010, as follows:   2 1) Increase in the share of beneficiaries enrolled in the BISP program using the new targeting mechanism from 0 to at least 30 percent of total beneficiaries. 2) Increase in the share of total benefit expenditures reaching the poorest 40 percent of the population from 46 percent to at least 55 percent. 3) Increase in program applicants receiving a response on whether they qualify for the program within 3 months from scorecard form submission, from 0 to at least 50 percent of total applicants. 4) Increase in benefit payments audited from 0 percent to at least 50 percent o f total payments under the new payment system and improvement in reconciliation time lag from the present indefinite period to two months. 5) Increase in percentage of participating (poverty-scorecard) districts in which beneficiary lists are publicly available, from 0 to at least 30 percent. 9. In addition, a set of medium term process-related objectives and milestones were defined, reflecting the broader goal of building a national safety net. They provided the link between the DPC prior actions and the subsequent institution building that was necessary in order to implement safety net reform. Those objectives and milestones were pursued under a companion TA project (see “Other Significant Changes� and “Program Performance� below).  1.3 Revised PDO and Key Indicators, and Reasons/Justification Neither the PDO nor key indicators were revised during implementation. 1.4 Original Policy Areas Supported by the Program 10. The reform of the safety net included three complementary policy areas: (i) the development of a targeting system that would be transparent and serve to identify the eligible poor (the poverty scorecard); (ii) the establishment of a legal, policy and institutional framework to ensure sound management, governance, monitoring and administration of the program, including exit policies to help the poor and vulnerable graduate from the safety net program; and (iii) the expansion of coverage and provision of adequate benefit amounts, within a framework that would ensure fiscal sustainability; and benefit payments to the poor delivered on time and with adequate governance and control mechanisms in place.  11. The policy reforms had been initiated under PRESO which supported the adoption of the poverty scorecard as the targeting instrument for BISP, and included the preparation of a plan for its roll-out. The DPC supported all three policy reform areas, grouped into three “pillars�. Each pillar contained prior actions, medium term objectives for reform and medium term milestones. Table 1 summarizes the pillars and relates them to the reform areas and the medium term objectives. (See Annex 7 for a detailed Policy Matrix).  3 Table 1. Summary of the Safety Net Reform Program Pillar Reform Area Medium term Objective Pillar I: Improve the targeting 1. National targeting system Increase the share of the poor efficiency of safety net programs established. receiving safety net benefits by:  Developing and initiating the data collection system.  Developing the eligibility determination system.  Developing and implementing the monitoring mechanism for targeting. Pillar II: Establish an effective 2.1. Institutional arrangements Improve the administrative institutional framework for for safety net administration efficiency of safety net programs program implementation developed. by:  Developing a legal framework for safety nets.  Adopting institutional arrangements for program implementation.  Initiating the rationalization of safety net programs. 2.2. Exit and graduation Improve SSN program strategies developed. beneficiaries’ access to income generating opportunities by:  Providing incentives to invest in human capital accumulation. Pillar III: Enhance fiscal 3.1. Safety net expenditures Ensure safety net spending sustainability and strengthen the adequate and sustainable. consistent with the fiduciary environment macroeconomic framework by:  Allocating sufficient funds for safety nets program implementation. 3.2. Control and accountability of Improve timely delivery and BISP payments improved. tracking of BISP payments to the poor by:  Agreeing and implementing benefit delivery mechanisms.  Developing and implementing control and accountability systems for benefit payments.  Developing and adopting a strategy for monitoring program performance. 12. The DPC included seven prior actions under 3 pillars for the release of the first tranche (US$ 150 million) and two triggers for the release of the second tranche (US$50 million), as follows:  First Tranche Prior Actions Pillar I: Improve the targeting efficiency of safety nets programs 4 1) A national targeting system established to implement the poverty scorecard method, through contracting of separate agencies for scorecard data collection and eligibility determination. 2) Policy decision on improving BISP targeting mechanism and transition of BISP enrollees under the parliamentarian-based system taken by the BISP Board, removing existing beneficiaries from the program if they do not complete the scorecard targeting form or qualify under the new targeting system. Pillar II: Establishing an institutional framework for safety nets program implementation 3) BISP established as an autonomous statutory safety net authority to implement safety net programs through adoption of a legal ordinance with (i) clear financial and administrative autonomy; and (ii) distinction in roles of the Board, the Chairperson and the Secretary for the oversight and management of program implementation. 4) Administrative policy guidelines for effective BISP program implementation adopted by BISP, as approved by its Board. 5) Policy decision to remove overlapping mandates of BISP and PBM in delivering unconditional cash transfer programs taken by the Prime Minister. 6) Child Support Program (a conditional cash transfer [CCT] pilot) expanded, using a poverty score-card based targeting method. Pillar III: Enhance fiscal sustainability and strengthening the fiduciary environment 7) Independent payment agency appointed, and policy guidelines and procedures for ensuring timely delivery of payments agreed. Second Tranche Triggers Pillar I: Improving the targeting efficiency of safety nets programs 1) Poverty scorecard data collection completed in selected pilot districts. 2) The BISP has (i) implemented the policy decision to remove beneficiaries of the parliamentarian based system who do not complete the scorecard form or qualify under the poverty-scorecard based system; (ii) adopted a transition policy including but not limited to grievance mechanisms, definition of cut-off score for eligibility, plan for national roll out and communications strategy. 1.5 Revised Policy Areas (if applicable) Policy areas were not revised during implementation. 1.6 Other significant changes 13. While the policy triggers for both first and second tranche release were met, the second tranche of the credit was cancelled, as macroeconomic developments were not considered satisfactory for tranche release. Fiscal performance had been weaker than expected, as large fiscal expansion derailed the IMF Stand-By Arrangement, and devastating floods in mid-2010 further aggravated the situation. Instead, the funds tied to 5 the tranche (US$ 50 million) were included in a scale-up and restructuring of the DPC companion SSN TA project, resulting in a US$ 150 million Additional Financing (P125793), which was approved by the World Bank Board in February 2012. The project, renamed as SSN and converted into a SIL, covers the period 2012 – 2016 and continues the development of the national targeting system and supports a further strengthening of (i) program operations, (ii) management and governance, including building up program evaluation capacity, (iii) expansion of coverage of the cash benefit program (the BISP platform), and (iv) scaling up of the pilot CCT. In parallel, the Government allocated US$2 billion to BISP for the 2011-2014 period.  2. Key Factors Affecting Implementation and Outcomes 2.1 Program Performance Tranche # Amount Expected Actual Release Release Release Date Date Tranche 1 US$ 150 million 9.30.2009 9.30.2009 As planned Tranche 2 US$ 50 million n.a. n.a. Cancelled Tranche 1 Conditions from Legal Agreement/ Program Document Status See conditions 1 to 7 for tranche 1 in Section 1.4 All were met Tranche 2 Conditions from Legal Agreement/ Program Document Status See conditions 1 and 2 for tranche 2 in Section 1.4 and text below All were met 14. Progress of the project is reflected in movement towards meeting the medium- term milestones and objectives, building on the prior actions in the SSN DPC and supported under the SSN TA project, and now, the SSN project. The SSN AF that continued and expanded on the SSN TA project reflects satisfactory progress on program implementation. The attached matrix sets out the current status of progress towards the milestones (as of January, 2012).   Table 2. Current status of the reform program Medium term Objective Medium-Term Milestone Current Status Pillar I: Improving the targeting efficiency of safety net programs Reform area: National targeting system established Increase the share of the poor  Independent agency/ies for  Completed  receiving safety net benefits by: nationwide roll-out appointed, based  Developing and initiating the on performance evaluation criteria data collection system.  Developing the eligibility  Nationwide scorecard roll-out (in at  Completed determination system least 70 percent of districts in the  Developing and implementing country) completed and data the monitoring mechanism for processed for eligibility targeting. determination  Process evaluation and spot checks  Done during pilot phase and now a for the quality assurance of score routine element of program card roll-out established and results 6 made available on a regular basis monitoring and evaluation  Pillar II: Establish an effective institutional framework for program implementation Reform area 2.1: Institutional arrangements for safety net administration developed Improve the administrative  BISP offices at federal, provincial  Underway efficiency of safety net programs and divisional levels are adequately by: staffed in accordance with the  Developing a legal framework Organizational Structure outlined in for safety nets. the BISP operational policy  Adopting institutional guidelines arrangements for program  Public information campaign rolled  Completed implementation. out to support expansion of targeted  Initiating the rationalization of program safety net programs  An integrated MIS system that links  In place for unconditional cash information on enrollment, benefit; underway for CCT eligibility, payments, and appeals is fully functional.  Grievance redressal system for  Completed eligibility/targeting developed and implemented, with at least 80% of grievance claims settled within three months of application.  Baseline survey of BISP impact  Baseline survey completed; draft evaluation analyzed for targeting report under review performance and administrative improvements agreed; and results are widely disseminated.  Cabinet adopts revised National  Due to decentralization legislation Social Protection Strategy (NSPS). and unclear federal/provincial Cabinet adopts consolidation of mandates, NSPS responsibilities selected federal safety net programs remain undefined. under the safety net authority. Reform area 2.2: Exit and graduation strategies developed Improve SSN program  Implementation agency for the CCT  CCT program to be run in beneficiaries’ access to income identified along with coordination collaboration between BISP and generating opportunities by: arrangements with the BISP; CCT provinces. MoUs spelling out  Providing incentives to invest expanded to 30 districts, responsibilities signed with all in human capital accumulation. incorporating evaluation results into except Punjab; roll-out in 20 program design. districts expected by September 2012  BISP beneficiaries linked to selected other human development services  CCT linked to primary education; and programs for enhancing access design finalized in consultation to income generating opportunities. with provinces  Pillar III: Enhance fiscal sustainability and strengthen the fiduciary environment Reform area 3.1: Safety net expenditures adequate and sustainable Ensure safety net spending  BISP budget allocation for FY09/10  Completed  consistent with the is consistent with the medium term macroeconomic framework by: macro-economic framework and  Allocating sufficient funds for adequate to pay the agreed benefit safety nets program amount to at least 5 million families implementation (with associated cut off score established, taking into account the test phase evidence Reform area 3.2: Control and accountability of BISP payments improved Improve timely delivery and  FM system fully functional, with FM  Underway tracking of BISP payments to the audit reports regularly available and poor by: observations fully settled  Agreeing and implementing 7 benefit delivery mechanisms.  Reconciliation process of payments  Completed  Developing and implementing fully functional control and accountability  Social accountability systems  Process evaluation and spot checks systems for benefit payments. adopted to assess payment and are being conducted regularly by  Developing and adopting a enrollment processes, e.g. posting third party firms who provide strategy for monitoring beneficiary lists in designated regular feedback program performance. locations or establishing mechanisms for wide dissemination of program information (websites, etc.)  Grievance redressal system for  System in place; claims settlement payments established; and 80% of target under continuous monitoring total claims settled within 6 months. 2.2 Major Factors Affecting Implementation: 15. The following factors contributed to the successful implementation of the program:  1) There was (and continues to be) strong Government commitment to reforming the safety net as a first step in shaping a viable national social protection system. This is reflected in the prominent role that safety net reform had in the PRSC (May 2007) and the efforts that have gone into articulating an operational social protection strategy, including with donor assistance. It is also reflected in the unanimous approval by Parliament of the law establishing BISP in 2010, and endorsing the institution as the country’s national safety net authority under the Prime Minister’s office. Lastly, Government commitment is reflected in the steadily increasing budget allocations for the safety net program. 2) The Government has pursued a program design that combines international best practice by putting in place separate agencies to conduct the enrollment process, determine program eligibility and pay benefits, all under the BISP umbrella. It has included extensive monitoring, evaluation and other control and accountability mechanisms as integral elements of the reform. Finally, it has adopted the poverty scorecard as an objective national targeting instrument to identify safety net beneficiaries. 3) A strong governance structure with broad representation ensures a high degree of national consensus about the program. In particular, the governance structure includes a Board advised by a council headed by the President and the Prime Minister, and consisting of representatives of government agencies, non- governmental organizations and technical experts, all with relevant experience in the field. 4) IDA support was based on prior analytical work that included (i) a report on social protection in 2007 which spelled out the main pillars of intervention 1 , subsequently reflected in the SSN DPC and the related TA project, and now in the ACR project, (ii) a study on the design and implementation of effective safety 1 Social Protection in Pakistan. Managing Household Risks and Vulnerability. World Bank. 2007. 8 nets (2008), (iii) a child support program rapid assessment (2009), and (iv) a poverty and social impact assessment (2009). 5) The pairing of the SSN DPC with the SSN TA project was an effective means of maintaining reform momentum in implementing policy initiatives and facilitating continuity of themes that were supported under the SSN DPC. The SSN TA project has a particular focus on objective targeting, monitoring and evaluation, governance, and innovations in payments and graduation paths for beneficiaries out of poverty. The Additional Financing provided for that project will allow continued support for the expansion of the basic cash transfer program to eligible poor families, and the introduction of CCT for BISP beneficiaries linked to primary education, as well as further strengthening of the program institutions. 6) As a national platform, BISP has been able to attract other donors’ participation (DFID, USAID and ADB) and harmonize their support with that of IDA around the common objective of putting into place a coherent national program. 7) The political, economic and implementation risks to the SSN DPC that were considered substantial at the time of appraisal did not materialize.  The main political risks to project success were deemed to stem from the volatile country situation including security concerns that could impede the nationwide roll-out of the targeting process, as well as organizational and institutional risks pertaining to the newly created implementing agency (BISP) and potential drawbacks to the institutional changes supported by the project – in particular the introduction of a new beneficiary selection mechanism (the poverty scorecard) to replace earlier targeting mechanisms, and the harmonization and consolidation that establishing a national platform implied. So far, to a large extent these concerns have not materialized: there has been bipartisan consensus about the need for an effective safety net program; and the institutional reforms to the safety net have been accepted, to a significant extent as a result of the transparency that was introduced into BISP operations. However, continuing reluctance of Punjab to participate in the CCT program is a concern, signifying the continued relevance of the highlighted political risks.  Economic risks arising from fluctuations in the international economy and their transmission through the fiscal system might have had an impact on the availability of budget resources. While the macro-economic situation stopped disbursement of the second tranche of the SSN DPC, the Government has so far maintained (and even increased) allocations to BISP, including committing resources into the medium term that would maintain the safety net at 1 percent of GDP. This is, moreover, consistent with the fiscal costs of safety net programs in other countries with comparable levels of income, as well as with other countries in the region.  Implementation risks related to the introduction of the new targeting system (the poverty scorecard) and BISP administrative capacity. So far, these risks have not materialized. The poverty scorecard has been generally accepted as the template for the national targeting mechanism and plans on its roll-out are proceeding. The building up of BISP administrative capacity is still underway 9 with the support of the SSN project and other donors, and this support should mitigate significantly any risks in this area. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: 16. The program was monitored using several mechanisms. The administrative records and the BISP MIS (which is continuously being improved), combined with the NADRA id database and post-office payment reconciliation system provided timely information on the distribution of beneficiaries and the status of payments. The status of progress on various policy actions, such as the submission of the BISP law to the parliament (and its subsequent approval) were certified by competent authorities identified for each such prior action. Utilizing primarily DFID trust funds, the Bank team also commissioned several third party assessments including spot checks to confirm the accuracy of the collected poverty scorecard data. Third party process evaluations also provided timely inputs to the partner organizations in the collection of data.   17. The M&E efforts continue, building on the work done to date. A comprehensive results framework and monitoring and evaluation system is being put into place gradually with the help of the SSN project and DFID. It will consist of a broad set of measures designed to provide timely and accurate information on program implementation. The program will have internal monitoring systems as well as external third party mechanisms. Internal systems will include (i) an integrated management information system that, when fully functional, will allow BISP to access information on applicants and beneficiaries, generate payment lists, handle grievances and reconcile payments; and allow BISP to share and cross-check information with partner agencies; (ii) a dedicated monitoring and evaluation unit to support the monitoring of its programs; and (iii) a computerized appeals and complaints system and social accountability mechanisms. To enable BISP to undertake its monitoring role effectively, it is strengthening its capacity in the head office to undertake field supervisory missions. Impact evaluations are planned that will focus on the effects of cash transfers on the socio-economic conditions of beneficiary families. They are structured in two phases – the first to focus on evaluating the test phase of implementation processes (which is ongoing) and consists of a series of operational audits; and the second to focus on the impact of the program on beneficiaries.  18. In their current state, the M&E systems are designed to monitor the effectiveness of the various program processes and correct inefficiencies before they are rolled out on a national scale. Once the operations are up to scale, the M&E systems should allow monitoring of all aspects of the safety net program on a continuous basis and provide transparency and accountability to system operations, as well as to undertake evaluations of processes and the effects of the program on beneficiary households. The systems should also allow the Bank and other international organizations to target future assistance to critical features of the safety net.    At this time spot-checks, process evaluations and beneficiary assessments are being undertaken on a need basis. The baseline survey data collection to document the impact of the program on beneficiary households has been undertaken in 2010/11. The first follow-up survey is currently being fielded, with a second follow-up being scheduled for 2013. 2.4 Expected Next Phase/Follow-up Operation (if any): 10 19. IDA will continue to provide assistance to the implementation of the safety net program under the new SSN project until end-June 2016. This will also allow IDA to continuously monitor progress in the program.  3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 20. The PDO was and continues to be highly relevant. It is fully consistent with the country’s objective to build up an effective safety net, and it supports current Country Assistance Strategy. The actions supported under the DPC and the mechanisms being developed and implemented under the companion SSN project are in turn are fully consistent with the DPO objective.  3.2 Achievement of Program Development Objectives 21. The prior actions under the DPL served to put in place the legal and regulatory framework for the organization and institutions necessary to implement the safety net reform program. The implementation of the program and the establishment of the safety net are being undertaken with the help of were and continue to be assisted by resources from the SSN project as well as related assistance from DFID, the EU and the ADB. A time horizon of mid-2016 has been set for having an operational safety net at the national level in place, consisting of a poverty-targeted cash benefit, an education-focused CCT and the related organizational structures in operational shape. This support has served to ensure steady progress in developing the system, which might not have been the case in the counterfactual: neither Pakistan nor the other donors individually have the necessary capacity or experience or financial resources for such an undertaking.  22. In addition to all the prior actions, the outcome indicators specified for 2010 were also met, as follows:   1) Increase in the share of beneficiaries enrolled in the BISP program using the new targeting mechanism from 0 to at least 30 percent of total beneficiaries. This outcome was met. According to the BISP database, as of December 31 2010, the BISP had 1.11 million beneficiaries identified through the poverty scorecard survey. The number of first-phase beneficiaries remained at 2.2 million at that time. Thus 34 percent of total beneficiaries were identified through the new targeting mechanism. The universal application of the new targeting mechanism nationwide was achieved by the summer of 2011. In other words, the stated goal for 2010 was met as planned and the previous system was completed phased out by the summer of 2011. 2) Increase in the share of total benefit expenditures reaching the poorest 40 percent of the population from 46 percent to at least 55 percent. This outcome was met, which is a direct consequence of the targeting efficiency of the new instrument. Furthermore, as a result of the nationwide application of the new targeting mechanism, by the summer of 2011 the share of benefits reaching the poorest 40 percent of the population is estimated to be 75 percent. 11 3) Increase in program applicants receiving a response on whether they qualify for the program within 3 months from scorecard form submission, from 0 to at least 50 percent of total applicants. This outcome was met. BISP administrative data indicates that in 80 percent of the cases all eligible beneficiaries receive a letter from BISP within 3 months of scorecard data collection. 4) Increase in benefit payments audited from 0 percent to at least 50 percent of total payments under the new payment system and improvement in reconciliation time lag from the present indefinite period to two months. This outcome was met. As of December 31 2010, the number of poverty scorecard beneficiaries receiving funds through smartcards was about 172,000 (while 938,000 beneficiaries received funds through Pakistan Post). The reconciliation of the new (smartcard based) payment system was always within 2 months. 5) Increase in percentage of participating (poverty-scorecard) districts in which beneficiary lists are publicly available, from 0 to at least 30 percent. This outcome was met, with beneficiary lists being publicly available in all BISP field offices, on demand. These lists are often not posted however, due to display space constraints and the need to update benefit receipt information frequently (e.g., beneficiaries who do not have NADRA IDs do not receive payments until an ID is issued). The BISP website also provides poverty score and eligibility status information through the submission of CNIC or the survey form number.  23. The following describes the achievements made with regard to the three project pillars:  Pillar 1: Improving the targeting efficiency of safety net programs 1. The establishment of a national targeting system. A national targeting system has been introduced. As a prior action, the Government approved the poverty scorecard as the basis for a national poverty targeting system and introduced the necessary legal and regulatory measures to that effect. The poverty scorecard was also piloted. Under the SSN TA project, the instrument was applied nationally, resulting in the establishment of a national data registry and the development of data sharing protocols for broader application of the registry. Pillar 2: Establishing an institutional framework for program implementation 2. Institutional arrangements for safety net administration developed. As a prior action, BISP was established as an autonomous national safety net authority, and policy guidelines for its operation were approved. In addition, the Government confirmed its intention to expand a fledgling CCT program and place it under BISP auspices. Under the SSN TA project, cutting edge technology in payment and grievance redressal mechanisms were introduced, including testing of mobile phone and smart card based payments as alternatives to postal delivery. Third party monitoring and evaluation mechanisms including process, spot check and impact evaluation were launched to support a comprehensive monitoring and evaluation (M&E) system for active management of targeting, payments, and grievance redressal. The process evaluation and 12 spot checks are underway and the baseline survey for impact evaluation has been completed. These elements are critical to understand program effectiveness, improve accountability and assist with resource allocation. The SSN project will support the expansion of the CCT program and development of a fully functional Management Information System down to the local office level that will facilitate local information sharing and grievance management and introduce the necessary information systems for the CCT. The SSN will also support further monitoring of BISP activities, including an additional round of impact evaluation measurement, as well as revise the scope of the evaluation to include CCTs. Spot checks and process evaluations will be expanded over time and scope as well. The revised scope of the evaluation will specifically look into the enrollment, compliance monitoring and related grievance systems designed for the CCT. The project will continue to support the costs of BISP‘s additional human resource requirements for the duration of the SSN project. Pillar 3: Enhancing Fiscal Sustainability and Strengthening the Fiduciary Environment 3. Ensuring adequate and sustainable safety net spending consistent with the macroeconomic framework. Maintaining a viable macroeconomic framework was an underlying condition for the disbursement of DPC tranches. At the time of approval and disbursement of the initial tranche of the DPC, IDA had evaluated and judged the macroeconomic framework to be appropriate, and this view was endorsed by the IMF. Subsequently, fiscal sustainability was threatened by shocks to the international economy, and the second tranche disbursement was cancelled, even though the second tranche conditions had already been met. The cancelled resources were subsequently included in the ACR project that replaced the TA project. Since that time, and as a result of the fiscal and monetary policies subsequently followed by the Government, and improved external environment as the crisis receded, the macroeconomic situation has stabilized. The cancellation of the second tranche did not end up affecting the process of building the safety net, since the Government counterparts understood the reasoning behind the cancellation and continued their strong investment in the program. In terms of ensuring sufficient funds, the Government met the prior action of allocating the necessary funds to pay benefits to 3.4 million households (the total number of eligible households at that time) and still remain within the medium-term macroeconomic framework. Subsequent increases in budget allocations allow coverage of some 4.5 million households. However, the nationwide roll-out has indicated that there are some 7 million eligible families, which exceeds affordable levels for the Government. In part, this may reflect the effects of the financial and commodity price crisis. It is unlikely that the Government will be able to cover all eligible households: so far it has allocated some US$2 billion to BISP for the 2011-2014 period. This raises government spending on safety nets to 1 percent of GDP, but remains inadequate to cover all poor households. It is expected that the SSN project and other donors will provide the necessary resources to cover all 7 million potentially eligible households. 4. Control and accountability of BISP payments improved. As a prior action, BISP signed a partnership agreement with the postal service for the delivery of cash payments (the BISP is now relying increasingly on smartcard system for the delivery of payments). As noted above, an MIS system has been put into place under the SSN TA project (and will be further developed under the SSN project) that will facilitate local information 13 sharing with the public as well as handle grievances. The grievance management module has already been tested and is ready for implementation. Nation-wide roll-out will be undertaken with the help of the ACR project, as will an electronic payment system. These elements play a critical role in advancing greater transparency and accountability. 3.4 Justification of Overall Outcome Rating Rating: Highly satisfactory 24. The objective was to support the establishment of an appropriate policy framework for an efficient safety net system, including the development of sound institutions for the effective implementation of the Benazir Income Support Program (BISP). This objective has been fully met. The DPC has helped to set the basis for a safety net system consisting of both an unconditional and conditional cash benefit overseen by an evolving national organization, applying a targeting mechanism based on a survey-based proxy means test. The regulatory foundation for transparency and accountability has been laid, including a management information system. At the same time, the Government has allocated significant resources to the program, amounting to 1 percent of GDP. That said, it still remains to be seen if the Government will have the resources to reach the targets set for the program reaching 7 million families, plus the additional resources required as top up for the CCT. So far, this appears to be possible only with continued donor, including IDA, support. On its own, the Government would have to limit the number of beneficiaries to available resources. This would still include a significant number of households, some 4.5 million families. The combination of intensive sector work, development policy lending and technical assistance has proven to be an approach that has moved the process forward efficiently and effectively towards the institutional objectives that had been set at the beginning.  3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development:   25. While the cash benefit is a flat benefit at a relatively low level, its introduction into poor households is likely to have positive benefits: it provides additional income for consumption and, as recent studies of money management at low and very low levels of income have shown, for saving and investment, and managing shocks, as well as providing predictability in household income flows, which tends to facilitate planning even among very poor households. The introduction of a CCT should have a positive effect on school attendance overall, and especially by girls. While these effects are unlikely to have a significant poverty reducing impact, they should nonetheless serve to raise well-being among chronically poor households. To the extent that the BISP program offers scope for flexibility – which it will do due to the extensive household information registries that a full MIS will provide – it should also be an effective tool in addressing temporary poverty resulting from environmental and external economic shocks.  (b) Institutional Change/Strengthening:   26. It has already been noted above that the project has brought about significant institutional changes in safety net processes – targeting, selection, beneficiary administration – for both unconditional and conditional cash transfers. Since BISP also 14 will serve as a national platform for safety nets, it can further facilitate the  harmonization of programs at national as well as sub-national levels.   (c) Other Unintended Outcomes and Impacts: None 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops None were undertaken. 4. Assessment of Risk to Development Outcome Rating: High 27. Political risks. At appraisal, the main political risks related to the effects on the roll-out of the targeting process of a volatile security situation, as well as the potential effects of a new government coming into power. The former risk has not materialized, and roll-out is proceeding as planned. The latter risk remains a possibility even as the program continues to have broad support at this time.   28. Financial risks. The Government has steadily increased budget allocations to BISP with the intention of raising budget support for the safety net to 1 percent of GDP over the medium term, possibly covering some 5 million households. However, a number of factors need to be considered: (i) recent economic events (see below) point to considerable economic and fiscal volatility; (ii) the nationwide roll-out of the poverty scorecard has resulted in some 7 million eligible households, a number the Government cannot afford to cover at least in the medium term, and donor support is being sought to help finance broader coverage (the SSN project is currently financing some cash benefits); (iii) the coverage can (and should) be adjusted to available fiscal resources.  29. Economic risks. External shocks and the effects of natural disasters impose risks on the Pakistan economy. The economy was badly destabilized by the turmoil in the international commodity and financial markets in 2007-2008. The devastating floods in 2010 and recent increases in international oil and food prices exacerbated the problem: the country saw a slowdown in economic growth and an increasing budget deficit. Weak revenue mobilization and significant power sector subsidies.. Overall, it is believed that the challenge for the Government is to satisfy a wide range of competing demands and pressing needs over the medium term. A new sustained pro-poor growth strategy is under preparation.   30. Institutional risks. These relate to the development of an autonomous safety net agency – BISP; and the introduction of a new targeting system. As a result of significant technical assistance (still ongoing, as the CCT program is being introduced and the local BISP office network expanded), the BISP central office is adequately staffed and has well documented institutional arrangements and systems in place. The introduction of the poverty scorecard has so far been successfully undertaken. Significant institutional risks remain however, since the implementation of conditional cash transfers for education necessitates the support of provincial governments. At this time, Punjab Government has not made a commitment for collaboration with BISP to implement the CCT component of the program.  5. Assessment of Bank and Borrower Performance 15 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 31. The operation was developed drawing on the knowledge and experience that had been gathered through prior analytical work and collaboration with the Government on developing a national social protection strategy. This ensured that the actions supported by the operation were consistent with needs and the country’s long term development goals. The operation was further strengthened through discussions that led up to the introduction of a companion Technical Assistance project. Efforts to collaborate with other key donors, such as DFID and the IMF also contributed to the timely preparation and relevance of the operation.   (b) Quality of Supervision Rating: Highly satisfactory 32. The Bank supervision of the operation was continuous. Since all DPL prior actions were completed before the operation was submitted to the Board, the implementation of the program was supervised in the context of the companion SSN TA project, and this will continue under the SSN project. These projects provided a results framework with indicators to monitor progress on the various elements of the program, as well as continuous technical support on key issues. Despite the cancellation of the second-tranche due to an unfavorable macroeconomic assessment, the Bank was able to come up with an arrangement (additional financing in the form of the SSN project) to support the program. The fact that the same IDA team oversaw all three operations provided an additional level of insight into issues, and continuity and credibility with Government authorities.   (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 33. The overall Bank performance is judged to be satisfactory on the basis of satisfactory quality at entry and the highly satisfactory quality of supervision.  34. The operation supported relevant development objectives, introducing a flexible safety net system. It used the combination of development policy lending and technical assistance to build the necessary institutions. It drew on the support of other donors, when needed. It provided continuity in the relationship with the Government and technical authorities in maintaining the same team – a strong combination of understanding of the political environment, operational knowledge, and technical know- how. Finally, the monitoring and evaluation systems put in place allowed both the Government and the Bank to continuously track and ensure progress towards target outcomes.  5.2 Borrower Performance (a) Government Performance 16 Rating: Satisfactory 35. With high levels of chronic poverty and weak safety net programs, the Government recognized the need to reform the safety net. It had a long term vision for social protection set out in its PRSP and Social Protection Strategy, and the establishment of BISP represented the start of an ambitious reform agenda for the safety net. The Government was quick to proceed with building the institution: the poverty scorecard was adopted; and a targeting system with separate agencies for enrollment, eligibility and payment was agreed on – both firsts in the South Asia region and in line with international best practice. It also included monitoring and evaluation mechanisms to inform policy. These elements provided structures of transparency and accountability to the reform which made it broadly acceptable in the political environment. Moreover, support for the program was early on expressed at the highest political level in the form of the prime minister. In the process, only maintaining of a satisfactory macroeconomic performance proved difficult, in part reflecting external forces (the financial and commodity crises) and the 2010 floods. All triggers and prior actions were met, however, which would otherwise call for a highly satisfactory rating.   (b) Implementing Agency or Agencies Performance Rating: Satisfactory 36. The key implementation agencies were a Government Management Board to oversee the implementation of the project and BISP itself. The former was able to address policy issues as they arose, and BISP was able to introduce and absorb necessary institutional changes and changes in its business processes in a timely way, and continues to do so as it evolves.   (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory 37. The rating is “Satisfactory�. All triggers and prior actions were met, and a rating of “highly satisfactory� would have been appropriate but was not considered because of the cancellation of the second tranche (due to the Government’s inability to maintain a stable macroeconomic environment). The shocks to the macroeconomic framework were partly external and should not diminish the Government’s performance in taking the initiative to develop the system, in seeking outside expert support, and in creating an environment that has allowed significant progress on difficult institutional issues in a volatile environment. Risks – political, institutional, and economic – were recognized from the beginning of the progress, and the Government was able to address the risks over which it had influence – the political and institutional ones – without endangering the objective. 6. Lessons Learned 1. A very strong Government commitment and political will has been instrumental in moving the safety net reform agenda forward in Pakistan. The Government has 17 taken politically difficult but necessary decisions, including phasing out parliamentarian-based beneficiary identification in favor of an objective, poverty- scorecard based beneficiary identification. The payments to parliamentarian- identified beneficiaries were discontinued as the new system rolled out nationwide. In its desire to achieve broad-based approval of the program, the Government also appointed non-political members to the BISP Board. 2. A National ID Database had already been established by NADRA, which the BISP utilized for defining families in a manner that is operationally relevant. The BISP was then able to build on this database by linking poverty scorecard data to it. 3. The BISP’s partnerships with three different organizations (PCO, PPAF and RSP) for the implementation of the poverty scorecard survey helped in building the credibility of the resulting database. The decision to undertake program implementation in two phases ensured better quality data, since third-party spot- checks and process-evaluations of the test-phase provided valuable lessons-learnt. 4. A relatively strong analytical basis (in particular the documentation of the weak performance of existing safety net programs and the development of a proxy- means-test for Pakistan) and prior collaboration between IDA and the Government is important in facilitating operations of this nature, in particular the relatively rapid introduction of reforms that involve difficult institution-building challenges. 5. Linking a DPL to technical assistance or investment operations with a strong emphasis on TA ensures that decisions underpinning a DPL do not remain “dead letters�. Instead they provide scope for developing and implementing a detailed roadmap for putting a reform program into place. 6. Maintaining an IDA team with necessary operational knowledge, technical expertise and political sensitivity throughout the process of preparation and implementation of a program facilitates things for IDA as well as the Government: the knowledge that the IDA team is able to build and the inter- actions that develop between the team and the Government counterparts facilitate the development of complex institutions. 7. Coordination with other donors can be particularly useful if well done and timely. In this case, DFID support was important in getting early traction on developing the poverty scorecard and providing rapid technical assistance, which was central to advancing the overall effort.    18 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing agencies: See Annex 4. 19 Annex 1: Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Cem Mete Senior Economist SASHD TTL Iftikhar Malik Senior SP Specialist SASHD Co-TTL Andrea Vermehren Senior SP Specialist SASHD Operations Xiaohui Hou Economist SASHD Operations Aylin Isik-Dikmelik Economist SASHD Operations Naveed Hasan Naqvi Sr Education Economist SASHD Operations Julie-Anne Graitge Program Assistant SASHD Assistant Rubina Quamber Program Assistant SASHD Assistant Gertrude Cooper Program Assistant SASHD Assistant Satu Kahkonen Lead Economist SASEP Macro policy Hanid Mukhtar Senior Economist SASEP Macro policy Javaid Afzal Environmental Sp. SASDI Environmental Asif Ali Sr Procurement Sp. SARPS Procurement Ismaila Ceesay Lead Financial Mgmt Sp SARFM FM Saaeda Sabah Rashid Financial Mgmt Sp SARFM FM Shahzad Sharjeel Sr External Affairs Officer SAREX Communications Maniza Naqvi Sr SP Specialist ECSHD Operations Martin Serrano Counsel LEGES Legal Jorge Luis Alva-Luperdi Consultant SASHD Targeting Sohail Abbasi Consultant SASHD Coordination Salma Jafar Consultant SASHD Coordination Amjad Safar Khan Consultant SASHD Coordination Supervision Asif Ali Senior Procurement Specialist SARPS Procurement Muhammad Iftikhar Malik Sr Social Protection Specialist SASSP Operations Andrea Vermehren Sr Social Protection Specialist SASSP Operations (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage USD Thousands (including No. of staff weeks travel and consultant costs) Lending Total: 79.31 376,680.90 Supervision/ICR Total: 47.80 263,248.71 20 Annex 2. Beneficiary Survey Results N/A 21 Annex 3. Stakeholder Workshop Report and Results N/A 22 Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR 23 24 25 26 27 28 Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders N/A 29 Annex 6. List of Supporting Documents PAD Social Safety Net DPC PAD Poverty Reduction and Economic Support Operation PAD Restructuring and Scale-Up of the SSN – Additional Financing PAD Social Safety Net TA Project ISRs 1009-1106 SSN DPC/TA Projects Supervision Reports January 2010; June 2010 SSN DPC Financing Agreement Letter of Development Policy 2009 CAS 2006 CPS 2011 PRSP 2004 30 Annex 7: Policy Matrix Table 1 Overall outcome goals: Overall 2010 outcome indicators: 1. Targeting efficiency of the safety net programs improved. 1. Increase in the share of beneficiaries enrolled in the BISP program using the new targeting mechanism from 0 to at least 30 percent of total beneficiaries. 2. The institutional framework for the effective implementation and monitoring of safety nets 2. Increase in share of total benefit expenditures reaching the poorest 40 percent of the population established. from 46 percent to at least 55 percent. 3. Increase in program applicants receiving a response on whether they qualify for the program 3. The transparency and timelines of the payment and reconciliation system improved. within three months from scorecard form submission, from 0 to at least 50 percent of total applicants. 4. Increase in benefit payments audited from 0 percent to at least 50 percent of total payments under the new payment system and improvement in reconciliation time lag from the present indefinite period to 2 months. 5. Increase in percentage of participating (poverty-scorecard) districts in which beneficiary lists are publicly available, from 0 to at least 30 percent. FIRST TRANCHE Pillar 1: Improving the Targeting Efficiency of Safety Net Programs 1. National targeting system established Medium Term Objectives Prior Actions Verification of Prior Actions Medium Term Milestones Objective: Increase the share of the 1. A national targeting system 1a. Agreements with Partner Organizations (POs) to  Independent agency/ies for poor receiving safety net benefits established to implement the poverty scorecard implement the poverty score card data collection nationwide roll through method, through contracting of separate agencies during the test phase signed by BISP, and criteria for out appointed, based on performance for scorecard data collection and eligibility their performance evaluation established. evaluation criteria. Developing and initiating the data determination. collection system. 1b. Agreement with data processing agency signed by BISP, including eligibility determination.  Nationwide scorecard roll out (in at least Developing the eligibility 70% of districts in the country) determination system. 2. Policy decision on improving BISP 2. Minutes of the BISP Board outlining the policy completed and data processed for targeting mechanism and transition of BISP decision on transition for BISP enrollees under the eligibility determination. enrollees under the parliamentarian based system parliamentarian based system. Developing and implementing the taken by the BISP Board, removing existing  Process evaluation and spot checks monitoring mechanism for targeting. beneficiaries from the program if they do not for the complete the scorecard targeting form or qualify quality assurance of scorecard roll out under the new targeting system. established and results made available on  Effective mechanisms to ensure the quality of  Criteria for targeting process evaluation and a regular basis. data collection for the test phase of poverty guidelines for data quality spot checks contained in the scorecard based targeting process adopted. Targeting Manual approved by the BISP management. 31 Pillar 2: Establishing an Institutional Framework for Safety Net Program Implementation 2. 1. Institutional arrangements for safety net administration developed Medium Term Objectives Prior Actions Verification of Prior Actions Medium Term Milestones for the Reform Program: Objective: Improve the administrative 3. BISP established as an autonomous 3. Ordinance for the creation of BISP as an  BISP offices at federal, provincial and efficiency of safety net programs through statutory safety net authority to autonomous agency adopted by the divisional levels are adequately staffed in implement safety net programs through Government. accordance with the Organizational Structure Developing a legal framework for safety adoption of a legal ordinance with outlined in the BISP operational policy guidelines. nets. (i) clear financial and administrative autonomy; and (ii) distinction in roles of  Public information campaign rolled out to Adopting institutional arrangements for the Board, the Chairperson and the support expansion of targeted program program implementation. Secretary for the oversight and management of program implementation.  An integrated MIS system that links Initiating the rationalization of safety nets information on enrollment, eligibility, payments, programs. 4. Administrative policy guidelines for 4. Satisfactory administrative policy guidelines and appeals is fully functional. effective BISP program implementation as contained in the Operational Manual adopted by BISP, as approved by its approved by BISP Board. board.  Grievance redressal system for eligibility/targeting developed and implemented,  with at least 80% of grievance claims settled  The update of the National Social Notification of the establishment of the within three months of application. tection Strategy (NSPS) initiated to include NSPS Review Committee under the Planning program rationalization and establish the Commission and work plan for the revision of institutional framework for enhanced strategy.  Baseline survey of BISP impact evaluation coordination and delivery of social protection analyzed for targeting performance and programs administrative improvements agreed; and results are widely disseminated. 5. Policy decision to remove overlapping 5. Letter signed by Ministry of Finance, mandates of BISP and PBM in delivering conveying the policy decision regarding the  Cabinet adopts revised NSPS. unconditional cash transfer programs removal of overlaps in the mandates of BISP taken by the Prime Minister. and PBM in delivering unconditional cash  Cabinet adopts consolidation of selected   transfer programs. federal safety net programs under the safety net authority. 32 2. 2. Exit and Graduation Strategies developed Medium Term Objectives Prior Actions Verification of Prior Actions Medium Term Milestones for the Reform Program: Objective: Improve SSN program 6. Child Support Program (a 6. Letter by MD PBM providing implementation  Implementation agency for the CCT   beneficiaries’ access to income generating conditional cash transfer [CCT] pilot) plan and budget allocations for the CSP. ntified along with coordination arrangements with  opportunities through expanded, using a poverty-score-card the BISP; CCT expanded to 30 districts,  based targeting method. incorporating evaluation results into program  Providing incentives to invest in human design.  capital accumulation.  BISP beneficiaries linked to selected other human development services and programs for enhancing access to income generating opportunities. Pillar 3:  Enhancing Fiscal Sustainability and Strengthening the Fiduciary Environment  3.1. Safety net expenditures adequate and sustainable Medium Term Objectives Prior Actions Verification of Prior Actions Medium Term Milestones for the Reform  Program:  Objective: Ensure Safety nets spending  BISP budget allocation for FY 08/09  Safety net expenditures in line with PRSP  BISP budget allocation for FY09/10 is consistent with the macro-economic is consistent with medium term macro- expenditure targets. consistent with the medium term macro-economic framework through economic framework and adequate to pay framework and adequate to pay the agreed benefit the agreed benefit amount to at least 3.4 amount to at least 5 million families (with Allocating sufficient funds for safety nets million families. associated cut off score established, taking into program implementation. account the test phase evidence). 3.2. Control and accountability of BISP payments improved Medium Term Objectives Prior Actions Verification of Prior Actions Medium Term Milestones for the Reform  Program:  Objective: Improve timely delivery and 7. Independent payment agency 7. Partnership agreement signed between the  FM system fully functional, with FM audit tracking of BISP payments to the poor appointed, policy guidelines and BISP and Postal Services for providing cash reports regularly available and observations fully through procedures for ensuring timely delivery of grants to BISP beneficiaries. settled. Agreeing and implementing benefit delivery payments agreed.  Reconciliation process of payments fully mechanisms. functional.  Based on PPRA 2004, procurement      Procurement procedures manual available  Social accountability systems adopted to Developing and implementing control and delines for BISP developed and approved by  and BISP procurement staff trained on the assess payment and enrollment processes, e.g. accountability systems for benefit payments. the BISP Board.  related procedures. posting beneficiary lists in designated locations or   establishing mechanisms for wide dissemination Developing and adopting a strategy for  Independent operational audit  Organizational arrangement for  of program information (websites, etc.). monitoring program performance. arrangements for BISP adopted. independent    Grievance redressal system for payments 33 erational audit, including internal audit is available.     established; and 80% of total claims settled within 6 months. SECOND TRANCHE Pillar 1: Improving the Targeting Efficiency of Safety Net Programs Medium Term Objectives Triggers Verification of the Triggers Medium Term Milestones for the Reform (Identical to First Tranche Pillar 1) Program (Identical to First Trance Pillar 1) Objective: Increase the share of the poor 8. Poverty scorecard data collection 8. Poverty scorecard information for at least 8  Independent agency/ies for nationwide roll receiving safety net benefits through completed in selected pilot districts. districts transmitted to the data processing out appointed, based on performance evaluation agency. criteria. Developing and initiating the data collection 9. The BISP has (i) implemented the system. 9a. Notification of poverty score card based policy decision to remove beneficiaries of the  Nationwide scorecard roll out (in at least parliamentarian based system who do not beneficiary lists, replacing the parliamentarian 70% of districts in the country) completed and complete the scorecard form or qualify under based enrollees, transmitted to the payment data processed for eligibility determination. Developing the eligibility determination the poverty-scorecard based system; (ii) agency for at least 5 districts. system. adopted a transition policy including but not 9b. Transition policy adopted by the BISP  Process evaluation and spot checks for the limited to grievance mechanisms, definition Board. quality assurance of scorecard roll out of cut-off score for eligibility, plan for established and results made available on a Developing and implementing the national roll-out, and communications regular basis. monitoring mechanism for targeting. strategy. 34 Table 2. Comparing outputs from the DPC, TA and ACR Project Outputs SSN DPC TA project SIL Pillar 1: Improving the Targeting Efficiency of Safety Net Programs 1. National targeting  Legal and regulatory Targeting design finalized and system established environment for a new national roll-out started national targeting National poverty data registry system put in place established (See bullets under pillar 3,  Mechanisms for data outcome 4) collection and  Data sharing protocols processing agreed developed for harmonization with other programs Pillar 2: Establishing an Institutional framework for Safety Net Program Implementation 2. Institutional  BISP established as an Operationalization of BISP  General social mobilization of arrangements for safety autonomous safety net central office BISP families net administration authority and Field testing of payment and  Further strengthening of BISP developed administrative policy reconciliation functions local network, linking it to the guidelines adopted MIS Development of a program  Following field testing under communications strategy and TA, grievance redressal grievance mechanism mechanisms rolled out Comprehensive M&E system  Further development of the data put in place for active base management of targeting, payments, grievances  Financing of additional BISP human resource needs.  Establishment of local BISP network  Support for harmonization and collaboration between federal and provincial safety nets using the MIS 3. CCT program  Plan for the piloting  Technical support for the design and expansion of the and implementation of the CCT CCT program, including social (not addressed) mobilization of BISP families, expanding the communications strategy, expanding M&E functions to include CCT Pillar 3: Enhancing Fiscal Sustainability and Strengthening the Fiduciary Environment 4. Adequate and  BISP budget allocation   Cash payments to help cover sustainable safety net for FY08/09 consistent higher-than-expected numbers expenditures with medium macro- of beneficiary families economic framework  Related expansion of and adequate to pay the beneficiary processing capacity agreed benefit amount to at least 3.4 million families 5. improved control and  Independent payment  Localized trials of technology  Expansion of technology-based accountability of BISP agency (the Post) based beneficiary cash transfer payments payments appointed payments 35 IBRD 39361 PAKISTAN SOCIAL SAFETY NET DEVELOPMENT POLICY CREDIT CITIES AND TOWNS MAIN ROADS PROVINCE CAPITALS RAILROADS NATIONAL CAPITAL PROVINCE BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 65E 70E TAJIKISTAN 75E CHI CHI N A Ka h ra K2 K us NORTHERN k o r (Mt. Godwin- Austen) a m (8,611 m) du AREAS Ra PAKISTAN i n Chitral In d us H ng KHYBER e e 35N Approximate Line of Control PAKHTUNKHWA Saidu To Muzaffarabad Kargil Kabul Srinagar Peshawar Jammu ISLAMABAD and Kashmir Rawalpindi Kahat FED. CAPITAL AFGHANISTAN AF G H ANI S TAN Bannu TERRITORY ISLAMABAD lum Jhe Gujrat Gujranwala To Mandi ab D.I. Khan n To Che Kandahar Zhob Lahore Faisalabad vi Ra Chaman Zhob PUNJAB To To Bhatinda Ludhiana Sahlwal 30N Quetta D.G. Khan Multan tlej 30N Su us Ind To Kerman Bahawalpur Nok Kundi B A L O C H I S TA N Surab rt se ISLAMIC D e REPUBLIC INDIA r OF To Ranipur a h ng e Panjgur IRAN Khash T a nR i s hka kra Ma Moro Ma l To Turbat C e ntr a Bela SINDH Kerman To Jodhpur Gwadar Pasni Hyderabad 25N 25N Karachi Thatta Badin us Ind This map was produced by Rann of Kutch the Map Design Unit of The World Bank. The boundaries, Arabian Sea colors, denominations and 0 50 100 150 200 Kilometers any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the 0 50 100 150 Miles legal status of any territory, or any endorsement or acceptance of such boundaries. 65E 70E 75E JUNE 2012