Document of The World Bank Report No: ICR0000778 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-44230) ON A LOAN IN THE AMOUNT OF US$30.30 MILLION TO THE ARGENTINE REPUBLIC FOR THE STATE MODERNIZATION PROJECT June 30, 2008 Poverty Reduction and Economic Management Argentina, Chile, Paraguay, and Uruguay Country Management Unit Latin America and the Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective ­ June 25, 2007) Currency Unit = Arg. $ 1.00 = Variable US$ 0.33 US$ 1.00 = Variable Arg $ 3.02 FISCAL YEAR January 1- December 31 ABBREVIATIONS AND ACRONYMS AFIP Federal Tax and Customs Administration (Administración Federal de Ingresos Públicos) AGN Auditor General's Office (Auditoría General de la Nación) ANSES National Social Security Administration (Administración Nacional de Seguridad Social) APA Annual Performance Agreements (Acuerdos Programa) APL Adaptable Program Loan CAS Country Assistance Strategy CCO Chief of Cabinet Office (Jefatura de Gabinete de Ministros) CCP Citizens' Charter Program (Cartas Compromiso) CFFP Federal Council on Public Administration (Consejo Federal de la Función Pública) CLAD Latin American Center of Public Administration for Development (Centro Latinoamericano de Administración para el Desarrollo) CNCPS National Council for Coordination of Social Policies (Consejo Nacional de Coordinación de Políticas Sociales) CNV National Securities Commission (Comisión Nacional de Valores) CUIL Single Employment ID Code (Clave Única de Identificación Laboral) CUIT Single Tax ID Code (Clave Única de Identificación Tributaria) DINAPPFE External Financing Directorate (Dirección Nacional de Programas y Proyectos con Financiamiento Externo) DNPDP National Directorate of Personal Data (Dirección Nacional de Protección de Datos Personales) DO Development Objective ERR Economic Rate of Return GDP Gross Domestic Product GOA Government of Argentina IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report ICT Information and Communication Technology IEG Independent Evaluation Group IGJ General Justice Inspectorate (Inspección General de Justicia) INAP National Institute of Public Administration (Instituto Nacional de Administración Pública) INDEC National Institute of Statistics and Census (Instituto Nacional de Estadística y Censos) IMF International Monetary Fund IP Implementation Progress ISO International Organization of Standardization ISR Implementation Status Reports IT Information Technology LUA Single Student File (Legajo Único de Alumnos) MECON Ministry of Economy and Production (Ministerio de Economía y Producción) M&E Monitoring and Evaluation NPA National Public Administration NPV Net Present Value ONC National Procurement Office (Oficina Nacional de Contrataciones) ONEP National Public Employment Office (Oficina Nacional de Empleo Público) ONIG National Management Innovation Office (Oficina Nacional de Innovación en la Gestión) ONP Nacional Budget Office (Oficina Nacional de Presupuesto) ONTI National Information Technology Office (Oficina Nacional de Tecnología de la Información) PAD Project Appraisal Document PAMI National Social Services Institute for Retirees and Pensioners (Instituto Nacional de Servicios Sociales para Retirados y Jubilados) PDO Project Development Objective PIU Project Implementation Unit PSR Project Status Report QAG Quality Assurance Group RENAPER National Registry of People (Registro Nacional de las Personas) SECOP E-Procurement System (Sistema Electrónico de Contrataciones Públicas) SIDIF Integrated Financial Management System (Sistema Integrado de Administración Financiera) SIG Government Indicators System (Sistema de Indicadores de Gobierno) SINAPA National System of Administrative Professionals (Sistema Nacional de Profesión Administrativa) SINTyS Social and Fiscal National Identification System (Sistema de Identificación Nacional Tributario y Social) SIPRO Suppliers' Registry (Sistema de Proveedores) SIREPEVA Central Civil Servants' Registry (Sistema de Registro de Personal y Evaluaciones) SPFO SINTyS Provincial Field Office TAL Technical Assistance Loan TI Transparency International TTL Task Team Leader VUO One-Stop Institutional Window (Ventanilla Única de Organismos) Y2K The potential problems that might be encountered by computer hardware and software in processing year-date information for years beyond 2000 (the so- called "Year 2000 Problem") Vice President: Pamela Cox Country Director: Pedro Alba Sector Manager: Nicholas P. Manning Sector Leader: James Parks Project Team Leader: Kathrin A. Plangemann ICR Team Leader: Kathrin A. Plangemann Margarita Andrade ICR Primary Authors: Magali Junowicz María Cecilia Zanetta ARGENTINA STATE MODERNIZATION 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 Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design.............................................. 1 2. Key Factors Affecting Implementation and Outcomes ............................................. 6 3. Assessment of Outcomes......................................................................................... 14 4. Assessment of Risk to Development Outcome........................................................ 34 5. Assessment of Bank and Borrower Performance .................................................... 35 6. Lessons Learned ...................................................................................................... 38 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ......... 40 Annex 1. Project Costs and Financing.......................................................................... 42 Annex 2. Outputs by Component ................................................................................. 43 Annex 3. Economic and Financial Analysis................................................................. 48 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 48 Annex 5. Beneficiary Survey Results........................................................................... 49 Annex 6. Stakeholder Workshop Report and Results................................................... 49 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 50 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders...................... 55 Annex 9. List of Supporting Documents ...................................................................... 55 MAP IBRD 33362 ........................................................................................................ 57 A. Basic Information Country: Argentina Project Name: STATE MODERNIZATION Project ID: P057449 L/C/TF Number(s): IBRD-44230 ICR Date: 06/25/2008 ICR Type: Core ICR REPUBLIC OF Lending Instrument: TAL Borrower: ARGENTINA Original Total Commitment: USD 30.3M Disbursed Amount: USD 29.9M Environmental Category: C Implementing Agencies: Chief of Cabinet Office (Jefatura de Gabinete) National Social Policies Coordination Council (Consejo Nacional de Coordinación de Políticas Sociales) Co-financiers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 10/13/1998 Effectiveness: 1/15/1999 07/30/1999 06/27/2000 Appraisal: 11/24/1998 Restructuring(s): 07/03/2001 12/14/2005 Approval: 12/17/1998 Mid-term Review: 07/31/2000 Closing: 12/31/2001 12/31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Unsatisfactory Government: Moderately Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Overall Borrower Performance: Moderately Satisfactory Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Performance Indicators any) Rating Potential Problem Project at any time (Yes/No): Yes Quality at Entry (QEA): None Problem Project at any time Quality of Supervision (Yes/No): Yes (QSA): None DO rating before Closing/Inactive status: Satisfactory i D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 100 100 Theme Code (Primary/Secondary) Technology diffusion Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox Shahid Javed Burki Country Director: Pedro Alba Myrna Alexander Sector Manager: Nicholas Paul Manning Guillermo Perry Project Team Leader: Kathrin A. Plangemann Luis José Mejía ICR Team Leader: Kathrin A. Plangemann Margarita Andrade ICR Primary Authors: Magali Junowicz Maria Cecilia Zanetta F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of the project is to urgently assist the Government of Argentina to contain the disruption in the country's social and economic infrastructure that would be caused by the failure of critical central government systems to process dates properly after December 31, 1999. Revised Project Development Objectives (as approved by original approving authority) First Amendment (June 27, 2000) A new PDO is included: "to assist the Borrower in designing a program to modernize the public sector in Argentina, both at the national and provincial levels". Second Amendment (July 3, 2001) The new PDO is (a) to assist the Borrower, on an urgent basis, to prevent or minimize the disruption in the Borrower's social and economic infrastructure that would be caused by the failure of critical central government systems to process data properly after December 31, 1999 due to the Year 2000 (Y2K) problem; (b) to assist the Borrower in designing and implementing a program to modernize the non- financial public sector in Argentina at the federal level; and (c) to strengthen the institutional capacity at the Borrower's provincial level. Third Amendment (December 14, 2005) The objective of the Project is to implement the Borrower's strategy to strengthen public sector management tools to improve transparency, and civil society participation as well as increase the efficiency and quality of management in selected areas of public services. (a) PDO Indicator(s) from Program Documents Original Target Actual Value Indicator Baseline Value Values Formally Revised Achieved at (from Approval Target Values Completion or Documents) Target Years Original Key Performance Indicators Indicator 1: The number of identified critical functions able to continue operations with minimum disruption through June 30, 2001 as a result of the proposed remediation. Identified systems 127 action plans for Value and critical functions Y2K prevention were quantitative or No baseline defined have been corrected implemented and qualitative) or rescued before monitored. March 2000 Date achieved 11/24/1998 03/31/2000 03/31/2000 Comments Achieved: The disruptions in computer systems were minimal and Argentina was not (incl. % affected by the Y2K threat. It is difficult, however, to establish a clear cause-effect ii achievement) relationship between the actions financed under the operation and Argentina's smooth Y2K transition. Key Performance Indicators Incorporated under the First & Second Amendments Note: Three Key Performance Indicators (i.e. Indicators 5, 6, 7) that were introduced under the Second Amendment were maintained until the end of the project. Indicator 2: Tax revenue increased by 0.25 percent of GDP annually in 2002, 2003, and 2004 over year 2000 baseline. Value 13.4% of GDP in 13.65% in 2002 quantitative or 13.8% in 2003 11.49% in 2002 qualitative) 2000 14.05% in 2004 13.93% in 2003 17.26% in 2004 Date achieved 2000 2002, 2003, 2004 2002, 2003, 2004 Achieved from 2003 onward: The impact of the operation, however, was only indirect. Aside from the management tools implemented under this operation, improved tax Comments collections during 2003 and 2004 are the result of other key factors: i) Argentina's post- (incl. % crisis economic recovery; ii) AFIP became an autonomous institution (ente autárquico) in achievement) 2002; iii) new legislation was passed in 2003 providing for improved mechanisms to reduce tax non-compliance, including steeper sanctions; and iv) the new AFIP authorities implemented a swift modernization plan starting in 2002. Indicator 3: Average period between retirement and receipt of social security payments reduced by 50 percent by end 2003 Value 80 days for public 40 days for public 63 days for public quantitative or system and 225 days system and 122 days system and 91 days qualitative) for the private option for the private option for the private option Date achieved 2001 2003 2005 Partially Achieved. Although this target was partially achieved (i.e. just for the private Comments option in 2005, two years after the original target), ANSES improved its service delivery (incl. % substantially from 2002 onward. The improvement, however, was the result of a swift achievement) modernization program implemented by ANSES authorities from 2002 onward with direct Bank's support under the ANSES TAL. The management tools supported under this operation were inputs in the agency's own reform efforts. Indicator 4: Education Ministry restructured by the end of 2002. Although Education Value Education Ministry in Ministry was formally quantitative or need of substantial Education Ministry restructured through qualitative) reform restructured Decree 357/2002, no significant actual progress was made Date achieved 12/14/2001 12/31/2003 2005 Comments (incl. % Not Achieved: No substantial progress was made in the restructuring of the Education achievement) Ministry. Key Performance Indicators under Third Amendment 1 Indicator 5: Personnel register covering all central government employees functioning by mid-2003. Census of 100% of Census was the National Public cancelled Register covering all Administration Value No personnel register central government (NPA) civil servants Development of quantitative or for public employees employees SIREPEVA (Registry qualitative) in the central Register for of NPA Personnel), administration functioning by the endCentral of 2003 NPA Personnel in with 26,000 files operation, with 100% incorporated into the of NPA civil servants registry (over 20% of incorporated civilian employees in 1 While the Third Amendment presented a full-fledged set of intermediate output indicators for the various components, some of the Key Performance Indicators were not operationalized, for which they were left open to multiple interpretations. In addition, no baselines or targets were defined at the time for any of the Key Performance Indicators; thus, it cannot be clearly determined whether the outcome was achieved or not. The assessment of achievement presented above reflects the progress made in achieving the intermediate output targets under the various components. iii the NPA) Date achieved 12/14/2001 12/31/2003 12/31/2006 12/31/2007 Partially Achieved: A registry for SINAPA2 employees, representing over 20 percent of Comments civilian employees within the national administration, has been implemented. It is (incl. % regularly updated and made available on the intranet for access by public officials. Under achievement) the Third Amendment, the project planned to finance a census of NPA employees, which was later cancelled (as agreed by the Bank and the Government). Indicator 6: New procurement system functioning by mid-2003. SECOP3 (electronic procurement system) Value No integrated The new procurement The new procurement implemented for quantitative or system is in operation system is in operation purchases up to qualitative) procurement system throughout the NPA throughout the NPA AR$10,000 (US$ 3,200) in 4 agencies (8 procurement units). Date achieved 12/14/2001 12/31/2003 12/31/2007 12/31/2007 Partially Achieved: Delays in the enactments of norms and regulations have Comments substantially delayed the implementation of the electronic procurement system. SECOP (incl. % has been launched for purchases below US$3,200 and is now being piloted in four achievement) agencies (representing 5% of the central administration). Its gradual expansion is expected, both in terms of the procurement amount and the number of agencies. Indicator 7: Assessments of internal and external performances and the users' perception indicate a substantial improvement of public management and service delivery in selected areas. At least 15 agencies operating at levels of performance agreed 50 agencies 50 agencies participate in CCP participate in CCP Value No mechanism for with Chief of Cabinet quantitative or systematically Office under Annual 80% of user surveys 80% of user surveys qualitative) measuring Performance performance in place Agreements (APAs) in CCP agencies in CCP agencies and Citizens' Charter show improved show improved Program (CCP) by services services 2003 Date achieved 12/14/2001 12/31/2003 12/31/2007 12/31/2007 Comments Achieved: The Citizens' Charter Program has been adopted as an important (incl. % management tool in 50 key service-delivery institutions, including ANSES, which achievement) represent 90 percent of the NPA agencies that have interactions with citizens. Indicator 8: Access to information and reporting on operation in selected areas is substantially improved. Systems and Control Panel for Value No system to monitor methodologies are public programs quantitative or and asses public implemented and 5 developed and qualitative) policies public policies with relevant social impact implemented in over are assessed 5 institutions Date achieved 12/14/2005 12/31/2007 12/31/2007 Comments Partially Achieved: Although output targets were largely achieved, actual improvements (incl. % in terms of access to information and reporting based on the implementation of new M&E achievement) systems, incl. the SIG, have been modest, in part because they still are in the early stages of implementation. Indicator 9: The use of e-government tools is expanding throughout the NPA. Guide for procedures Procedural guide, Value on the single portal with information on quantitative or No baseline identified including 10 relevant more than 750 qualitative) administrative procedures and processes online processing of 2 SINAPA, the National System of Administrative Professionals, is the most important human resources regime. SIREPEVA is the Central Civil Servants Registry covering SINAPA employees. 3 SECOP (Sistema Electrónico de Contrataciones Públicas) is Argentina's e-procurement system. iv electronically more than 50 processed. procedures Infrastructure for Digital signature electronic signature in 100% operational. operation Date achieved 12/14/2005 12/31/2007 12/31/2007 Achieved: The government's portal, and the electronic directory of government Comments procedures in particular, constitute a useful tool for citizens, facilitating their access to (incl. % services. Likewise, the enabling environment (legal, institutional, and electronic achievement) infrastructure) for the digital signature is now largely in place. Over 3,700 personal certificates have been already granted for public sector employees. Indicator 10: Common consistent processes in place for registering people, legal entities and assets. 16 agencies use Value Baseline was not Target was not common processes to quantitative or identify entities and qualitative) defined defined assets. Date achieved 12/14/2005 12/31/2007 12/31/2007 Comments Undetermined: SINTyS and ONTI have recently issued information-exchange standards (incl. % for 30 commonly-used data types, which are expected to soon be mandatory for all achievement) national agencies. Since no target was specified and there is no direct relationship with other output targets, it is difficult to determine the actual level of achievement. Indicator 11: Availability of information on family relationships. Value Baseline was not Target was not 9% of the population quantitative or with data on family qualitative) defined defined relationships Date achieved 12/14/2005 12/31/2007 12/31/2007 Comments Achieved: Information on family relationships is now available for 9% of the population. (incl. % Although no target was specified, the achievement in the digitalization of civil registries, achievement) which amply exceeds its target, indicates that this indicator was met. Indicator 12: People and legal entities identified with a single, unique key. There are 90,000 Value Baseline was not Target was not individuals and legal quantitative or entities identified with qualitative) defined defined a single tax ID number (CUIT). Date achieved 12/14/2005 12/31/2007 12/31/2007 Comments Achieved: The number of individuals and legal entities identified with a single tax ID (incl. % number (CUIT) has increased from 3,000 to over 90,000 during 2006 and 2007 (amply achievement) exceeding the original target of 7,000). Indicator13: Availability of information for eligibility for social services and fiscal obligations. Key social and fiscal information is increasingly available in electronic form, Value incl. family quantitative or Baseline not defined Target not defined relationships, vital qualitative) facts, student population, registration of deeds, and registration of legal persons. Date achieved 12/14/2005 12/31/2007 12/31/2007 Partially Achieved: Availability of information in electronic form has increased or Comments exceeded targets in the case of vital facts (civil registries), population without health (incl. % insurance coverage, and securities (National Securities Commission - Comisión Nacional achievement) de Valores). It has increased at levels below the corresponding targets for student enrolment, real estate ownership, and membership and/or ownership of legal entities (corporations and non-government organizations). v (b) Intermediate Outcome Indicator(s) from Program Documents Original Target Formally Actual Value Indicator Baseline Value Values (from Achieved at approval Revised Target Completion or Target documents) Values Years Indicator 1 : Number of provinces with ongoing digitalization of civil registries. Value quantitative or 0 4 13 qualitative) Date achieved 12/14/2005 12/31/2007 12/31/2007 Achieved: The digitalization of civil registries has contributed toward enhancing the quality of Comments information on vital facts for the population (i.e. birth, marriage, divorce, children, and death), (incl. % which is not only used for the accurate identification of individuals per se but also for achievement) identification of their family relationships, which often constitute the basis for the granting of social benefits. Indicator 2: Percentage of the student population that is properly identified. Value quantitative or 12% 55% 43% qualitative) Date achieved 12/14/2005 12/31/2007 12/31/2007 Partially Achieved: SINTyS has provided support to the Ministry of Science and Technology in its efforts to develop computerized information systems on the student population, the so- Comments called Single Student File (Legajo Único de Alumnos ­ LUA), within each provincial (incl. % jurisdiction, thus filling a serious void regarding the identification of minors (i.e., less than 18 achievement) years of age) and their educational history. Likewise, SINTyS data is used by the CNCPS as an input in the design of social programs. So far, LUA systems have been already developed in 14 provinces, resulting in the registry of more than 4 million students. Indicator 3 : Percentage of the population without health insurance that is properly identified. Value quantitative or 20% 95% 99% qualitative) Date achieved 12/14/2005 12/31/2007 12/31/2007 Comments Achieved: By contributing to the identification of health coverage, SINTyS has contributed to (incl. % the identification of individuals with double coverage s well as the formulation of social achievement) programs expanding health coverage among those who lack it. Indicator 4: Percentage of real estate properties with properly identified owners Value quantitative or 28% 65% 61% qualitative) Date achieved 12/14/2005 12/31/2007 12/31/2007 Partially Achieved: The adoption of modern technologies in the provincial property registries is key not only for improving the functioning of the registries themselves but also for Comments enhancing their linkages with the cadastre and tax administration systems, which are vital for (incl. % property tax collection. So far, efforts to "virtually consolidate" property registries have achievement) focused on 10 provinces. Deed and ownership information (i.e. deed registration, proprietor, and inhibitions) is currently available in electronic form for approximately 60 percent of all residential properties in the country (based on the 2001 census). Indicator 5 : Percentage of juridical entities with identified members Value quantitative or 10% 45% 41% qualitative) Date achieved 12/14/2005 12/31/2007 12/31/2007 Partially Achieved: SINTyS has provided support to provincial registries of juridical persons Comments (e.g. corporations, limited liability companies, cooperatives, etc.) in their efforts to make their (incl. % data available in electronic form. As a result of the "virtual consolidation" of these registries, it achievement) is now possible to identify legal persons in an accurate and timely manner as well as have access to key information regarding their operation, such as their constitution, dissolution, mergers, and registry of authorities. vi G. Ratings of Project Performance in ISRs No. Date ISR Actual Disbursements Archived DO IP (USD millions) 1 12/22/1998 Satisfactory Satisfactory 0.00 2 06/30/1999 Satisfactory Satisfactory 0.00 3 12/21/1999 Unsatisfactory Unsatisfactory 2.85 4 06/23/2000 Satisfactory Satisfactory 2.85 5 12/20/2000 Satisfactory Satisfactory 3.86 6 06/21/2001 Satisfactory Satisfactory 4.44 7 12/11/2001 Satisfactory Satisfactory 5.71 8 06/28/2002 Unsatisfactory Unsatisfactory 5.71 9 12/20/2002 Unsatisfactory Unsatisfactory 6.48 10 06/25/2003 Unsatisfactory Unsatisfactory 6.84 11 12/22/2003 Unsatisfactory Unsatisfactory 7.25 12 06/21/2004 Unsatisfactory Satisfactory 9.92 13 06/22/2004 Unsatisfactory Satisfactory 9.92 14 12/23/2004 Unsatisfactory Satisfactory 10.22 15 05/05/2005 Moderately Unsatisfactory Moderately Satisfactory 12.13 16 12/28/2005 Satisfactory Satisfactory 14.77 17 01/29/2007 Satisfactory Satisfactory 24.18 18 08/01/2007 Satisfactory Satisfactory 27.13 H. Restructuring (if any) ISR Ratings at Amount Restructuring Board Approved Restructuring Disbursed at Reason for Restructuring & Date(s) PDO Change Restructuring Key Changes Made DO IP (in USD million) Reasons for Restructuring: · Y2K-related actions no longer needed; over US$27 million remain unused. · ICT assessment revealed PDO2 is added: deficiencies in public sector Assist the Borrower management tools. in designing a · Incoming de la Rua administration program to places high priority on public sector 06/27/2000 modernize the S S 2.5 reform. public sector in Key Changes Made: Argentina, both at · PDO is modified and a new the national and component is added to support the provincial levels. design a State Modernization Strategy. · The use of up to US$1.2 million is authorized for this purpose. · A Second Amendment subject to Board review is anticipated once the program is designed. PDO2 is modified: Reasons for Restructuring: Assist the Borrower · A new State Modernization Program in designing and has been prepared. implementing a · As envisaged under the First 07/03/2001 program to S S 3.7 Amendment, the newly developed modernize the non- program and the related changes in financial public the project's PDOs, structure and sector in Argentina scope need to be submitted to the at the federal level; Board for approval. vii and Key Changes Made: PDO3 is added: · PDOs, key performance indicators, Strengthen the and components are changed to institutional capacity support the implementation of the at the Borrower's at new State Modernization Strategy. the provincial level. · Authorization is given for the remaining uncommitted project funds (US$26.6 million) to be used for this purpose. · Project name is changed. · Closing date is extended. New PDO replaces Reasons for Restructuring: previous ones: · Adapt project structure to the To implement the implementation strategy followed in Borrower's strategy the post-crisis period and formally to strengthen public validate key priorities; sector management · Opportunity to provide funding for tools to improve the continuing implementation of transparency, and SINTyS, thus overcoming financing 12/14/2005 civil society MU MS 12.1 bottleneck participation as well Key Changes Made: as increase the · PDOs, key performance indicators, efficiency and and components are changed quality of accordingly. management in · Authorization is given for US$8 selected areas of million of project funds to be used public services. for supporting initial steps of SINTyS' Phase II ­ Expansion. Note: Disbursements at the time of restructuring are based on the amounts reported in the supporting Memorandums to the Presidents. Discrepancies with disbursements listed on Table G might arise from funds that had been transferred to the project's Special Account but that were not actually committed. I. Disbursement Profile viii 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal In the early 1990s, Argentina undertook a comprehensive program of structural adjustment and public sector reform, breaking with decades of interventionist economic and import substitution policies which had resulted in stagnation, hyper-inflation, and an inefficient and non-transparent public sector. Major steps were taken to significantly reduce the size of the public sector and to adjust its role in the economy, including a massive privatization of public enterprises, market deregulation, decentralization of responsibility for service delivery to provincial governments, downsizing of the public sector labor force, and the development of key management tools at the national level, including financial management, auditing and internal controls. In addition, considerable investments in information and communication technologies (ICTs) were made in key government agencies, such as the tax and customs services, the central bank, and the pension administration. As a result, Argentina's public sector became increasingly reliant on computer systems, with most administrative and service provision functions depending on information systems for their regular operation, for example in tax collection, pension administration, banking regulation and supervision, public sector payrolls and the operation of water, energy, telecommunications, train and other public services among many others. The high reliance on computer systems generated serious concerns in Argentina and elsewhere about the capacity of the software and chips used in computerized systems to properly handle dates after December 31, 1999--the so-called "Y2K problem". Although the magnitude of the potential threat was difficult to asses, it was considered to be potentially severe. The Government of Argentina (GoA) adopted a proactive approach to review and reprogram affected systems. Given the urgency of the task, the Government requested the Bank's support to contain the potential disruption that could affect the country's social and economic infrastructure. Argentina's deteriorating macroeconomic conditions made it particularly important to avert potential disruptions in economic growth and social order that could result from Y2K-related systemic problems and failures. Faced with an external environment characterized by high international interest rates, low commodity prices, adverse realignment of other currencies, and a declining confidence and limited access to international financial markets, the country's economic growth had dropped sharply between 1997 and 1998. Moreover, the pace and intensity of economic reform had waned during the latter part of the 1990s, resulting in a noticeable deterioration of the fiscal accounts. After almost a decade under the leadership of President Carlos Menem, presidential elections were scheduled for 1999, generating uncertainty in the political arena. In response to the GoA's request, the Bank prepared the Year 2000 (Y2K) Technical Assistance Loan, which was approved on December 17, 1998 and became effective on July 30, 1999. With US$30.3 million in Bank financing, it supported an overall US$43.3 million project (including counterpart funds) that sought to contain the disruption in the country's social and economic infrastructure that would have been caused by the failure of critical central government systems to transition into the new millennium. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The original Project Development Objective was to assist the Government of Argentina (GoA) to urgently contain the disruption in the country's social and economic infrastructure that would be caused by the failure of critical central government systems to process dates properly after December 31, 1999. 90 1 The key performance indicators were: · The estimate of the economic and social damage avoided; and · The number of identified critical functions able to continue operations with minimal disruption through June 2001 as a result of the proposed remediation. 1.3 Revised PDO (as approved by original approving authority) Key Indicators, and reasons/justification A. First Amendment (June 27, 2000): The Board of Executive Directors approved on a no- objections basis an Amendment to the loan agreement authorizing the use of up to $1.2 million of the uncommitted loan resources to support the design of a program aimed at modernizing Argentina's public sector. This amendment was approved with the understanding that Board approval would be sought for a Second Amendment to reprogram the remaining loan proceeds according to the newly designed state modernization strategy. No closing date extensions were envisaged at that point. Revised PDO: An additional PDO (PDO2) was added "to assist the Borrower in designing a program to modernize the public sector in Argentina, both at the national and provincial levels." Key Performance Indicators: These were not amended despite the addition of the new PDO. Reasons and Justification: The reasons and justification for such amendment included: Roughly $27.8 million remained uncommitted once the Y2K transition was completed without any significant disruptions. An unanticipated result of the Y2K-related actions was the identification of serious problems in public sector administration (including human resources, financial management, and information technology) leading to poor service delivery and lack of transparency. The recently inaugurated administration of President Fernando de la Rua targeted state modernization as a critical national priority. A decree issued on January 17, 2000 created the State Modernization Secretariat under the Vice President of Argentina, highlighting the high priority being given to this initiative. The GoA requested Bank assistance for the design and implementation of a comprehensive state modernization strategy. The launch of a public sector reform effort early in the administration's tenure was deemed important by the Bank, given its high relevance to overall structural reform and the possibility to take advantage of the political window of opportunity provided to the new national administration. Such a public sector reform program could also support the attainment of targets in the Government's IMF-supported economic program. The project's restructuring was considered a superior alternative vis-à-vis the preparation of a new operation given available board slots and the fact that Argentina's internal administrative procedures for the approval of new operations were time-consuming, which could have resulted in costly delays and postpone access to needed resources. To assure the highest project quality the project's restructuring was conceived in two stages to be reviewed by the Board: the first one authorizing preparation of the new public sector reform strategy (i.e. First Amendment) and the second one authorizing the implementation of such strategy, provided that the fully prepared component and consequent amendment of the loan agreement were deemed satisfactory (i.e. Second Amendment). This two-stage approached was aimed at providing the Borrower and the Bank--including Board members--ample opportunity to consider the proposed use of loan funds. B. Second Amendment (July 3, 2001): The Board approved on a no-objection basis a Second Amendment authorizing the use of the remaining uncommitted loan proceeds (US$26.6 million) to support the implementation of the comprehensive public sector reform program designed under the First Amendment. In addition, the name of the project was changed to "State Modernization Project" 2 to reflect the revised focus of the project. The closing date was extended from December 31, 2001 to December 31, 2003.4 Revised PDOs: PDO2 was modified and an additional PDO (PDO3) was included. The amended PDOs read as follows: (i) to assist the Borrower on an urgent basis to prevent or minimize the disruption in the Borrower's social and economic infrastructure that would be caused by the failure of critical central government systems to process data properly after December 31, 1999 due to the Y2K Problem; (ii) to assist the Borrower in designing and implementing a program to modernize the non-financial public sector in Argentina both at the national and provincial levels; and (iii) to strengthen the institutional capacity at the Borrower's provincial level. Key Performance Indicators: The following Impact/Outcome Indicators were identified to reflect the impact of the operation with respect to the revised PDOs: · Tax revenue increased by 0.25 percent of GDP annually in 2002, 2003, and 2004 over year 2000 baseline; · Average period between retirement and receipt of social security payments reduced by 50 percent by the end of 2003; · Education Ministry restructured by the end of 2002; · New procurement system functioning by mid-2003; · Personnel register covering all central government employees functioning by mid-2003; · At least 15 agencies operating by 2003 at levels of performance agreed with Chief of Cabinet Office under Annual Performance Agreements and Citizens' Charter Program. Reasons and Justification: In accordance with the two-stage reprogramming strategy outlined and approved by the Board under the First Amendment, the Second Amendment reprogrammed the project to support the implementation of a public sector modernization program that was reportedly a high priority for the GoA. Given the importance and complexity of the reprogramming, an annex was prepared in the format of a regular Project Appraisal Document (PAD) to facilitate the review of the new state modernization components by Bank management and the Board. C. Third Amendment (December 14, 2005): The Board approved on a no-objections basis a Third Amendment that revised the project's public sector modernization strategy to reflect the more incremental approach adopted by the new national authorities after the 2001-2002 crisis. In addition, the Third Amendment authorized the reallocation of US$8 million to support the continuing implementation of the Social and Fiscal National Identification System (SINTyS) program (see Box 1 for an overview of SINTyS). The remaining uncommitted funds (US$1 million) remained unallocated at the Government's request. Box 1. Overview of Argentina's Social and Fiscal National Identification System (SINTyS) Argentina's Social and Fiscal National Identification System (Sistema de Identificación Nacional Tributario y Social - SINTyS) was created in 1998 to foster the systematic exchange of fiscal and social information across databases at the national, provincial and municipal levels of government. Through the development of a shared information exchange network, SINTyS will support the real-time, online exchange and crosschecking of fiscal and social information between the databases of individual agencies. The development of SINTyS received the Bank's support under an Adaptable Program Loan (APL No. 4459-AR), which was approved in April 1999. The implementation of SINTyS was conceived in three stages: Demonstration, Expansion, and Consolidation. Phase I ­ Demonstration effectively demonstrated the overall feasibility of the SINTyS' concept and the potential transparency, efficiency and financial gains resulting from the systematic 4 Closing dates were subsequently extended three additional times, to December 2004, December 2006, and December 2007, respectively. 3 exchange of information across government agencies. This phase was supported under Loan 4459-AR (US$10 million), which closed on 31 December 2005. Phase II ­ Expansion envisions SINTyS' further expansion as additional government agencies at the national and sub-national level are incorporated into the system. Finally, Phase III ­ Consolidation will focus on ensuring SINTyS' permanent institutionalization within Argentina's public sector. SINTyS is guided by the following operating principles: i) every institution owns its information, and is responsible for its life-cycle management and for defining the access rights to its information; ii) SINTyS is a broker of information in that it provides the normative, organizational framework for the stewardship of the methods and mechanisms for information interchange among the participating agencies; and iii) SINTyS will ensure that participating agencies regulate access to information. Revised PDOs: Previous PDOs were replaced by a single, overarching PDO: to implement the Borrower's strategy to strengthen public sector management tools to improve transparency and civil society participation as well as increase the efficiency and quality of management in selected areas of public services. Key Performance indicators: A new set of Impact/Outcome Indicators was defined under the Third Amendment (see Annexes 1 and 1-A, Implementation Letter, Third Amendment to the Loan Agreement): · Assessments of internal and external performances and the users' perception indicate a substantial improvement of public management and service delivery in selected areas. · Access to information and reporting on operation in selected areas is substantially improved. · The use of e-government tools is expanding throughout the national public administration (NPA). · The new procurement system is operating throughout the NPA. · Improvements of human resources management are in operation throughout the NPA. · Common consistent processes in place for registering people, legal entities and assets. · People and legal entities identified with a single, unique key. · Availability of information on family relationships. · Availability of information for eligibility for social services and fiscal obligations. Reasons and Justification: The rationale underlying this amendment was as follows: Of the US$30.3 million of the original loan proceeds, only US$10.2 million had been disbursed by end 2004, resulting in roughly $20.1 million uncommitted loan proceeds. Slow disbursements and poor project performance between 2002 and 2004 were attributed mainly to the impact of the 2001-2002 crisis rather than to lack of interest in public sector modernization. In fact, the new authorities had manifested their interest in public sector modernization and had managed to make modest progress in the implementation of some project components despite the severe fiscal constraints that ensued in the aftermath of the 2001-2002 crisis. The authorities, however, privileged an incremental strategy focusing on the modernization of selected agencies and key management tools rather than the comprehensive reform program envisioned under the Second Amendment. Due to its reduced scope and the impact generated by the devaluation of the Argentine Peso, the implementation costs of this incremental modernization strategy were estimated at US$11.1 million, resulting in roughly US$9 million uncommitted loan proceeds. The limited resources under the 2004-2005 CAS envelope, including under the Bank's internal work program agreement, resulted in strong competition for IBRD financing among alternative projects. Thus, rather than canceling the remaining US$9 million, the Bank team opted for introducing a new component to support the continuing implementation of the SINTyS program, which was consistent with the revised PDO of strengthening public sector management tools. The first stage in the implementation of SINTyS (Phase I ­ Demonstration) had been 4 successfully implemented under an APL operation (Loan 4459-AR). While the Bank and GoA had placed a high priority on the implementation of the Phase II ­ Expansion, resources were not available to finance its implementation, either through government financing or under the US$2 billion CAS envelope, which was fully committed. Thus, including the implementation of the initial stages of Phase II of SINTyS as a new component under Loan 4423-AR served to overcome the financial bottleneck existing at the time. 1.4 Main Beneficiaries The project's target beneficiaries at appraisal were the citizens receiving benefits from selected national agencies as well as civil servants and other government employees. As secondary beneficiaries the project identified the private sector and the sub-national public administrations. These beneficiaries remained largely unchanged under the various amendments. 1.5 & 1.6 Original and Revised Components Table 1. Project Components Project as Originally Approved (December 17, 1998) A - Support Activities (US$ 6.9 million):5 This component was aimed at assessing the dimension and potential impact of the Y2K problem including: (i) risk assessment of entities and systems; (ii) development of an information campaign to alert public and private sector entities of the Y2K problem; (iii) analysis of the economic impact of non-Y2K-compliance as an input in the prioritization of agencies to be targeted; and (iv) development of common administrative systems for economies of scale and simplicity. B - Remediation and Rescue (US$ 19.5 million): This component supported the implementation of remedial actions identified under Component A, including: providing technical assistance to agencies carrying out diagnosis studies and implementation plans, as well as in the development of equipment specifications, readiness and training plans, monitoring indicators, and contingency plans. C - Project Administration (US$ 2.1 million): This component supported project administration, implementation and supervision activities, including: financial management, procurement, and M&E, among others. First Amendment (June 27, 2000) An additional component was added: D - Modernization of the Public Sector (US$ 1.2 million): It supported the design of a state modernization program with a focus on: (a) systemic reforms; (b) agency-specific reforms; and (c) strategic reforms including a national performance evaluation system and support to the modernization of provincial governments. Second Amendment (July 3, 2001) Project components were revised as follows: 6 A - Support Activities (US$2.2 million): It included all Y2K activities that were completed under the original Components A and B. B - Project Administration(US$1.8 million) C - Modernization of the Public Sector (US$1.2 million): It corresponded to Component D introduced under the First Amendment D - Streamlining the Macro-Structure of the National Government (US$0.5 million): It supported the restructuring of the non-financial national public sector to achieve efficiency gains. E - Establishment of a New Public Management Model (US$10.5 million): It supported the reform of key government-wide systems, including: i) management by results; ii) integrated human resources management system; iii) civil service training; iv) e-government; v) streamlining of administrative procedures; and vi) public procurement system. F - Reform of Selected Public Agencies and Decentralized Entities (US$11.6 million): It supported the pilot 5 Amounts refer to IBRD financing only and do not include counterpart funds. 6 An additional US$1 million were allocated to price contingencies, resulting in a total amount of US$30.3 million. 5 implementation of the new management model in three key agencies (i.e. ANSES, AFIP and the Ministry of Education), consolidating the systemic reforms supported under Component E. G - Promotion of Provincial Government Reform (US$1.5 million): It supported institutional capacity building at the provincial level through the Federal Council on Public Administration (Consejo Federal de la Función Pública - CFFP), Third Amendment (December 14, 2005) Project components were revised as follows: D - Streamlining the Macro-Structure of the National Government: This component was cancelled, as the new administration's strategy toward public sector modernization focused on an incremental approach rather than on the comprehensive approach that was reflected by the Second Amendment. H - Social and Fiscal National Identification System (SINTyS) ­ Phase II (US$ 8 million): This component was added to support the first stages of implementation of SINTyS' Phase II (Expansion), aimed at consolidating the achievements made during Phase I (Demonstration) as well as strengthening formal exchange mechanisms and expanding its coverage, mainly at the provincial level. 1.7 Other significant changes As detailed earlier, the project changed dramatically over its life span. Through three amendments to the original loan agreement, all of which were approved by the Board of Directors, changes were introduced to the project's PDOs and its title, individual components were both added and eliminated, loan resources were reallocated to support changing priorities, and even self-standing operations (i.e. SINTyS) were merged into this operation. Four closing date extensions resulted in an overall project life span of over nine years, from the original closing date of December 2001 to December 2003, December 2004, December 2006 and December 2007, respectively (see Table 3 ­ Timeline of Events). 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Quality at Entry (QAE): Moderately Unsatisfactory. This ICR considers the operation's overall QAE rating to be Moderately Unsatisfactory. This rating summarizes the QAE not only of the original project design but that of each of the three amendments as well. Individual ratings for quality at entry are discussed below: Original Project Design: Moderately Satisfactory. The project provided support to a problem that, at the time, was considered to be relevant and deserving urgent attention. The Bank reacted quickly, preparing an operation in only five months (the first Bank mission took place in May 1998 and negotiations were conducted in November of the same year). As shown on Table 2, the proposed operation was also consistent with the 1997-2000 CAS. The Bank team designed an intervention strategy that effectively incorporated key elements of the strategies that were being developed by the most advanced economies, including: (i) the need to identify and prioritize critical systems; (ii) the decentralized elaboration of diagnoses; (iii) a phased approach to mitigating possible damages; (iv) the development of awareness campaigns to promote precautionary measures; and (v) the need to establish contingency provisions, as an up-front assessment of the problem dimension was almost impossible. However, the unpredictable, intangible nature of the Y2K problem resulted in: i) an overly flexible approach; ii) a weak M&E framework; and iii) the over-dimensioning of the operation. In addition, substantial risks were largely underestimated, such as the very limited authority of the Project Implementation Unit and the limitations of the proposed decentralized implementation model in which individual agencies were responsible for the actual implementation of preventive and remedial measures. 6 Table 2. Consistency of CAS Objectives with Original and Amended PDOs CAS CAS Objectives Consistency of PDOs with CAS Objectives (i) To enhance social development, including poverty alleviation and human resource By addressing potential Y2K problems, the development; operation in its Original Design directly (ii) To improve the performance and institutional supported the CAS objective of improving the capacity of government, particularly sub-national performance and institutional capacity of governments, to deliver key social, government to deliver services (i.e. 1997-2000 1997- infrastructure, and environmental services; and CAS Objective ii). 2000 (iii) To consolidate successful structural reforms, including reforms in public finance, labor By supporting a newly opened window of markets and the financial sector to ensure opportunity for state modernization efforts, the successful implementation of the assistance First Amendment directly supported the CAS program, and enhance governance through objective of improving the performance and institution building. institutional capacity of government (i.e. 1997- 2000 CAS Objective ii). (i) To enhance social development; including poverty alleviation and human resource By supporting state modernization efforts, the 2001- development; Second Amendment directly supported the 2004 (ii) To improve the performance of the state, CAS objective of improving the performance of particularly at the sub-national level; and the state (i.e. 2001-2004 CAS Objective ii). (iii) To consolidate structural reforms. By providing continuing support for modernization efforts, with an added emphasis on promoting the systematic exchange of 2004- (i) Sustained economic growth with equity; information between agencies at the three 2005 (ii) Social inclusion: and (iii) Governance. levels of government, the Third Amendment directly supported the CAS objective of enhancing governance (i.e. 2004-2005 CAS Objective iii). First Amendment: Moderately Satisfactory. As shown on Table 2, by supporting a newly opened window of opportunity for state modernization efforts, the First Amendment directly supported the 1997-2000 CAS objective of improving the performance and institutional capacity of government (CAS Objective ii). The strategy to amend an existing operation rather than preparing a new one allowed the Bank to react swiftly to capitalize on a newly open window of opportunity to promote public sector reform, which, in turn, was expected to help the GoA attain the targets under the economic program agreed upon with the IMF. It also gave the Bank the opportunity to provide support to the incoming de la Rua administration in its efforts to address deteriorating macroeconomic conditions. The two-stage reprogramming strategy put forward under the First Amendment provided the opportunity for the Bank to assess the soundness of the modernization program to be prepared although, of course, it resulted in less scrutiny and quality control that normal project identification procedures would have produced. Second Amendment: Unsatisfactory. The state modernization program presented under the Second Amendment was the result of full-fledged project preparation efforts. Given the importance and complexity of the reprogramming that was being proposed under this amendment--which was indeed equivalent to the preparation of a new operation--an annex was prepared in the format of a regular Project Appraisal Document (PAD). This annex reflected an internally consistent technical design that supported a comprehensive state modernization program through well-developed project components and activities and results framework. Likewise, as shown on Table 2, by supporting state modernization efforts, the proposed amendment directly supported the 2001-2004 CAS objective of improving the performance of the state (CAS Objective ii). However, the Bank team failed to properly assess two key risks: limited political support and the impact of unfavorable macroeconomic conditions, which made the implementation of such an ambitious and comprehensive state modernization program highly unlikely at that time. In this regard, it is 7 important to note that Argentina's Vice President, who was the political champion behind the state reform agenda, resigned in October 2000, just three months after the First Amendment was introduced. Strong political support was a condition sine qua non for the feasibility of such reform program and, after the departure of its main proponent, the proposed state modernization agenda was doomed to failure regardless of its technical soundness. In addition, macroeconomic and political conditions were deteriorating rapidly, thus creating an environment that was not conducive to the implementation of a comprehensive modernization agenda. This deterioration must have been apparent by July 2000, when the Second Amendment was approved and fully obvious by mid- December, when it was finally signed by the GoA, just days before the country's collapse. Third Amendment: Moderately Satisfactory. By providing continuing support for modernization efforts, with an added emphasis on promoting the systematic exchange of information between agencies at the three levels of government, the Third Amendment directly supported the 2004-2005 CAS objective of enhancing governance (CAS Objective iii). State Modernization Components: As mentioned earlier, this amendment sought to align the operation's formal framework (i.e. PDOs, project components and financial needs) with the state modernization strategy that had guided project implementation--albeit implicitly--from 2003 onward, after the Kirchner administration took office. In response to the new authorities' interest in revitalizing the project, the Bank team had worked closely with the Chief of Cabinet in the evaluation of the strengths, weaknesses and lessons learned under the implementation of the preceding sector modernization strategy and in the development of a revised modernization strategy to reflect the priorities of the new administration. The revised strategy adopted a less ambitious approach, favoring an incremental implementation strategy that focused on the implementation of horizontal reforms to enhance transparency, accountability and service delivery. Also, as discussed below, the overall modernization strategy lacked focus, dispersing resources among an excessively large number of initiatives and government agencies. The Results Framework was modified in line with the newly adopted strategy. However, some of the Key Outcome Indicators were too vague and no baselines or targets were defined at the time of the amendment. While a large number of indicators were identified for each of the components, the emphasis was on outputs and activities. As a result, the overall Result Framework was not conducive to measuring the impact of the operation. SINTyS Component: A thorough effort went into the preparation of Component H, including an assessment of SINTyS' feasibility based on the implementation results of Phase I ­ Demonstration, an assessment of readiness to enter Phase II ­ Expansion, and the design of the implementation strategy of such phase, in particular SINTyS' expansion at the provincial level. Project components and activities were designed to fully support the implementation of Phase II, together with a supporting Results Framework. In addition, a detailed OP was developed for the period 2005-2006. No baselines or targets were defined for the Key Outcome Indicators, which weakened their ability to measure the operations' impact. Although the PDOs of the state modernization program and SINTyS were internally consistent, the addition of Component H was an add-on to the operation. Component H maintained full independence during its implementation, including its own implementation arrangements, an independent Project Coordination Unit under the National Council for Coordination of Social Policies (Consejo Nacional de Políticas Sociales ­ CNPS), as well as a different Bank supervision team. These implementation arrangements were undoubtedly the best alternative, given that the two areas of intervention were self-standing as a result of their history and institutional insertion. Moreover, there was no intention on the part of authorities to merge them into a single umbrella. 8 2.2 Implementation The implementation of this operation offers a good illustration of "marginal incrementalism." 7 Rather than responding to the ideal "rational" model, in which project goals and objectives are clearly defined ex-ante and supported by individual components, a robust monitoring and evaluation (M&E) framework, and a well-defined implementation strategy, this operation was the result of successive adjustments made over time to respond to the changing priorities of the successive administrations and the challenges posed by a particularly difficult implementation environment. In addition, several factors, both within and outside the Government's control, negatively affected project implementation, including a highly unfavorable macroeconomic and political environment, uneven political support, overly ambitious PDOs, and uneven implementation capacity. The situation was reversed after 2003, which allowed for renewed momentum in project implementation as well as for substantial project achievements. Table 3. Timeline of Events for Loan 4423-AR Date Event December 17, 1998 Board Approval July 30, 1999 Effectiveness--six months after originally expected. December 10, 1999 Fernando de la Rua assumes Argentina's Presidency January 1, 2000 Y2K transition takes place without any significant disruption, with minimum use of loan proceeds January 17, 2000 The State Modernization Secretariat is created under the Office of the Vice President, highlighting the high priority give to public sector reform under the new administration June 26, 2000 First Amendment is approved by the Board authorizing the design of state modernization program. September 20, 2000 GoA signs the First Amendment Letter. October. 6, 2000 Vice President "Chacho" Alvarez, champion of the state modernization agenda, resigns July 3, 2001 Second Amendment is approved by the Board authorizing the implementation of newly state modernization program. First extension of closing date from December 31, 2001 to December 31, 2003 December 14, 2001 GoA signs the Second Amendment Letter. December 20, 2001 President Fernando de la Rua resigns December 21, 2001 to January A succession of three different presidents amidst street riots and anti-government 1, 2002 demonstrations January 1, 2002 Eduardo Duhalde temporarily assumes the Presidency May 25, 2003 Néstor Kirchner assumes Argentina's Presidency December 30, 2003 Second extension of closing date from December 31, 2003 to December 31, 2004. December 30, 2004 Third extension of closing date from December 31, 2004 to December 31, 2006. Third Amendment is approved by the Board authorizing the review of the public sector December 14, modernization strategy to reflect the more incremental approach of the new authorities 2005 and the addition of a new component to support the continuing implementation of SINTyS. May 9, 2006 GoA signs the Third Amendment Letter. The delay, in turn, causes delays in the implementation of SINTyS. December 11, 2006 Fourth extension of closing date from December 31, 2006 to December 31, 2007. 7 For a discussion on rational and marginal incrementalism approaches, see, for example, Lindblom, Charles E. (1959), "The Science of "Muddling Through," in Faludi, Andreas (1973) A Reader in Planning Theory, Pergamon Press. 9 Table 3. Timeline of Events for Loan 4423-AR Date Event May 27, 2007 Second State Modernization Project is approved December 10, 2007 Cristina Fernandez de Kirchner assumes Argentina's Presidency December 31, 2007 Project closes, nine years after Board's approval Note: Highlighted rows show dates directly related to the project's implementation, while non-highlighted rows show dates of events indirectly affecting project's implementation. Factors outside the Control of the Government or Implementing Agency Political and macroeconomic instability: While it can be argued whether the country's unstable political and macroeconomic environment in the late 1990s was beyond or subject to the control of the government, it is clear that it was a highly negative factor affecting implementation. Unstable macroeconomic conditions overshadowed other priorities of the politically weak de la Rua administration, such as state modernization. In addition, tight budgetary conditions resulted in reduced allocation of counterpart funds, which slowed down project implementation during 2000 and 2001. The economy finally collapsed in December 2001, unleashing one of the deepest economic, institutional and political crises affecting the country in its recent history. In 2001 and 2002, output collapsed by 20 percent, poverty reached above 57 percent of the population, and unemployment reached 24 percent, with huge job losses in both the formal and informal sectors. Key social indicators, such as infant mortality, also deteriorated substantially for the first time in 30 years. Not surprisingly, the crisis also affected the project, bringing it to a stall for almost two years due to the need to address other urgent priorities, severe shortage of counterpart funds, rapid turnover of senior public officials (the Chief of Cabinet and key staff changed three times in less than six months) and rapid turnover of PIU staff. Factors Generally Subject to Government Control Changing government priorities and uneven political support: During the lifespan of the project, there were significant differences in the prevailing views toward state modernization. The Menem administration (1989-1999) had implemented a drastic public sector reform aimed at reducing the role of the public sector in the economy and downsizing the national government. In this context, the Y2K TAL was aimed at addressing the specific Y2K problem rather than at tackling inefficiencies in the country's ITC systems. Alternatively, the de la Rua administration (1989-2001) adopted a state modernization strategy aimed at reinventing government. Under the political leadership of the Vice President, the new state modernization strategy that was supported under the First and Second Amendments aimed to overhaul Argentina's public sector in a comprehensive manner. Political support for this ambitious state modernization program virtually vanished after the Vice President resigned in protest against a corruption scandal in October 2000. The economic, political and social upheaval that ensued in the aftermath of the country's collapse in December 2001 created an impasse in the modernization efforts until the end of 2003. Although clearly not its top priority vis-à-vis addressing the urgent social needs that had emerged after the crisis, the incoming Kirchner administration (2003-2007) revived the state modernization efforts. While maintaining many of the core lines of action, it significantly scaled down the scope of the previous strategy, focusing on a more incremental approach that prioritized areas where ownership existed and could contribute to generate demonstration effects elsewhere. This revised strategy was formally incorporated in the operation through the Third Amendment.8 8 The recently approved follow-up operation--State Modernization II Project--also maintains the same core lines of action. 10 Delays in political decision-making: Slow political decision-making and cumbersome administrative procedures resulted in extended periods of inactivity and contributed to the slowing down of project execution. For example, in 1999, the lack of authorization from the Chief of Cabinet's Office to disburse loan proceeds impeded the implementation of many rescue and remediation projects (generating a disbursement lag of 84 percent).9 Delays in the enactment of laws and the passage and adoption of decrees, norms and administrative resolutions also slowed down implementation, affecting the timely achievement of key results--this was the case, for instance, in the enactment of the digital signature legislation and the norms and regulations of the E-procurement Law. Likewise, the time that elapsed between the Board's and the GoA's approval of each of the three amendments generated serious obstacles. As an illustration, the Third Amendment was not signed into effectiveness by the GoA for five months after Board approval. This delay prevented SINTYS from setting in motion a $6.0 million international bidding process, which introduced significant delays in the implementation timetable and eventually required extending once again the project's closing date. These delays were, at least partially, the result of insufficient political support from top national authorities. Unfocused state modernization efforts: As mentioned earlier, there was a serious mismatch between the ambitious scope of the state modernization program developed under the de la Rua administration and the political support it mustered, particularly from mid-2000 onward. In addition, the modernization program--and the project itself--suffered from excessive dispersion due to the large number of areas of intervention and participating agencies. As a result, the project supported many highly specific interventions that had only a limited impact and that could not be replicated in other institutions rather than focusing on key horizontal tools, systems and methodologies with a potentially wide impact across many institutions. Some examples of isolated actions are the digitalization efforts in the Ministry of Justice, the design of a physical assets management system under the leadership of the Chief of Cabinet's Office, and the development of the Education Cost Observatories. SINTyS Component: As mentioned earlier, the decision to include the SINTyS program in this project was based on the lack of available financing under the 2004-2005 CAS to support the continuing implementation of SINTyS, which was considered a priority both for the GoA and the Bank. While the decision to include SINTyS in this operation succeeded in overcoming the financial bottleneck, it offered only a partial solution to the Government's needs. Specifically, the delays in preparing, approving and declaring the amendment effective generated important disruptions in the execution of the SINTyS program. In turn, the delays in the implementation of SINTyS also affected negatively the implementation of this operation, by requiring a fourth extension to the closing date. Factors Generally Subject to Implementing Agency Control Uneven implementation capacity: The Borrower's implementation capacity was at times weak, particularly during the initial stages of implementation. Specifically, the original Project Implementation Unit (PIU) and its technical support arm (the so-called Y2K Executing Unit ­ Y2KEU) lacked the necessary authority to effectively implement a project of such innovative and complex nature. The Y2KEU was only responsible for establishing the regulatory framework and technical guidelines to assist national public agencies on Y2K issues. The responsibility for implementing preventive and remedial measures remained with individual government agencies. The weak technical and institutional capacity of many government agencies became a serious bottleneck in project implementation, resulting in an extremely difficult and slow implementation process and an inability to effectively address the needs of individual agencies. 9 PSR Sequence No: 3, Archived on 12/21/1999. 11 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization The design of the operation's M&E system exhibited significant weaknesses for the original project design as well as subsequent amendments. While some of the original shortcomings were overcome during implementation, particularly in relation to the achievement of project outputs and implementation progress, the weaknesses in the operation's M&E design poses additional challenges to the evaluation of the operation's impact. (a) M&E Design: Original Project: As mentioned earlier, the inability to identify at the outset which systems would require adaptation to deal with the Y2K transition imposed serious difficulties to the design of an effective M&E system at appraisal. It was anticipated that each subproject implementation plan would include a set of monitoring indicators to assess impact. First and Second Amendments: The Second Amendment included a fully developed Results Framework that distinguished between outcome and output indicators. However, of the five impact indicators that were proposed, only one (i.e. period between retirement and receipt of first social security payment reduced by 50 percent by 2003) was truly impact-oriented. The remaining ones were more output-oriented and had less capacity to capture actual impact (i.e., Education Ministry restructured by end 2002; procurement system functioning by mid-2003; register for central government employees functioning by mid-2003) or insufficiently isolated the impact of the project (i.e. annual tax increases of 0.25 percent of GDP). Third Amendment: The modification of the state modernization program and the addition of the SINTyS component were supported with a new Results Framework. However, some of the Key Performance Indicators were not clearly identified as needed at the operational level, leaving them open to multiple interpretations. In addition, no baselines or targets were defined at the time for any of the Key Outcome Indicators, making ex-post evaluation more difficult. As in the case of the M&E for the Second Amendment, the M&E system overly emphasized broadly defined outputs (i.e. ten strategic plans being implemented) rather than their impact. (b) M&E Implementation: During implementation, particularly from 2004 onward, M&E was supported by the preparation of detailed operational plans that established specific results for individual project activities as well as progress indicators to monitor project implementation on a semi-annual basis. Information on key project outputs was regularly collected as part of the Bank's supervision efforts, which proved to be very helpful in tracking project progress in each of the areas. Data collection relied heavily on meetings and reports by different counterparts as well as the elaboration of special reports by the PIU, which, in turn, utilized data reported by the different agencies and/or offices. From 2005 onward, particular attention was given to M&E, with intensive discussions between the Bank and the counterparts on a greater results-focus of the loan, the identification and tracking of new indicators, and an enhanced monitoring of each of the areas under the loan, as well as project management. From 2006, this included further M&E and the assessment of the project's progress and impact as part of the preparation activities of the new operation. (c) M&E Utilization: In some cases, the data collected to generate project indicators was not integrated into the operations and management of individual government agencies. In many cases, participating agencies developed spreadsheets to comply with Bank project supervision requirements that were however not sufficiently used in their own decision-making processes. Having identified this weakness, both the Bank team and the PIU were extremely careful in designing the Results and Monitoring framework for the follow-up operation with a greater emphasis on results and a results- culture, focusing on strengthening existing M&E systems and integrating them with the ones of individual government agencies. 12 2.4 Safeguard and Fiduciary Compliance Safeguards: No safeguard policies were triggered by the Project. Financial Management: Audits were conducted every year by Argentina's highest auditing institution, the General Auditing Office (Auditoría General de la Nación - AGN). Auditors' opinions were unqualified for the management of the Special Account throughout the life of the loan. Although some observations were made in relation to the management of the Project's Accounts, they referred mainly to inconsistencies in accounting criteria and did not point to any substantive issues. Financial management performance was rated Satisfactory by the Bank's supervision team. As mentioned earlier, the lack of timely counterpart funds affected project implementation before, during, and after the 2001-2002 crisis. This issue went beyond this particular operation and affected the entire Bank portfolio. While this shortcoming was largely addressed from 2003 onward, the lack of timely counterpart funds was also observed in 2007, when the loan proceeds were used to temporarily finance the local share of project expenditures. In addition, the Borrower failed to submit all the necessary expenditure documentation before the end of the original grace period. Procurement: There were no significant deviations from the Bank's standard procurement procedures throughout the life of the loan. A persistent difficulty, however, was the high reliance on individual consultants, which amounted to more than 400 in June 2005. The large number of individual consultants, which were dispersed across different ministries and agencies, resulted in a large PIU as well as overly complex management and supervision procedures. In 2006, a plan was implemented that reduced the number of individual consultants working in state modernization activities by 40 percent, of which 88 percent were converted into permanent public sector positions. An independent assessment was carried out by an international management consulting firm in 2007 to examine the selection, performance, and supervision of consultants and no irregularities were found (except for a few minor formal areas for improvement). On this basis, for this loan as well as for the follow-up loan, an agreement was reached and a plan developed to improve the selection, performance and supervision of consultants, enhance training and knowledge transfer to government employees, and ensure greater project sustainability. This agreement was later replicated in other Bank loans. Likewise, efforts to reduce the number of individual consultants have been undertaken under SINTyS, including financing an increasingly larger share of individual consultants with counterpart funds. 2.5 Post-completion Operation/Next Phase Two follow-up operations will continue to support the PDO of this operation. Specifically, the State Modernization II Project (Loan No. 7449-AR) was approved in May 2007 and declared effective in February 2008. The State Modernization II Loan provides continuous support to most of the public sector management areas under this loan and has been designed on the basis of its lessons learned. It has received an overall Quality at Entry Assessment rating of Satisfactory by the Quality Assurance Group (QAG).10 The Bank is also currently preparing the second and third phases of SINTyS' APL (Loan No. 4459-AR) to provide support for SINTyS' consolidation and institutionalization. In this regard, it is important to note that in early 2006, the State Modernization Directorate was created for the management of the State Modernization Loan, signaling the heightened importance of the state modernization agenda and an effort towards the institutionalization of the project. Likewise, in December 2007, SINTyS Project Unit was transformed into a National Directorate, signaling the 10 QAG Assessment Date: 09/06/2007. The assessment focused on quality at entry, which was rated as Satisfactory and also focused on the quality of the technical assistance/training design, which was ranked as Highly Satisfactory. 13 importance being assigned to it by national authorities and its increasing insertion within Argentina's public sector. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The project's objectives continue to be fully consistent with the Bank's Country Assistance Strategy in Argentina. Specifically, by supporting the implementation of the GoA's strategy to strengthen public sector management tools to improve transparency and civil society participation as well as increase the efficiency and quality of management in selected areas, the project fully supports the 2006-2008 CAS objective of enhancing governance.11 The modernization efforts supported under this operation also continue to be a top priority of Argentinean authorities, as denoted by their request for continuing Bank assistance under two follow-up operations: the Second State Modernization Project (Loan No. 7449-AR) that was approved in May 2007, and the Second SINTyS Project that has already been negotiated and submitted to the Board for its approval. 3.2. Achievement of Project Development Objectives Prior to tackling the project's assessment, it is important to underscore the difficulties and complexities of evaluating the impact of an operation that has undergone several drastic changes and is, as a result, quite convoluted. The Harmonized Evaluation Criteria for ICR and IEG Evaluations and the new ICR guidelines issued in August 2006 explicitly address the challenge of assessing the outcome of projects with formally revised objectives. In line with these ICR guidelines, the Overall Project Performance for this operation is a weighted average of achievements against both the original and revised project objectives. Specifically, the project's specifics are being assessed against the following PDOs: i) original PDO; ii) the consolidated PDOs of both the First and Second Amendment, as the two amendments are part of the same two-pronged project restructuring strategy; and iii) the PDOs for the Third Amendment. All but one of the components that were introduced under the Second Amendment continued throughout the life of the project. These components are discussed under the Third Amendment, since the corresponding outcomes reflect the changes in the overall modernization strategy that was formally adopted under the Third Amendment.12 Figure 1 illustrates the methodology being utilized for the overall project assessment, showing under which period the various components are being evaluated. It should be highlighted that the complexity of this particular project evaluation is compounded not only by the three amendments, but also by the broad PDOs and the outcome rather than outcomes indicators agreed as well, made even more challenging by the difficulty of assessing project progress in the context of a very difficult operating environment in the country. 11 The 2005-2006 CAS support three main pillars: i) sustained economic growth with equity; ii) social inclusion; and iii) governance (Report No.: 34015-AR, May 4, 2006). 12 It is important to note that, in some cases, specific outcomes were agreed under the 2004-2005 Operational Plan and that substantial implementation progress took place during those years. 14 Figure 1. Methodological Approach for the Assessment of Achievement of Project Development Objectives Components Original PDOs Revised PDOs Observations First & Second Third Amendments1 Amendment Time Period Period I Period II Period III 7/30/1999 to 6/27/2000 to 12/14/2005 to 6/27/2000 12/14/2005 12/31/2007 Original Design A. Support Activities Y2K-related PDOs and components are evaluated only under Period I. B. Remediation & Rescue First & Second Ammendments Evaluated under Period II, as the design of the C. Modernization of Public Sector modernization reform strategy is a product of the 1st Amendment. D. Streamlining of National Evaluted under Period II, as it was added under the 2nd Government Amendment and later cancelled under the 3rd Amendment. Although key framework legislation was approved during Period II, this component is evaluated under Period III, as E. New Public Management achievements reflect the incremental modernization Model strategy that was formally adopted under the 3rd Amendment. Evaluated under Periods II (i.e., reforms in AFIP, ANSES F. Reform of Selected and MoE) and III (i.e., less ambitious reforms in several Agencies agencies). G. Modernization of Evaluated under Period III since this is when the bulk of Provincial Governments its implementation took place. Third Ammendment Evaluated under Period III, since SINTyS Component was H. SINTyS added under the 3rd Amendment. 1The First and Second Ammendment respond to a two-pronged restructuring strategy, for which they are evaluated as one. Original PDO ­ Moderately Satisfactory To assist urgently the Borrower to prevent or minimize the disruption in the Borrower's social and economic infrastructure that could be caused by the failure of critical central government systems to process data properly after December 31, 1999 due to the so-called "Y2K Problem." Argentina's social and economic infrastructure was not disrupted when the country transitioned into the new millennium. Disruptions in the central government were minimal and Argentina by and large was untouched by the Y2K threat. It could be argued that the smooth Y2K transition was the result of the GoA's proactive actions and the support it received under this operation, including the 127 remediation action plans that were formulated under the project. However, several factors suggest that the operation may have had a more modest role: As mentioned above, the project's original design lacked a robust Results Framework and there was no systematic follow-up of the project's key performance indicators. Project disbursements were very limited. Only US$2.5 million were disbursed for Y2K activities, of which US$2.2 million were for prevention and support activities; no disbursements were done for remediation activities. As of December 21, 1999, just days before the Y2K transition, the operation was rated Unsatisfactory, both in terms of its PDO achievement and its implementation. 15 The fact that countries where very little was spent on tackling the Y2K threat (like Italy and Korea) fared just as well as those who spent a lot (the UK and the US) has generated debate on whether the absence of computer failures was the result of the preparation undertaken or whether the significance of the problem had been overstated. First and Second Amendment PDOs ­ Moderately Unsatisfactory13 (i) Same as original PDO; (ii) to assist the Borrower in designing and implementing a program to modernize the non- financial public sector in Argentina both at the national and provincial levels; and (iii) to strengthen the institutional capacity at the Borrower's provincial level. The achievement of PDOs outlined under the First and Second Amendments is deemed moderately unsatisfactory. While a sound and comprehensive state modernization program was designed as envisioned under the First Amendment, it was not implemented as originally conceived. As discussed above, without the political backing of its champion, Argentina's Vice President, the implementation of a comprehensive state modernization program such as the one being proposed became virtually unfeasible. While important enabling legislation and administrative norms were passed during this period (i.e. on procurement and digital signature, which were enacted in 2001), modest progress was done in the implementation of cross-cutting "horizontal" reforms during 2000 and 2001. Likewise, the operation had no long lasting impact at the provincial level during this period. The modernization of two key government agencies--i.e., the tax and social security agencies--are an exception. Together with the Ministry of Education, the Federal Tax Administration (Administración Federal de Ingresos Públicos ­ AFIP) and the National Social Security Administration (Administración Nacional de la Seguridad Social ­ ANSES) were targeted for the implementation of "vertical" reforms under the state modernization program. While reform efforts were erratic before the crisis, these two agencies were swiftly transformed in its aftermath as a result of strong political will on the part of the new authorities and targeted Bank support. As shown in Table 4, the Key Performance Indicators corresponding to these PDOs reflect the operation's performance in 2000 and 2003. In particular, the three first Indicators indicate that vertical reforms were successful in two of the three targeted key agencies (i.e. the tax and social security agencies), but they can only partially be attributed to this loan. The remaining three indicators show that whatever modest progress had been achieved in the development of horizontal management tools before the crisis was reversed in its aftermath. Table 4. First and Second Amendment ­ Key Performance Indicators Outcome Indicator Achievement Tax revenue increased by 0.25 percent of GDP annually in 2002, 2003, Achieved and 2004 over year 2000 baseline in 2003, 200414 Average period between retirement and receipt of social security Partially Achieved15 payments reduced by 50 percent by end 2003 in 2005 13 The PDO of the First Amendment was to provide support for the design of the state modernization strategy, while the Second Amendment expanded this objective to also implement the newly designed strategy, including the strengthening of provincial governments. As these two Amendments were conceived as part of a two-pronged restructuring strategy, their PDOs are consolidated for the assessment of the project objectives. Moreover, it seems unwarranted to assess the attainment of a PDO focusing only on the design of a reform strategy, as it would artificially increase the overall project rating. 14 Net tax revenues (not including customs taxes or social security) as a percentage of GDP was 13.4 percent in 2000. It amounted to 11.49 percent, 13.93 percent, and 17.26 percent in 2002, 2003, and 2004, respectively. 15 According to data reported by ANSES' Strategic Planning and Control Units, time elapsed between retirement and receipt of social security payments was reduced from 80 to 63 days for the public system, and from 225 to 91 days for the private option between 2001 and 2005. 16 Table 4. First and Second Amendment ­ Key Performance Indicators Outcome Indicator Achievement Education Ministry restructured by end 2002. Not Achieved New procurement system functioning by mid 2003. Not Achieved Personnel register covering all central government employees functioning by mid 2003. Not Achieved At least 15 agencies operating by 2003 at levels of performance agreed with Chief of Cabinet Office under Annual Performance Agreements and Not achieved Citizens' Charter Program. The cumulative achievements of individual components that remained unchanged in focus until the end of the project is discussed under the Third Amendment, as they largely reflect the incremental state modernization strategy that was implemented from 2004 onward and formally adopted under the Third Amendment. However, the assessment of achievements of three components is pertinent to the context of the First and Second Amendment, for which it is discussed below. Component C - Modernization of the Public Sector: Moderately Satisfactory. This component supported the design of a program to modernize the non-financial public sector in Argentina, both at the national and provincial levels (i.e. it corresponded to Component D introduced under the First Amendment). Decree 1003/01, issued on January 29, 2001 established an outline of a National Modernization Plan for the non-financial public sector. The proposed program constituted a significant departure from previous public sector reform efforts in Argentina, which had largely focused on downsizing and "de-inventing" the state, or on narrowly targeted improvements in specific operations. At the national level in particular, reform efforts had focused on selected reforms within individual government agencies rather than on cross-cutting institutional processes that affect all agencies of the public sector. Consequently, the successes achieved had been hindered by systemic problems facing the public sector as a whole. Furthermore, efforts in one agency without appropriate attention to the links and dependence on partner stakeholders further restricted positive impacts. In contrast, the proposed modernization strategy focused on reinventing the government in the sense of broadly strengthening management systems and the service orientation of public administration. It put forward an intensive and integrated approach to modernization that focused on both vertical and horizontal reforms. In terms of the vertical reforms, the proposed modernization program supported a comprehensive set of actions supporting short- to medium-term reforms in priority agencies as a way of maximizing tangible impacts on fiscal performance. In terms of horizontal reforms, the project introduced changes in inputs and incentive frameworks, including fiscal incentives. It also identified key management tools that could have a wide impact throughout the national public sector. It also sought to actively promote state modernization efforts at the provincial level. As discussed earlier, the program was overly ambitious, particularly considering the country's overall conditions at the time. Although it was never implemented as envisioned, it helped pave the way for future reform efforts. The more modest modernization strategy that was implemented from the end of 2003 onward built upon some of the elements of this strategy, as does the State Modernization II project that has been recently approved. Component D - Streamlining the Macro-Structure of the National Government: Unsatisfactory. This component supported the comprehensive overhaul of Argentina's non-financial national public sector to increase the efficiency and effectiveness of administrative procedures and service provision at the national level. Several preparatory activities were conducted, including assessments of alternative organizational structures, as well as awareness and dissemination campaigns aimed at broadening support among key stakeholders. However, these reforms lacked the needed support, as policy makers realized that across-the-board organizational reforms were difficult to implement in the pre- and post-crisis environment. Although the conceptual model that emerged from these background activities helped guide subsequent modernization efforts, the objective of overhauling 17 the macro-structure of the national government was abandoned and a gradual approach to strengthening "islands" of modernization was adopted instead. This component was subsequently cancelled under the Third Amendment. Component F - Reform of Selected Public Agencies and Decentralized Entities: Moderately Satisfactory. While the indicators referring to increased tax collections and the time reduction for processing of pensions may appear to suggest that the achievements in the performance of AFIP and ANSES are a result of the actions supported under this operation, their impact is more modest. Improved tax collections during 2003 and 2004 reflect Argentina's post-crisis economic recovery. They also reflect the fact that AFIP became an autonomous institution (ente autárquico) in 2002 and that new legislation was passed in 2003 providing for improved mechanisms to reduce tax non- compliance, including steeper sanctions. Likewise, ANSES' enhanced performance was the result of the efforts of a reform-minded administration that took office in January 2002, setting in motion a wave of cultural and institutional transformation. While the tools developed under the operation, such as management by results and Citizens' Charter Programs, were indeed incorporated into the ANSES' modernization efforts, they were minor complements to the vision and the commitment of ANSES' authorities and the Bank support received under ANSES I TAL (Technical Assistance Loan No. 4131-AR), which focused specifically on the modernization of this key agency. Conversely, no substantial progress was made in the modernization of the Ministry of Education due to institutional instability and a high turnover of authorities. PDOs Third Amendment ­ Moderately Satisfactory To implement the Borrower's strategy to strengthen public sector management tools to improve transparency and civil society participation as well as increase the efficiency and quality of management in selected areas of public services. Achievement of this PDO is deemed moderately satisfactory. While the operation effectively supported the GoA's efforts to strengthen public sector management tools, the overall gains in transparency and civil society participation, efficiency, and quality of management in the targeted areas have been only moderate (see Table 5. Key Performance Indicators). The moderate achievements, in turn, reflect the gradual or incremental strategy adopted by the GoA, in which progress was achieved on multiple fronts, but without the forcefulness needed to engender structural transformation. This is particularly true in areas in which modernization efforts were met with significant resistance, such as procurement and human resources management. Progress has been made in the context and space provided by respective government commitment. Thus, it is not surprising that, although the enabling legislation is in place, progress has been modest--albeit, of course, very valuable--in these two areas and, as a result, gains in efficiency and transparency are still far from reaching their full potential. Likewise, it is difficult to assess the overall impact of the strategic plans and other management-by-results tools that were supported under the operation, and there are no indications that these tools have attained the critical mass and degree of institutional insertion needed to truly create a results-based culture and enhance transparency and efficiency throughout Argentina's public sector. There are, however, two notable exceptions. Substantial progress has been made in e-government, in terms of advancing the overall legal framework, envisioning and setting in motion the implementation of a comprehensive strategy, and developing sound technical tools aimed at improving transparency and efficiency of government agencies and their delivery of services. Two agencies, the national Information Technology Office (Oficina Nacional de Tecnología de la Información ­ ONTI) and SINTyS, have been responsible for the achievements in e-government. These two agencies have collaborated in some areas and complemented their efforts in other areas, fostering the adoption of ICT tools by agencies at the national and provincial levels, which, in turn, have obtained clear gains in efficiency and transparency. Although more reduced in its scope, the Citizens' Charter Program is another 18 exception, as it has been widely adopted by national agencies that interact with the public and is now valuable management tool in key service-delivery institutions, such as ANSES. On the other hand, it needs to be strongly considered that given the broad PDO and the output-rather than outcome-oriented indicators, and the progress made with the project despite a very difficult overall operating environment, project achievements can be ranked as strong, so a more positive ranking could also be considered. Table 5. Third Amendment ­ Key Performance Indicators Outcome Indicator (*) Achievement Assessments of internal and external performances and the users' Achieved: The number of agencies implementing Citizens' perception indicate a substantial Charters is at target (50 agencies). Likewise, 80% percent of user improvement of public management surveys and focus groups denote improved service delivery in line and service delivery in selected areas. with target. Partially achieved: Although output targets are largely met, actual Access to information and reporting on improvements in access to information due the implementation of operation in selected areas is management-by-result tools and new M&E systems, such as the substantially improved. one for the Chief of Cabinet Office, are still modest. In the case of the M&E systems, this is due in part to the fact that the M&E systems are still in the early stage of implementation. Achieved: The government's portal, and the electronic directory of The use of e-government tools is government procedures in particular, constitute a useful tool for expanding throughout the NPA. citizens, facilitating their access to services. Likewise, the enabling environment (legal, institutional, and electronic infrastructure) for the digital signature is now largely in place. Partially Achieved: Argentina's e-procurement system (SECOP) is The new Procurement system is operational for purchases up to Arg.$10,000 (US$3,200) in four operating throughout the NPA. agencies (eight procurement units)--equiv. to 5 percent of the national administration. Improvements of Human Resources Partially Achieved: An electronic registry that is being regularly Management are in operation updated has been developed for the totality of SINAPA employees throughout the NPA. (i.e. 26,000 employees). This represents over 20 percent of all permanent civilian employees under the central administration. N.A.: There are 16 government agencies and programs that use consistent, common processes to identify entities and assets. In Common, consistent processes in addition, SINTyS and ONTI have recently issued information- place for registering people, legal exchange standards for 30 commonly-used data types, which are entities and assets. expected to soon be mandatory for all national agencies. Since no target was specified and there is not direct relationship with other output targets, it is difficult to determine the actual level of achievement. Achieved: Information on family relationships is now available for Availability of information on family 9% of the population. Although no target was specified, relationships. achievements amply exceed the target in the digitalization of civil registries, suggesting that this indicator was met. Achieved: The number of individuals and legal entities identified People and legal entities identified with with a single tax ID code (CUIT) has increased from 3,000 to over a single, unique key. 90,000 during 2006 and 2007 (amply exceeding the original target of 7,000). Partially Achieved: Availability of information in electronic form has increased or exceeded targets in the case of vital facts (civil Availability of information for eligibility registries), population without health coverage, and securities for social services and fiscal (Comisión Nacional de Valores). It has increased at levels below obligations. the corresponding targets for student enrolment, real estate ownership, and members and owners of legal entities (corporations and non-government organizations). (*) While the Third Amendment presented a full-fledged set of intermediate output indicators for the various components, some of the Key Performance Indicators were not identified at an operational level, leaving the, open to multiple interpretations. In addition, no baselines or targets were defined at the time for any of the Key Performance Indicators; thus, it cannot be clearly determined whether the outcome was achieved or not. The assessment of achievements presented above reflects the progress made in achieving the intermediate output targets under the various components. 19 Table 6 summarizes the main gains in transparency and civil society participation as well as the increase in the efficiency and quality of management as a result of the operation. Table 6. Achievement of PDO corresponding to the Third Amendment16 Improvements in Transparency Human Resources Management The national public employment office (ONEP) now reviews all contracts of public sector consultants with salaries over Arg.$2,000 a month to ensure the candidate is qualified for the job. The merit-based career system for SINAPA has been strengthened. SINAPA is the most important human resources regime, covering over 20 percent of all civilian employees within the central administration. The ONEP, in conjunction with ONTI, has developed a Central Civil Servants Registry (SIREPEVA), which covers all SINAPA employees. The registry is available on the government's intranet for consultation and continuous updating by public official. Together with ONEP's registry of contracted employees, which is near completion, the two personnel registries mentioned above (SIREPEVA and SINAPA) cover approximately 19 percent of all employees (civilian and armed forces) in the central administration (10 and 9 percent, respectively). As a result, employment statistics for the central administration have improved.17 Progress has been made in bringing individual contracts in line with the principles of the civil service law, including: i) ONEP's review of all contracts with salaries over Arg.$2,000 a month to ensure the candidate is qualified for the job, and ii) the transfer of 15,000 contracted employees to a regime that imposes salary ceilings, but also gives them additional benefits. E-Government The Digital Signature (Law N° 25.506), which was enacted in December 2001, establishes the obligation of the national government to implement this technology within a period of five years.18 Approximately 85 percent of the supporting ITC platform has been developed. Implementation has begun on a pilot basis. Efforts to digitalize key social and fiscal information have substantially increased the quality and availability of data on: family relationships, vital facts (birth, marriage, death, and family relationships), student population, registration of deeds, and registration of juridical persons. Procurement A new procurement law (Law N° 1.023) was enacted in 2001 that incorporates higher standards of transparency and an emphasis on competitive procedures for the national government. However, the failure to issue all supporting regulations has limited the potential impact of this legislation. The National Procurement Office (ONC) has developed a procurement portal that has almost 3 million annual hits (http:www.argentinacompra.gov.ar). An e-procurement system (SECOP) is being implemented for purchases up to Arg.$10,000 in 4 pilot agencies (8 procurement units) within the central administration--equivalent to only 5 percent of the national administration. A registry of suppliers has been created, with approximately 18,000 suppliers, as well as a list of reference prices. Improvements in civil society participation Citizens' Charter Programs As of 2007, 50 agencies, representing 90 percent of agencies in the national government that have interaction with the public, have implemented Citizens' Charters, making available to the public (in print and through the Internet) their mission and responsibilities, citizens' rights, complaint and appeals procedures, as well as specific annual objectives of the agency. Citizens' feedback on the performance of these agencies is systematically collected through scorecards, surveys, hot lines, focus groups and others instruments. In the case of ANSES, for example, Citizens' performance scores are formally incorporated into the agency's M&E system. 16 Note that several of the achievements detailed in Table 6 were agreed under the 2004-2005 Operational Plan and substantial progress towards their achievement was made during those years. To avoid unnecessary repetitions, however, and because the changes in the overall modernization strategy reflected in these Operational Plans were only formally adopted under the Third Amendment, they are reported here. 17 The National Government's central administration was composed of approximately 266,000 employees in 2006, of which approximately 241,000 are permanent employees (equivalent to 91 percent) and 25,000 are individual consultants (equivalent to 9 percent). There are approximately 26,000 employees under SINAPA's regime, representing 10 percent of total permanent employees within the central administration. 18 The digital signature is vital to ensure transparency in e-government applications, as it enhances security in internal communications by guaranteeing the identity of the signer and the integrity of electronic messages. 20 Table 6. Achievement of PDO corresponding to the Third Amendment16 Administrative Procedures International Organization of Standardization (ISO) norms have been adopted for 13 procedures (compared to a target of 10) as a way to improve quality and efficiency. The new government portal also hosts an electronic directory of government procedures (the so-called "Portal de Trámites"), which includes over 750 procedures (trámites) within the central administration, 50 of which can be processed electronically (compared to a target of 400 procedures, and 10 electronic ones).19 E-Government The development of a new government portal (http:www.argentina.gov.ar), which provides general information about the country and the national public administration as well as information particularly targeted to citizens, businesses, and foreigners (information for foreigners is also available in English). Procurement Advances have been made in publicizing procurement processes on the Internet, especially the calls for bids, better accessibility to bidding documents, and notification of the final awards. However, only 5 percent of procurement plans are currently being adequately published each year. Improvements in efficiency E-Government The creation of ONTI in 2002 constituted a major cornerstone in the development of e-government in Argentina, as it has provided a new systemic view for e-government development. Under ONTI's sponsorship, a forum for IT personnel has been established to promote internal knowledge sharing and collaboration. SINTyS has established itself as an effective broker of information within Argentina's public sector, promoting the exchange of information across government agencies at the national and provincial levels. There are approximately 200 government entities currently participating in SINTyS, including 24 entities at the national level (incl. AFIP, ANSES and RENAPER), 177 entities at the provincial level, and 11 entities at the municipal level. SINTyS has supported the development of normalized data-exchange procedures to be used by participating entities. SINTyS and ONTI have jointly defined standards for the most commonly used 30 data categories--i.e., name, address, date of birth, gender, etc.--that are expected to soon be adopted as national standards. Improvements in quality and availability of key social information have rendered benefits of approximately US$57 million during 2006 and 2007, arising from the detection of ineligible beneficiaries in social programs at both national and provincial levels. Improvements in quality and availability of key fiscal information have rendered benefits of over US$5.4 million between 2006 and 2007, arising from reduced tax non-compliance, including the detection of tax fraud, arrears and evasion at both the national and provincial levels. Individual agencies have also benefited from increased efficiency and other savings as a result of their participating in SINTyS. For example, prior to the creation of SINTyS, ANSES had set up a country-wide network to collect data on deaths, as payments of social securities extended several months after the death of beneficiaries, resulting in tantamount loses. ANSES now relies on SINTyS to obtain this information, and is moving toward real-time data exchange interconnection with provincial registries through the SINTyS network to improve even further its information on vital facts. A new response unit has been created to centralize and coordinate efforts within the national level to manage security attacks or potential breaches to the computer systems of national agencies. Improvements in quality of management Management by Results As of 2007, 29 agencies had received support under the project to implement results-based management tools, including Annual Performance Agreements (APAs) as well as results-based budgeting, operational manuals, process reengineering, and organizational streamlining.20 However, unless performance is systematically monitored by the CCO and linked to financial, budgetary and other incentives as originally conceived, these tools will only have a limited impact on management performance. 19 Http://www.argentina.gov.ar/argentina/tramites/. 20 Annual Performance Agreements (APAs) were the instruments used when the state modernization efforts just started. Only three APAs, however, were signed during the pre-crisis period. After the crisis, emphasis was placed on other results-based management tools, including results-based budgeting, operational manuals, process reengineering, and organizational streamlining. 21 A summary of the achievements under the individual components is discussed below (please, see Annex 2 for a detailed description of outcomes): Component E ­ Creation of a New Public Management Model: Moderately Satisfactory. While it can be discussed if the understanding of the new public management model under the project is similar to that promoted under that terminology in some anglophone countries, significant progress has been made in the modernization of key horizontal systems in public management areas under the responsibility of the Chief of Cabinet Office. This, in turn, has contributed toward moderate improvements in transparency, efficiency and quality in public sector management. Specific achievements include: (i) the development of a national e-government plan and relevant tools, such as the government portal and the digital signature; (ii) strengthening of procurement tools, such as the development of an e-procurement system and publication of calls for bids; (iii) improvement in human resource management, such as the partial harmonization of selected public employment regimes and the implementation of personnel registries; and (iv) design and implementation of accountability mechanisms, such as the Annual Agreement Plans and Citizens' Charter (Cartas Compromiso). Achievements under each of the sub-component are described below: E.1. Management by Results and Citizens' Charter Programs21 ­ Partially Achieved. This subcomponent sought to increase accountability of government agencies by supporting: (i) the preparation and implementation of internal agency reform programs in up to 20 agencies; (ii) the implementation of Annual Program Agreements (APAs) subscribed between individual agencies and the Chief of Cabinet Office (CCO), outlying explicit financial and physical targets to be used in their annual performance evaluations; and (iii) the design and implementation of a program of Citizens' Charter, making available to the public (in print and through the Internet) the agency's mission and responsibilities, citizens' rights, complaint and appeals procedures, as well as specific annual objectives of the agency. Some of the project's achievements in this area include: Demand for technical assistance from the implementing agency (Oficina Nacional de Innovación en la Gestión - ONIG) has increased steadily over the past years. ONIG has identified 93 best practices in management and service delivery among participating agencies for future replication, including quality certification (for example, ISO norms), the redesign, digitalization and automation of procedures, and improvements in service delivery centers. In addition, strategic plans have been developed or updated for 27 national agencies with the operation's support, amply exceeding the original target of 20 agencies. No systematic assessment has been conducted, however, of the actual impact of these plans in terms of efficiency and transparency. Impact evaluations are planned under the Second State Modernization Project. Annual Performance Agreements: Decree 103 (2001), which established the legal framework for the New Public Management Model, introduced Annual Performance Agreements (Acuerdos Programa) as results-based agreements built on strategic planning, budget allocation, operational plans, and fiscal incentives. In particular, APAs promoted efficiency gains by linking them to a system of incentives in which participating entities received 75 percent of the budget savings resulting from their efficiency gains and could use them at their discretion for organizational upgrades and salary increases. The financial incentives vanished with the 2001- 2002 crisis, and non-financial mechanisms were subsequently devised to reward good institutional performance. As of 2007, 29 agencies had received support under the project to implement results-based instruments, including results-based budgeting, operational manuals, process reengineering, and organizational streamlining. However, with the exception of AFIP and ANSES, the actual level of implementation of these instruments and their related outcome are not clear. Unless 21 Throughout the life span of the project, the terms "Citizen Compact" and "Citizens' Charter Program" were used as synonyms. 22 performance is systematically monitored by the CCO and linked to budgetary incentives as originally conceived, these tools will only have an isolated impact on enhancing management.. Citizens' Charter Programs: As of 2007, Citizens' Charter Programs (Cartas Compromiso) have been implemented in 50 agencies, representing 90 percent of service-delivery agencies in the national government. The Citizens' Charters are a consensus-building and monitoring tool aimed at making explicit the mission, responsibilities and expected performance of individual agencies and submit them to the citizenry for overseeing. As part of the implementation of Citizens' Charters, the Chief of Cabinet Office, the agency authorities and employees agree upon specific performance and service delivery standards, which are then outlined in the agency's Citizens' Charter. Citizens' feedback on the achievement of standards is systematically collected through scorecards, surveys, hot lines, and others instruments. User surveys and focus groups in the participating agencies show improved service delivery in 80 percent of the cases.22 In this regard, it is important to note that ONIG and the PIU were quite proactive in 2006 and 2007, conducting assessment activities that exceeded the original targets and, thus, contributing greatly to the successful implementation of this tool. Citizens' Charters are now a core management tool in key service-delivery institutions, including ANSES. The design of their methodology, its limited participatory nature, their M&E and the specific performance improvements linked to the Citizens' Charters however still point to further room for improvement both in their design and implementation. E.2. Human Resources Management ­ Partially Achieved. This sub-component supported the development of a more integrated human resources management system as outlined in the Civil Service Law (Law No. 25,164 ­ 1999), which emphasized merit appointments and promotions for permanent staff, separation of permanent from short-term and political appointments, equitable treatment for the same work, and the right to join and be represented by unions in collective negotiations. Specific activities included under this subcomponent included: (i) drafting and enactment of internal regulations for the civil service legislation; (ii) preparation of new regulations and procedures controlling the re-employment of separated or retired public employees; (iii) creation of a personnel register, (iv) studies on personnel recruitment, career development, and salary structure; and (v) piloting of the new human resources system in selected agencies. The economic crisis of 2000-2001 provided little opportunity to advance with the organizational and legal framework developed in the late 1990s. Hiring was frozen, salaries were reduced by 13 percent, and a regime of voluntary retirement was introduced. These measures, together with the difficult economic conditions prevailing in the aftermath of the crisis, made public sector employees even more resistant to change. Once the worst of the crisis was over, the government revived efforts to strengthen central oversight and standardization of human resource policy, and to enhance the capacity of the National Public Employment Office (Oficina Nacional de Empleo Público ­ ONEP). As a result, progress has been made in: i) the design of framework laws regulating public employment and collective contracts; ii) the gradual reduction of the number of separate labor regimes and bringing them into closer compliance with framework legislation; and iii) the improvement of labor statistics for the public sector through the development of electronic registries. Specific achievements under this sub-component are summarized on Table 6 and detailed in Annex 2. : E.3. Training ­ Partially Achieved. This sub-component sought to strengthen the ability of National Institute of Public Administration (Instituto Nacional de Administración Pública - INAP), which is the principal training agency for the national executive branch to, among others, increase its ability to work with individual agencies to link their training budgets to their annual work program 22 See Report from ONIG, Supervision Report, December 2006. 23 and identified needs and develop stronger evaluation programs. In 2006, however, there was a shift in the training strategy supported under the operation, departing from a comprehensive reform of the INAP and its training strategy to a focus on flexible training opportunities for full-time public employees based on the combination of electronic courses (e-learning) and informal networks of support and tutors. More than 20 e-learning courses have been developed, addressing the specific training needs of government agencies, including electoral committees (mesas electorales), financial administration, e-government, Citizens' Charters, conflict resolution, and tourism. A total of 6,150 public employees have been trained using e-courses by 2007 (compared to a target of 2,000). The high quality of these courses has been underscored by the Latin American Center of Public Administration for Development (Centro Latinoamericano de Administración para el Desarrollo - CLAD). The operation has also financed training in areas such as human resources management and procurement, often in conjunction with the INAP. E.4. E-Government ­ Achieved. This sub-component supported a comprehensive effort to develop and implement an information and communications technologies (ICT) strategy. The implementation of this sub-component was particularly successful. E-government became the central tool to foster transparency, efficiency, and civil society participation in the provision of public services and consequently, central to the achievement of the operation's objective. The impact of this sub-component has been substantial both at the institutional and operational levels, as it helped develop a solid legal and institutional framework for e-government and it also helped advance state- of-the-art tools to support the further expansion of e-government applications, including the digitalization of the administrative circuits. The main achievements of the State Modernization Project are a new focus on institutional coordination for e-government with the establishment of ONTI as the national coordination office and the development of national plans to improve information quality and systems integration, including the National Plan for Electronic Government, security framework, digital signature, and data standards. The achievements under this component, summarized in Table 6 and detailed in Annex 2, have been substantial. E.5. Administrative Procedures ­Achieved. This sub-component sought to systematically streamline administrative procedures throughout the national administration. Specific achievements include: The new government portal also hosts an electronic directory of government procedures (the so- called "Portal de Trámites"), which includes over 750 procedures (trámites) within the central administration, 50 of which can be processed electronically.23 This achievement amply exceeds the original target of 400 procedures, and 10 electronic ones. Based on the information provided by individual government agencies, the portal describes in detail the steps and requirements associated with all government services procedures. The largest number of requests corresponds to the application for and renewal of passports and national identification documents. It is important to note, however, that the consolidation or simplification of procedures, which could result in substantial streamlining and offer a potential for significant time and cost reductions (not envisaged under the loan) is still pending. Efforts to streamline administrative procedures focused mainly on supporting the efforts of individual agencies to adopt ISO norms (i.e. the Quality Management Standard developed by the International Organization of Standardization - ISO) as a way to improve the quality and efficiency of 13 procedures, many of them focusing on attention to the public. ANSES is one of the agencies that have adopted ISO norms to enhance their customer service processes. In particular, ANSES has obtained ISO 9001:2000 accreditation for two of its call centers and for the quality customer service procedures implemented in all its field offices. 23 Http://www.argentina.gov.ar/argentina/tramites/. 24 E.6. Procurement ­ Partially Achieved. This sub-component aimed to support: (i) the preparation of detailed regulations for implementing and enforcing a new national procurement law expected to be presented to the Congress in the near future; (ii) the implementation of a public sector procurement information system; and (iii) the employment of staff training in the new procurement rules and procedures. Significant progress toward the strengthening of the country's procurement has been achieved, including the passage of important new legislation, the strengthening of the National Procurement Office (Oficina Nacional de Contrataciones - ONC), the implementation of a procurement portal (www.argentinacompra.gov.ar) and the partial implementation of an e-procurement system (Sistema Electrónico de Contrataciones Públicas - SECOP). However, achievements under this component fell short of the original expectations, as the failure to issue supporting implementing regulations, documents and guidance has limited the potential impact of this legislation. Moreover, it is important to note that public works, which represents the bulk of public procurement, is not under the orbit of the ONC. Thus, in line with what was agreed under this operation, the improvements in procurement are limited to a relative small share of all procurement operations. Specific achievements in this area are summarized in Table 6 and detailed in Annex 2. Component F- Reform of Selected Programs in Key Public Agencies and Decentralized Entities: Moderately Satisfactory. As discussed earlier, the original focus of this component was on the modernization of three key government agencies: AFIP, ANSES and the Ministry of Education. While AFIP and ANSES did indeed undergo a swift process of reform as a result of the strong political will of these agencies' authorities and Bank support under operations targeting the two agencies, no significant progress was achieved in the Ministry of Education. Under the Third Amendment, the focus of this component shifted to the implementation of agency-specific reforms (i.e., "vertical" reforms) in the education and justice sectors as well as in ANSES, the National Social Services Institute for Retirees and Pensioners (Instituto Nacional de Servicios Sociales para Retirados y Jubilados - PAMI), and the Property Registry (RENAPER). The Chief of Cabinet Office, however, subsequently cancelled activities focusing on ANSES, PAMI, and the Property Registry and focused instead on the development of Education Observatories in the Ministry of Education and Community Justice Centers (Casas de Justicia) as well as on the implementation of various other initiatives in other agencies. Even though the activities supported under this component succeeded in achieving tangible improvements in the various participating agencies, its focus was overly dispersed and many of the improvements were limited in scope. The main achievements under this component are described below: F.1. M&E System for Policy Analysis and Assessment by the CCO ­ Partially Achieved. This sub- component supported the development and initial stages of implementation of a monitoring and evaluation (M&E) system for the Chief of Cabinet Office, the so-called "System of Government Indicators" (Sistema de Indicadores de Gobierno - SIG), aimed at assessing the efficacy, efficiency and impact of public policies. To implement SIG, the Under-secretariat of Budget Coordination and Evaluation was established at the CCO in 2003. By 2007, a prototype for the deployment of SIG at the agency level has been tested in the Ministry of Labor, the Ministry of Justice, the Undersecretary of Emergencies of the City of Buenos Aires, the National Senate, and the National Statistics Agency (Instituto Nacional de Estadísticas y Censos - INDEC).24 In addition, the operation supported the development of an impact-evaluation methodology, including over 400 indicators, which was successfully piloted at the Ministry of Social Development. More than 100 public officials have been trained in the use of SIG. 24 Agreements for the implementation of the SIG in municipal governments have also been signed with the Ministry of the Interior. 25 While the Ministry of Economy and Production (Ministerio de Economía y Producción ­ MECON) and other ministries have developed their own M&E programs, these systems are largely self- contained and are not systematically used as inputs in resource allocation decisions. To address these shortcomings and with the support of the existing legal framework that grants the CCO far-reaching powers,25 the SIG has been conceived as a first step in the construction of an integrated, government- wide monitoring panel (Tablero de Control) aimed at systematically monitoring the pace of implementation and impact of key government policies at the national and sub-national level. Accomplishing such an ambitious vision, however, would require overcoming difficult challenges, including: providing the right set of incentives for individual agencies to provide sound information aimed at policy coordination and public expenditure efficiency, consolidating the role of the CCO in budget allocation decisions, and fully integrating the SIG into the budgetary cycle. So far, the achievements made under this sub-component constitute the initial steps toward the implementation of the SIG, which is also being supported under the State Modernization II Project. F.2. Public Expenditure Assessment Methodology ­ Partially Achieved. This sub-component supported the design and implementation of a public expenditure assessment methodology aimed at evaluating the efficacy of expenditures of key public programs. With a view to meeting public expenditure and resource allocation concerns, the CCO created the External Financing Directorate (Dirección Nacional de Programas y Proyectos con Financiamiento Externo - DINAPPFE), responsible for developing a consistent set of criteria and control mechanisms to be applied to externally financed projects (i.e. mostly projects with multilateral financing). While an expenditure assessment methodology has been developed, it has become evident that its implementation would enhance efficiency in the use of multilateral funds at the expense of adopting more cumbersome project approval and implementation procedures. Questions remain, however, on the long-term soundness of debt management and the contribution of these tools and methodologies to more transparent and streamlined public financial management. F.3 Assets Management System for the Chief of Cabinet Office - Partially Achieved. This sub- component supported the design and implementation of a physical assets management system. Traditionally a function of public financial management, the CCO chose to strengthen the administration of public physical assets given the weaknesses of the legal and institutional frameworks and, consequently, the absence of sound mechanisms to adequately manage them.26 Some progress has been made, including: i) a diagnosis has been conducted and the costs of mismanagement have been quantified; ii) an Asset Management Module has been piloted in three public entities (i.e. the highway administration, the treasury, and the former state airline); and iii) performance measurements have been formulated for the use of resources, such as water and energy; and iv) preliminary inventories of physical assets have been conducted. In addition, the CCO has adopted a participatory approach, creating an inter-agency task force to formulate a new asset management modernization strategy and potentially be responsible for its implementation. However, the incentive framework needed to streamline the management of assets is still unclear and the design of an assets management system is still at a very early stage despite several years of support under this operation. 25 Article 100 of the Constitution, the Law of Fiscal Transparency No. 25.152, and several decrees assign specific roles to the CCO, including coordination of the national administration and its public policies; participation in the processes for the preparation and modification of the public budget; control and evaluation of public programs linked to the national policies; and preparation and approval of results-based agreements to be executed by public institutions. The Financial Administration Law allows the Chief of Cabinet to reassign the budget as long as it does not top the existing annual ceilings. 26 The legal and institutional framework of public assets management is very fragmented, as responsibilities for asset management remain within different government agencies and no particular agency has the overall coordination, policy, enforcement or monitoring capacity. 26 F.4. Community Justice Centers (Casas de Justicia) - Achieved. This sub-component sought to support the implementation of the so-called Community Justice Centers (Casas de Justicia), which are community information centers aimed at providing assistance and disseminating information on constitutional rights, judicial processes, and access to public services to the more vulnerable sectors of the population, thus addressing gaps in access to information and services due to socio-economic status. Under the jurisdiction of the Ministry of Justice, these Community Justice Centers are implemented jointly with municipal governments and non-government organizations in areas which are particularly afflicted by poverty and/or very remote. Results so far have been highly encouraging, in line with the performance targets that were defined ex ante, for example in terms of the number of services requested; the time elapsed until a response was given; the number of beneficiaries that were directed to specific legal, administrative or social services; and customer satisfaction. In addition, the methodology used has been highly innovative and effective. Since the original five Community Justice Centers were first implemented in 2005, new demands have surfaced as the success of this initiative became apparent. By providing seed money, the operation successfully supported the demonstration potential of an innovative initiative. The Ministry of Justice and/or the corresponding municipal governments have absorbed the five centers into their operations. Questions remain, however, over the extent to which this system can be replicated and scaled up. F.5. Strengthening of the Justice General Inspectorate - Achieved. This sub-component sought to improve the administrative processes used to communicate information on companies' balances and shareholder meetings to increase the transparency in the reporting of such information. The Justice General Inspectorate (Inspección General de Justicia - IGJ),27 the agency responsible for this function, had limited oversight capacity due, primarily, to the relative obsolescence of its management tools. The lack of technical capacity of the IGJ had important negative consequences, as the lack of updated and complete information on the establishment and closure of corporations, their chapters, balances, reports from shareholder meetings, and rosters of shareholders affected the ability of other institutions to perform their judiciary, regulatory and oversight duties. Under the operation, the IGJ received support to upgrade its ICT systems to digitalize documents and facilitate data exchange and communication. In addition, a new streamlined process has been implemented in conjunction with AFIP to incorporate the tax identification code (Clave Única de Identificación Tributaria - CUIT) for both corporations and individuals. As a result of these actions, the oversight capacity of IGJ has been notably enhanced. Cooperation of the IGJ with different parts of the judicial system has also become more efficient, as judicial requests are now processed within the established 15-day deadline. To further strengthen transparency and ensure financial sustainability, the IGJ has established a Help Desk that provides non-restricted information to individuals on a fee-basis. An additional unintended outcome has been the use of up-to-date corporation data in money laundering detection. Component G - Promoting Provincial Government Reform: Moderately Satisfactory. This component supported institutional capacity building for provincial governments through a small, targeted program linked to the Federal Council on Public Administration (Consejo Federal de la Función Pública - CFFP), a group chaired by the Chief of Cabinet and comprised of all provincial governors. Although the CFFP was created in 1992, its mission was redefined under the de la Rua administration to serve as an information clearing house and forum for discussions on public administration between the national and provincial governments. Likewise, the scope of these discussions was substantially expanded to include other state modernization topics aside from those that had traditionally been at the center of the national-provincial dialogue, such as financial management systems. 27 The Justice General Inspectorate depends from the Ministry of Justice. 27 The project has contributed to fostering a policy dialogue between the CCO and the provinces on state modernization, including e-government, the modernization of horizontal public management tools, capacity building, and the dissemination of best practices. By the end of 2007, working agreements had been signed with 23 provinces28 to support the transfer of legal and regulatory frameworks, as well as tools and methodologies implemented at the national level to provincial governments. Some specific examples include e-government plans, digital signature, as well as the adoption of quality standards, such as the ISO standards. However, the role of the CFFP is still weak, in part due to its limited institutional and coordination capacity. Likewise, the implementation and impact of these working agreements still remain to be evaluated. Component H ­ SINTyS: Satisfactory. By facilitating the systematic interchange of social and fiscal information among participating agencies, SINTyS has contributed to improving the completeness, accuracy and reliability of agency data through cross-validation. These improvements in data quality and availability have, in turn, served to enhance the targeting of social programs and reduce tax non- compliance. It is estimated that the investments under this component have resulted in benefits of over US$60 million from reduced tax non-compliance and enhanced targeting of social programs.29 The achievements under this component have been substantial, as summarized below: H.1. Improvement of Social Services ­ Achieved. This sub-component aimed to improve the targeting and delivery of social services in Argentina through improved identification of individuals and relationships. Activities supported under this sub-component included: i) the exchange of information among agencies at the national and provincial levels responsible for the delivery of social programs and services; and ii) the digitalization of information in those organisms that are responsible for generating key social data: provincial civil registries and registries of students. Activities in this sub-component have contributed to enhance the quality and availability of key social information, including population without health coverage, vital facts (i.e. birth, marriage, divorce, children, and death), family relationships, and the identification of minors (i.e. less than 18 years of age) and their educational history. In turn, enhanced social information has resulted in benefits of approximately US$57 million during 2006 and 2007, arising from the detection of ineligible beneficiaries in social programs at both national and provincial levels. As shown in Annex 2, the achievements under this sub-component have exceeded the original targets, except in the digitalization of student registries. H.2. Improving Fiscal Efficiency ­ Partially Achieved. This sub-component aimed to decrease tax non-compliance by facilitating the interchange of fiscal information among participating agencies and improving the completeness, accuracy and quality of fiscal data. Activities supported under this sub-component included: i) the exchange of information among tax agencies at the national and provincial levels; and ii) the digitalization of information in those organisms that are responsible for generating key fiscal data: provincial registries of juridical persons (Registros de Personas Jurídicas) and provincial registries of deeds (Registros de la Propiedad). Activities in this sub-component have contributed to enhance the quality and availability of key fiscal information; including the identification of legal persons (i.e. corporations, limited liability companies, cooperatives, etc.) as 28 The original targets were 8, 12, and 16 provinces by the end of 2001, 2002, and 2003, respectively. 29 SINTyS has implemented a rather sophisticated M&E system by which, each time they perform an information exchange for a government agency, they request the agency's feedback in terms of the benefits it has obtained from it. Moreover, the next time the agency requests a comparable information exchange, SINTyS staff verifies whether the problems detected in the previous exchange have been eliminated. If the discrepancies still remain (for example, a beneficiary of a particular social program whom SINTyS data identified as non-eligible but still remains on the list of beneficiaries, SINTyS requests clarification from the agency. In this way, SINTyS has been able to refine the quality of information and the methodology used for information exchanges. In addition, through this two-pronged M&E system, it has also succeeded in attaining a reasonably accurate measurement of the actual benefits resulting from each information exchange. 28 well as their constitution, dissolution, mergers, and registry of authorities; deed and ownership information (i.e. deed registration, proprietor, and inhibitions); and the development of a virtual inter-jurisdictional registry of property owners and deeds inhibitions (Red Inter.-jurisdiccional de Inhibiciones y Titulares de Dominio). In turn, enhanced fiscal information has resulted in benefits of approximately US$5.4 million between 2006 and 2007 from reduced tax non-compliance, including the detection of tax fraud, arrears and evasion at both the national and provincial levels. As shown in Annex 2, output under this sub-component exceeded two of the original four targets. Overall, the impact of SINTyS in improving fiscal efficiency has been limited by the reluctance of tax agencies at the national and provincial levels to share their information, which is protected by law, the so-called "tax secret" (secreto fiscal). H.3. Technological Framework and Infrastructure ­ Achieved. This sub-component supported the design and implementation of a technological framework, including a normative framework and an ICT platform, to support the exchange of information among government entities. SINTyS has served as a facilitator and coordinator, ensuring that all government entities share their databases using compatible protocols, format and homologation methodology. Specific outputs under this sub- component include: The design of SINTyS' interconnection model, including its technological platform, has been completed and successfully tested. Hardware, software and exchange links to be adopted by SINTyS will be selected based on the experience gathered under this operation. SINTyS has supported the development of normalized procedures to be used by participating entities. SINTyS effectively integrates approximately 500 individual databases using uniform standards. Six of the 13 SINTyS provincial field offices (SPFOs) are inter-connected online, which is the next stage for SINTyS' decentralization. A Technical Board (mesa técnica) with representatives from AFIP, ANSES and RENAPER30 has been established to help build consensus among the major players at the national level on key technical issues. Support has been provided for the development and implementation of service-oriented applications such as the "One-Stop Institutional Window" (Ventanilla Única de Organismos - VUO), of which six have been deployed at different government agencies, including PAMI. SINTyS and ONTI have jointly defined standards for the most commonly used 30 data categories--i.e. name, address, date of birth, gender, etc.--that are expected to soon be adopted as national standards. H. 4. Organizational, Institutional and Legal Framework ­ Achieved. This sub-component supported the development and implementation of SINTyS' organizational and institutional framework at the national and provincial levels. Substantial progress has been achieved under this component, including: SINTyS has established itself as an effective broker of information within Argentina's public sector, promoting the exchange of information across government agencies at the national and provincial levels. There are approximately 200 government entities currently participating in SINTyS, including 24 entities at the national level (including AFIP, ANSES and RENAPER), 177 entities at the provincial level, and 11 entities at the municipal level. SINTyS has formalized agreements or is working jointly with several federal councils (consejos federales), including those gathering information from health insurers, housing institutes and property registers from all provincial jurisdictions. SINTyS has also set in motion its expansion process at the sub-national level to progressively incorporate provincial and municipal governments. Currently, all 24 provincial 30 National Registry of People (Registro Nacional de las Personas ­ RENAPER). 29 jurisdictions have already subscribed to agreements formalizing their incorporation to SINTyS, of which 13 have established SINTyS provincial field offices (SPFOs). In addition, there have been significant advances toward the permanent institutionalization of SINTyS within Argentina's public sector. A mayor step was taken in December 2007, when SINTyS was established as a National Directorate under the National Coordination Council for Social Policies (Consejo Nacional de Coordinación de Políticas Sociales ­ CNCPS), reflecting the national authorities' commitment toward the permanent institutionalization of SINTyS within Argentina's public sector. H.5. Security Framework ­ Achieved. This sub-component supported the design and implementation of the necessary physical, virtual and procedural security prevention tools to ensure the highest level of data privacy and confidentiality at all levels of business processes and information exchange with adequate controls for protecting the confidentiality of the information being accessed. Activities under this sub-component are particularly important to ensure that constitutional guarantees for the provisions of privacy and confidentiality of individual information are preserved and protected under SINTyS. Specific achievements include: SINTyS now has in place a security team familiar with the national and regional security frameworks and international security best practices. A common security framework has been developed for all the sub-components and physical infrastructure of the project and physical infrastructure protection is gradually being implemented in all SINTyS locations and hardware connected to the network. The design of the legal framework has been assessed, in particular privacy of information and confidentiality measures. Specifically, Argentina's Habeas Data Law (Law No. 25.326) provides an adequate legal framework for the protection of private information at the national level. There is a close working relationship between SINTyS and the National Directorate of Personal Data (Dirección Nacional de Protección de Datos Personales - DNPDP). SINTyS has actively collaborated with the DNPDP to define access rights to information for individual agencies--the so-called roles and profiles (Roles y Perfiles). In addition, a system is in place within SINTyS to grant access to information to individual agencies according to the roles and profiles defined jointly with the DNPDP. Basic security processes and procedures are in place, including encryption, and physical control environments have been defined and are being implemented. An implementation plan has been defined. SINTyS has been granted registration authority for ONTI's certification of digital signature certification to, in turn, adopt digital signature for its communications (Disposition No. 55/2007 ­ UCP-CNPS). Table 7 summarizes the Achievement of PDOs and Project Components for the original project and the subsequent amendments. Table7. Achievement of Outcomes per Amendment and Project Component Achievement of Outcomes Rating Original PDO Y2K Moderately Satisfactory First and Second Amendments Moderately Unsatisfactory Component C - Modernization of the Public Sector Moderately Satisfactory Component D - Streamlining of the National Government Unsatisfactory Component F ­ Reform of Key Government Agencies (i.e. AFIP, ANSES, Ministry of Education) Moderately Satisfactory 30 Third Amendment Moderately Satisfactory Component E - Establishment of a New Public Management Model Moderately Satisfactory Management by results Partially Achieved Integrated human resources management system Partially Achieved Civil service training Partially Achieved E-government Achieved Streamlining of administrative procedures Achieved Public procurement system Partially Achieved Component F. Reform of Selected Programs in Key Agencies & Decentralized Entities Moderately Satisfactory M&E System for the Chief of Cabinet Office ­ SIG Partially Achieved Expenditure Assessment System Partially Achieved Design System Public Physical Assets Partially Achieved Casas de Justicia Information & Dissem. Centers Achieved Strengthening of the Justice General Inspectorate Achieved Component G - Promotion of Provincial Government Reform Moderately Satisfactory Component H - SINTyS Satisfactory Improvement of Social Services Achieved Improvement of Fiscal Efficiency Partially Achieved Technological Framework and Infrastructure Achieved Organizational, Institutional and Legal Framework Achieved Security Framework Achieved 3.3 Efficiency Not applicable - Neither NPV nor ERR was estimated at appraisal. While measures of cost and financial efficiency were calculated as part of the preparation of the Second Amendment, they are not considered relevant as they are based primarily on the expected increases in tax collection resulting from the reform of AFIP, which, as discussed earlier, was only tangentially affected by this operation. Despite the above, it is important to note that the investments under this operation are expected to have high yield returns. While strict calculations of efficiency are not feasible for the majority of activities in the project, it is estimated that the investments under Component H - SINTyS have resulted in over US$60 million in benefits by reducing tax non-compliance and enhancing the targeting of social programs, compared to US$8 million in IBRD financing under this operation. 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory The operation's overall performance is rated moderately satisfactory. As shown in Table 8, this rating is based on the weighted average of the achievement of PDOs as: (i) originally designed; and as restructured under: ii) the First and Second Amendments; and (iii) the Third Amendment. Achievement of the original PDO is considered moderately satisfactory, since, although no disruptions were caused by the Y2K problem, it is difficult to establish a causal relationship between this outcome and the operation. As noted earlier, the First and Second Amendments are evaluated together as they were part of a two-pronged restructuring strategy. The achievement of the corresponding PDOs is considered moderately unsatisfactory, since little sustainable progress was made tin the implementation of the ambitious state modernization program of the de la Rua administration as a result of the unstable macroeconomic conditions and the uneven political support. Three positive outcomes, however, emerged from this period: (i) the state modernization program that was designed at the time provided a sound footprint for the modernization efforts that have been 31 pursued later on; (ii) the passage of key legislation that provided the legal framework for subsequent reforms in procurement and e-government; and (iii) the management tools supported under this operation were incorporated into the comprehensive modernization efforts undertaken by AFIP and ANSES in the aftermath of the 2001-2002 crisis. Finally, the achievement of the PDO corresponding to the Third Amendment is considered moderately satisfactory, as considerable progress was made in the implementation of key public sector management tools, including SINTyS, which have been gradually incorporated into Argentina's public sector, improving the efficiency, quality and overall governance not only at the national level but also among provinces. However, the wide scope of the modernization efforts together with the more incremental implementation strategy adopted by the GoA during this period have resulted in valuable, although scattered impacts. More importantly, the progress in procurement and human resources management, which offers great potential for gains in transparency and efficiency, falls short of original expectations. Table 8. Rating of Project Outcome against Original and Revised PDOs Against Against Revised PDOs Steps Original First & Second Third Overall Rating PDOs Amendments Amendment 1. Rating Moderately Moderately Moderately Satisfactory Unsatisfactory Satisfactory -- 2. Rating value 4 3 4 -- 3. Weight 3.1 Disbursements31 2.5 9.6 17.8 29.9 3.2 Weight 8.4% 32.1% 59.5% 100.0% 4. Weighted value (2) x (3) 0.33 0.96 2.38 3.68 5. Final rating (rounded) - - - Moderately Satisfactory Note: The values corresponding to each rating are: Highly Satisfactory = 6, Satisfactory = 5, Moderately Satisfactory = 4, Moderately Unsatisfactory = 3, Unsatisfactory = 2, and Highly Unsatisfactory = 1 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development: Through the promotion of effective public sector management, the operation has had a positive impact on poor and vulnerable groups. Specific achievements in this area include improved access to information through e-government mechanisms, improved targeting of social programs through improved M&E; implementation of social accountability mechanisms to give "voice" to citizens to hold the state accountable; and provision of value-added services through a more effective institutional framework, including better information for decision- and policy-making and for program planning. In addition, the operation has supported interventions with a particularly high impact on the poor and vulnerable sectors of the population. For example, the adoption of ISO standards for the services provided by ANSES' field offices has benefited the elderly, resulting in significant reductions in waiting time, provision of adequate seating, and other important service improvements. Another intervention with a particularly significant impact on gender and social development issues was the design and implementation of Community Justice Centers, community information centers targeting the poorest segments of the population, particularly women. (b) Institutional Change/Strengthening: The project has made substantial progress in modernizing key horizontal management tools. As a result, it has drawn policy makers' attention to the potential 31 Disbursements at the time of restructuring are based on amounts reported in the supporting Memorandums to the Presidents. Discrepancies with disbursements listed on Table G might arise from funds that had been transferred to the project's Special Account but were not actually committed. 32 benefits of further strengthening public management. The operation's institutional impact can be summarized as follows: Citizens' Charter Programs: The implementation of Citizens' Charter (Cartas Compromiso) constitutes a robust step toward the development of social accountability mechanisms. Human Resources Management: The diversity in terms of labor regimes (i.e. selection mechanisms and criteria, benefits, salaries, and career systems) within Argentina's public sector workforce has several negative impacts aside from inequity, including adding substantial complexity to the rationalization of human resources and efforts to link pay to performance, and workforce placement according to organizational needs. Thus, the partial harmonization of selected public employment regimes attained under this operation is an important step toward the improvement of the quality of public sector performance and a more equitable and satisfactory treatment to the entire government workforce. In addition, the creation of an electronic registry for SINAPA employees and another one for consultants has resulted in a substantial improvement in the statistics on the public workforce. E-government: At the macro level, the national plans are improving the level of information quality needed to support an efficient and transparent government and to strengthen policies toward citizen participation through more efficient and transactional government services. The national portal developed by the ONTI, for example, provides important information on services and governance processes with pilots on transactional services that will allow the citizen to initiate, track, and finalize a request online. This portal includes the Proceedings Guide, which aims at helping citizens to access updated standardized information on the services and proceedings provided by national government agencies. As a result of the continuous work of the ONTI on improving the e-government environment, public sector modernization in Argentina is moving towards a more integrative, reliable, widespread, and secure governance. By facilitating the systematic interchange of social and fiscal information among participating agencies, SINTyS has contributed to the enhancement of social programs and to the reduction of tax non-compliance. With SINTyS support, agencies are now better equipped to detect, among others, incompatibilities regarding the assignation of social benefits, overlaps in health coverage, employment status, thus providing the necessary elements to determine beneficiary eligibility. In the case of pensions and retirement benefits, SINTyS has permitted the early detection of deceased beneficiaries, stopping payments upon their death. Likewise, systematic exchange of fiscal information across national and provincial registries, including property, income, and tax information, has been vital to detect tax non-compliance, ultimately contributing to increasing efficiency, transparency and equity in tax administration at the national and provincial levels. Finally, SINTyS is becoming a valuable input in policy formulation and in the design of new social programs, particularly those under the CNCPS. Procurement: The consistent use of a good electronic information system by a growing number of government procuring entities using a single portal will lay the groundwork for important efficiency gains and lower prices and transaction costs for government procurement through increased competition, reduction in processing time, and streamlined procedures. It would also facilitate the ability of existing or new firms, especially small and medium-size enterprises that are not currently doing much business with the government, to successfully offer their goods and services, and eventually works, if the law is expanded to cover all aspects of procurement. State Modernization at the Subnational Level: Several provinces have also identified e- government as the collaborative environment to deliver the objectives under the Public Administration Management Program and under the Fiscal Responsibility Law and to promote replicability and scalability of systems. While only agencies at the national level are required to comply with ONTI's national plans, provincial governments are increasingly adopting them voluntarily, including enacting e-government decrees similar to the ones at the national level and establishing an e-government coordinator figure to improve integration, coordinate information flow and quality, and reduce costs incurred by maintaining several different standards. The 33 provinces of Mendoza, Cordoba, Salta, and Santa Fe are among the provinces exhibiting greater public sector integration as a result of their adoption of e-government. The improvement of information quality at the national and sub-national levels has also benefited from the coordination of the National Fiscal and Social Identification System (SINTyS) with the ONTI and the use of the National Plan for E-Government. When the project began in 1998 with the aim of improving information quality in social and fiscal programs by establishing an institutionalized information exchange system at the national, provincial, and municipal levels, national standards were poor and not enforced. Today, as a result of providing data standards and a security framework to national and provincial data exchange nodes based on a common ICT platform, information quality has improved substantially, in particular in the social and fiscal sectors. (c) Other Unintended Outcomes and Impacts: There were several valuable­albeit unintended-- outcomes that resulted from this operation, including: i) maintaining alive the policy dialogue on state modernization between the authorities and the Bank in the aftermath of the 2001 crisis alive; ii) strengthening civic engagement, particularly through the implementation of the e-government application to facilitate the interaction between government and citizens; iii) increasing the awareness of the need for state modernization among top government officials and civil servants through debates, pilot programs and training that were conducted in several line ministries, as well as highly visible national and international conferences; iv) strengthening the coordination role of the CCO vis-à-vis other institutions; v) expanding the scope of the modernization efforts to also address the needs of the private sector; and vi) most importantly, under the Third Amendment, to put the state modernization issues higher on the agenda, through high-level conferences, seminars, publications, and a deepened dialogue with stakeholders etc. This area of intervention was added in 2006 in response to the GoA's new emphasis on supporting private sector development. Seed money was allocated to the formulation of strategic plans and programs, thus strengthening the recently established investment promotion agency (Prosper-Ar). 4. Assessment of Risk to Development Outcome Rating: Moderate Several factors suggest that the progress made under this operation is likely to be sustained, including: Enabling legal framework: The legal framework provided by laws and decrees on digital signature, e-government, human resources management and procurement, among others, makes the sustainability of project outcomes more likely, as it provides the normative framework to move forward with development and implementation of these public sector management tools. Substantial advances in institutionalization: The recent upgrade in rank of the Office of Undersecretary of Public Management to Secretariat provides greater institutional weight to the modernization efforts supported under this operation. Likewise, the creation of the State Modernization National Directorate in 2005 and the SINTyS National Directorate in 2007 constitute important steps in the institutionalization of the state modernization efforts. The creation of these agencies as permanent entities within Argentina's public sector also denotes strong support for the modernization efforts on the part of Argentinean authorities. Maturity in the modernization efforts: Unlike in 2001, when modernization efforts were still incipient, the modernization program is now more mature. Specifically, key actors such as the Secretariat of Public Management as well as ONTI, SINTyS and other actors in the modernization agenda, are widely respected at the national and provincial levels of government, as they have gained a reputation as credible brokers by playing a neutral, technical advisory role 34 in supporting reforms and institutional strengthening that can be difficult to implement. Likewise, the management tools developed and implemented under the project have yielded tangible results when applied by individual agencies and are now intrinsic tools in their daily operations. Finally, the incremental, results-based strategy adopted by the GoA in the last stage of project implementation has proved to be effective in gradually advancing modernization efforts across a highly diverse universe of government agencies at the national- and sub-national level. Continuing Bank support: The Second State Modernization project (Loan N. 7449-AR) will consolidate and expand the achievements in the different cross-cutting public sector management areas (M&E, e-government, procurement, human resources management and citizen-centered accountability) as well as strengthen the Chief of Cabinet Office's strategy, organizational structure and coordination capacities to ensure the full institutionalization and consolidation of the different management tools implemented under this operation. Likewise, the Second SINTyS Project will continue to provide support to the expansion and consolidation of SINTyS, focusing particularly on ensuring the development of sound governance, data quality, technological and security frameworks. Transfer of tools to individual agencies: In those areas that will not be supported under the follow-up operations, such as Community Justice Centers, institutional support to the IGJ, and the Education Cost Observatories, transition arrangements have been implemented during 2006 and 2007 to ensure that the capacities, methodologies and tools developed under the operation were fully transferred to the corresponding authorities. In the case of the Community Justice Centers, three out of four pilots are now in the hands of the corresponding municipalities, which run them autonomously. The system developed for the IGJ has been incorporated into the agencies' current procedures. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory The performance of the Bank's team responsible for assisting the Borrower in identifying, preparing and appraising the operation and the subsequent amendments is deemed Moderately Unsatisfactory. While the Bank's team correctly identified valid areas of intervention (i.e. addressing the Y2K problem) and windows of opportunity (i.e. the GoA's decision to tackle state modernization in a comprehensive manner in 2000 and in a more incremental one in 2003), it also underestimated key risks that severely undermined the feasibility of the actions being supported under the operation. The more critical risk assessment failures, which are discussed in detailed in Section 2.1 ­ Quality at Entry, can be summarized as follows: i) failure to identify inadequate implementation arrangements for addressing the Y2K problem, including lack of authority of the PIU and the weak implementation capacity of some government agencies; ii) failure to properly assess the impact of the departure of the Vice President in 2000, who championed the state modernization program; and iii) failure to assess the impact of the rapidly deteriorating macroeconomic and political environment on the state modernization program in 2001. (b) Quality of Supervision Rating: Satisfactory Overall, the Bank's supervision for this operation is deemed Satisfactory. Aide Memoirs, Back-to- Office reports and Project and Implementation Status Reports (PSRs and ISRs) demonstrate a close supervision, in which the Bank's team maintained a close working relationship with the PIU and 35 from 2005, with SINTyS' PEU as well. However, performance and progress monitoring, including the use of key indicators was weak, particularly during the first phase of implementation (Y2K program) and after the Second Amendment. As mentioned above, the operation's Results Framework was mainly based on output indicators, which provided a good roadmap with milestones that helped monitoring project progress but, at the same time, were insufficient to assess the operation's impact. This weakness was reverted to the extent possible during the last two years of project implementation by, among other actions, identifying additional indicators, developing a new project M&E system in conjunction with the PIU and other counterparts, and working together with the counterparts in the individual agencies to ensure greater M&E and a greater focus on results, as well as greater project institutionalization and sustainability. Factors beyond the Bank's influence made supervision efforts particularly difficult, including: i) high turnover, both at the highest levels of government, professional staff and at the PIU; ii) changing government priorities; and iii) extended periods of inactivity or slow implementation. During the more difficult times, particularly in the aftermath of the 2001 crisis, the Bank's supervision focused mainly on maintaining the state modernization efforts alive. Since the last Amendment, in line with the joint responsibility at the government level, two task managers have shared responsibility for project supervision (one for the State Modernization Components and one for Component H - SINTyS). This separation of tasks worked out well, as it provided full independence to the two implementing government agencies and allowed for close supervision by specialized Bank staff in each substantive area. During the last two years of implementation, the Bank's teams focused on deepening client engagement and identifying further opportunities for state modernization by actively promoting dialogue with key government actors at the national level through bringing in best practices, key international experts, conferences and seminars and visits to Washington, as well as expanding the demand for state modernization reform at the CCO and in other government institutions by deepening the dialogue on existing areas and new agenda-setting on additional areas. In the case of both State Modernization and SINTyS, the dialogue was also promoted at the subnational levels. In addition, policy dialogue was deepened by exposing key government actors to cutting-edge international experience through study tours (i.e. a study tour to Chile to study their M&E system, one to Korea to learn from its e-government system, and another one to Spain, Belgium and Latvia to learn from their information exchange systems) and conferences (i.e. two International State Modernization Seminars that were attended by key actors from different countries, including former Presidents, academics and senior public sector officials). These efforts set the groundwork for the development of two robust follow-up operations (i.e., State Modernization II and SINTyS II). In this regard, it is worth mentioning that the Quality at Entry Assessment for the State Modernization II specifically highlighted the quality of the operation's technical analysis. Finally, as mentioned before, the Bank deepened the dialogue with government to incorporate a greater focus on results, and help build greater project sustainability and institutionalization. (c) Justification for Rating for Overall Bank Performance Rating: Moderately Satisfactory Overall Bank's Performance is deemed Moderately Satisfactory for the reasons stated above and the following considerations: It is worth noting that the Bank effectively integrated this project with other operations in the Bank's portfolio, creating positive synergies within the portfolio and contributing to their mutual strengthening. Specifically, the following operations were closely related to this operation in terms of either their focus or mutually reinforcing support: ANSES TAL I & II (Loans No. 4131-AR 7318- AR), SINTyS operation (Loan No. 4459-AR), FOSIP TAL (Loan No. 3958-AR), Governance 21 (appraised but not yet presented to the Board), the First and Second Provincial Development Loans 36 (Loans No. 3280-AR and 3877-AR) and the First Structural Adjustment Loan (Loan No. 7075-AR; SAL-I). Approved in 2001, the SAL-I was particularly important, as it helped individual government agencies, such as ANSES, maintain focus on state modernization during the 2001-2002 period and prevent the reversal of the progress made so far during a period of utmost political and economic upheaval. The Bank favored flexibility over orthodoxy when it: i) drastically restructured the operation to support the state modernization agenda of the de la Rua administration; and ii) incorporated the SINTyS component to overcome the tight availability of financing under the 2004-2005 CAS envelope. In this context, it is important to bring attention to the particularly challenging country conditions and the fact that both actions were approved by the Board. While the decision not to cancel the operation in 2002 can be debatable, it is clear that maintaining the operation alive served to continue dialogue with mid-level government officials during a period when other channels of communication between the Bank and the GoA were closed. Eventually, this decision served to ensure the continuity of state modernization efforts, albeit with a more reduced scope. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory The government's performance and commitment has been highly uneven. As discussed above, while some administrations provided reasonable support to the Project, other administrations were largely indifferent toward its implementation. Even during periods of reported political support, the Government exhibited little agility in its internal approval procedures, which generated unnecessary delays in the implementation process. While the 2002 State Modernization Program correctly diagnosed the main weaknesses of Argentina's public sector and devised the conceptual blueprint for the modernization program, it is important to stress that the merits for the progress achieved in the areas of state modernization under the operation have to be attributed primarily to efforts done from 2003 onward. Likewise, SINTyS authorities have demonstrated their unwavering support for Component H since its inclusion in this operation. (b) Implementing Agency or Agencies Performance Rating: Satisfactory Overall, the performance of the two implementing agencies (i.e. the one responsible for state modernization components housed in the Chief of Cabinet Office and the one responsible for Component H ­ SINTyS located under the CNCPS) is rated satisfactory. State Modernization Components: Satisfactory. As mentioned earlier, during the Y2K phase, the Project Implementation Unit (PIU) lacked the mandate and the political power needed to adequately implement the project. The PIU was substantially strengthened later on, exhibiting sound technical capacity during the preparation of the State Modernization Program in 2000. The State Modernization Secretary, which was then responsible for the operation, recruited top-notch professionals, both within the country and abroad to support the design of the state modernization program. For example, the main "architect" of the state modernization reform program had been also one of the architects of Argentina's financial administration system (Sistema Integrado de Información Financiera ­ SIDIF), which was implemented during the 1990s. Support was also received from top international experts from Chile, New Zeeland and the USA, including one of the advisors to U.S. Vice President Al Gore. Not surprisingly, the PIU's technical soundness was unable 37 to compensate for the loss of political support that occurred in mid-2000 with the resignation of Vice President Alvarez. Performance deteriorated sharply in the years after the crisis (2002-2003), when project implementation was virtually stalled. From the end of 2003 until project closing, the PIU was once again staffed with capable and dedicated professionals. Its strong performance during the last three years of the project constituted a drastic turn-around in project management, which, in turn, was a key factor in ensuring the turn-around of the operation itself. The PIU has fulfilled its responsibilities, including monitoring the execution and evaluation of project activities, keeping records of all procurement operations, ensuring compliance with Bank guidelines, monitoring compliance with legal covenants, maintaining records for all activities, preparing and submitting progress reports to the Bank and collaborating with the preparation of this ICR. Moreover, to ensure that the preparation of the Second State Modernization Project fully capitalized on the achievements and lessons learned under this operation, the PIU fully collaborated with the Bank team by incorporating additional indicators and activities. The permanency of some key PIU staff throughout the life of the project was an important factor ensuring a minimum level of continuity despite the frequent changes in administrations. The assessment of an independent audit showed that hiring practices and performance of individual consultants under the operation had been satisfactory. An important institutional advancement was the creation of the State Modernization Project Directorate in 2005. Housed under the Chief of Cabinet Office, it is responsible for coordinating the implementation of state modernization efforts. Since then, the PIU has been fully integrated within the Directorate. Component H ­ SINTyS: Satisfactory. The SINTyS Project Executing Unit is composed of a group of top-notch professionals, with sound expertise not only in ICT but also in the structure of Argentina's public sector and the wide array of social programs and fiscal entities operating at the three levels of government (i.e. national, provincial, and municipal). They have been a key element in the success of SINTyS' expansion, not only among agencies at the national level but also at the provincial level. Their proactive and cooperative approach has been key in overcoming institutional barriers and resistance on the part of other government agencies. (c) Justification for Rating for Overall Borrower Performance Rating: Moderately Satisfactory The overall performance of the Borrower is rated moderately satisfactory on account of the erratic behavior on the part of the Borrower over the life of the project. Once again, it is important to point out that overall Borrower's performance from 2003 onward has been critical to the operation's success, as the political support for the modernization efforts was rekindled, the factors threatening the success of the project were successfully addressed, and project implementation took renewed momentum. Likewise, in the case of SINTyS, the Borrower has exhibited both consistent political support and sound technical and institutional capacity, which accounted for the successful implementation of Component H. 6. Lessons Learned Lessons of general application Context matters: The project's implementation was severely affected by the unstable macroeconomic conditions that prevailed in the late 1990s and eventually resulted in the country's collapse in December 2001. By keeping the operation alive in the aftermath of the crisis, the Bank succeeded in maintaining modernization efforts on the public agenda, although actual progress was initially very slow. The objective of state modernization: State modernization is not an objective in itself but a means to help the state to carry out its functions, primarily in service delivery and facilitation of private sector 38 development. It is, therefore, important to combine state modernization efforts aiming at improving the inner workings of the state with efforts to improve areas that are also relevant to individual citizens and businesses, such as enhanced provision of services and actions aimed at private sector development and investment promotion. Likewise, it is important to balance fiscal and qualitative impacts. The pace of reform: The process of altering the structure and functioning of the public administration to ultimately increase the efficacy, efficiency, and transparency of the state is, by nature, an arduous and long-term process. In this context, it is important to fully capitalize on windows of opportunity for drastic change and to "keep going" during periods when only incremental and gradual change is feasible. As demonstrated by Argentina's experience since the crisis, public sector modernization can also be tackled gradually, in strategically chosen areas that build upon and scale up early results. This implies an incremental approach that envisages public sector modernization as a series of carefully sequenced and targeted series of steps, seizing windows of opportunity in those areas where government ownership is high. The importance of being strategic: Although, as discussed above, this operation has demonstrated the merits of supporting gradual, incremental state modernization efforts, it also calls attention to the need to be strategic, focusing resources on those areas with the greatest potential impact. Otherwise, there is the danger of dissipating efforts and making the implementation process overly complex. Legislation is not enough: The experience under this operation indicates that the existence and even passage of enabling legal and institutional frameworks does not ensure actual state modernization. Although Decree 103/2001 provided a solid foundation to much needed public sector reforms, it was unable to overcome the resistance and intrinsic difficulties of implementing them. Only after the 2001 crisis drastically changed the system of incentives due to, among other factors, the severity of fiscal conditions, it became possible to move forward on the arduous and long path of state modernization. Balancing "vertical" and "horizontal" reforms: The successful reforms of ANSES and AFIP indicate that reform-minded leadership is a condition sine qua non for the implementation of "vertical" reforms that profoundly transform individual agencies. However, there is also a need for "horizontal" reforms with a cross-cutting impact throughout the public sector. There are areas of public sector modernization that specifically call for horizontal reforms, including: a) the modernization of government-wide systems, like financial administration, procurement, and human resources management; b) when there is a need to establish "rules of the games" to guide the efforts of individual agencies to ultimately minimize inefficiencies and maximize synergies, such as in the case e-government; and c) the development of management tools that can be applied by individual agencies across the public sector to ultimately capitalize on the potential for horizontal fertilization and economies of scale. Entry-points for state modernization: It is important to identify and expand "entry points" to build up consensus for broader reform. As shown by this operation, such consensus can be increased through the combination of both "supply-side" reforms, such as institutional and capacity strengthening, and "demand-induced" reforms, through engagement with civil society and the private sector. Likewise, entry-points for state modernization do not necessarily have to be of a fiscal nature, and can be more oriented towards improved service-delivery, greater trust in government and other areas. 39 Capitalize on the potential of ICT tools: Information and communication technology (ICT) can effectively improve public management, service delivery, as well as enhance effectiveness of poverty reduction programs and tax evasion. Project-specific lessons Pragmatic client engagement: As illustrated by this operation, it can be very challenging to strike a balance between what is technically best and what is politically feasible. To maintain and deepen client engagement, the Bank may agree to technically less ambitious but politically more feasible interventions with the understanding that such a pragmatic approach can impact closely the policy dialogue over the short and long term. One of the trade-offs here might also be a greater focus on outputs than on outcomes in light of the existing government commitment on new areas, rather than not supporting certain areas at all. Trade-offs typical of public sector TALs: As illustrated by this operation, public sector technical assistance operations are often confronted with a trade-off between, on the one hand, ensuring a solid project design that allows for clear ex-post evaluation (standard project paradigm) and the desire, on the other hand, to stay closely engaged with the client as the state modernization agenda evolves, as it often does, in a non-linear, stop-and-go manner. Privileging the latter almost inevitably leads to a complex end-product that is not well suited for traditional ex-post evaluation. While there is no simple answer to this tradeoff, it is important to take into account when evaluating the impact of operations of these characteristics. Modernization of subnational governments: This operation has demonstrated alternative ways to transfer the institutional and technical know-how developed at the national level. It has done so through direct institutional support but also by demonstration, as illustrated by the voluntary adoption of national standards and legislation by provincial governments. Proactive Client Engagement: Engagement rather than disengagement can often be more effective in producing the desired changes. As shown by the ongoing project, demand for the greater reforms can be induced by pro-active engagement, such as by sharing international practices and fostering continuous dialogue among stakeholders on key issues, helping build coalitions of change. Coordination is vital: The substantial achievements in the area of e-government have been possible to the cooperation and coordination exhibited by ONTI and SINTyS. In particular, the SINTyS' infrastructure platform responds to ONTI's E-Government plan and the corresponding interoperability and security frameworks. In addition, ONTI and SINTyS have collaborated in the development of data standards, as this is an area in which their responsibilities overlap. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies (see Annex 7 for the full text of the GoA's comments) The GoA has provided its comments, summarizing its views with respect to both the operation and the ICR. With respect to the operation, the GoA stresses the importance that it has had in all stages of implementation in: i) averting Y2K disruptions as originally designed; ii) providing a conceptual framework for state modernization under Amendments 1 & 2, despite the fact that the proposed modernization strategy overly emphasized fiscal issues; and iii) most significantly, advancing toward state modernization in areas that are key priorities for the GoA under Amendment 3. With respect to the ICR, the GoA suggested higher rating regarding the ICR's rating of Moderately Satisfactory for the operation's overall performance, which, in turn, is based on ratings Moderately Satisfactory, Moderately Unsatisfactory, and Moderately Satisfactory for the periods before, during, and after the First and Second Amendments, respectively. Instead, the GoA considers that an overall rating of 40 Satisfactory more appropriately reflects the operation's achievement, based on ratings of Moderately Satisfactory, Moderately Satisfactory and Highly satisfactory for the periods mentioned above. In addition, the GoA expresses its views on some of the analysis presented by the ICR in terms of the overall achievement of objectives and observations regarding, among others, the lack of focus in the reform efforts and delays in the presentation of procurement documentation after the operation's closing. The full-text comments submitted by the GoA are included in Annex 7. (b) Cofinanciers: N.A. (c) Other partners and stakeholders: N.A. 41 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Actual/Latest Components Appraisal Estimate Percentage of (USD millions) Estimate (*) (USD million) Appraisal A. (a) Support Activities and (b) Remediation and Rescue 28.2 2.5 9% B. Project Coordination 2.1 3.8 179% C. Modernization of Public Sector 0.5 D. Streamlining the Macro-Structure 0.2 E. New Public Management Model 10.5 F Reform of Key Agencies 4.4 G. Provincial Government Reform 0.5 H. Social and Fiscal National Identification System (SINTyS) 7.9 Total Baseline Cost 30.3 30.3 100% Physical Contingencies 0 0 0 Price Contingencies 0 0 0 Total Project Costs 30.3 30.3 100% Front-end fee PPF 0 0 0 Front-end fee IBRD 0 0 0 Total Financing Required 30.3 30.3 100% (*) As of June 19, 2007, disbursements amounted to US$29.9 million. However, the GoA had requested that the grace period be extended until June 30, 2008 and expected to disburse the totality of the loan proceeds, as shown on this table. (b) Financing Appraisal Actual/Latest Source of Funds Type of Co- Percentage of financing Estimate Estimate (USD million) (USD million) Appraisal Borrower 13.0 9.8 86.5% International Bank for Reconstruction and Development 30.3 30.3 100% 42 Annex 2. Outputs by Component Original Components (Y2K Project) A & B. Support Activities, Remediation and Rescue Preparation and monitoring of 127 action plans for remediation and rescue activities associated with potential systems' disruptions. Preventive Y2K measures adopted by identified agencies, including banking, air traffic control, and delivery of basic public services. Dissemination of information on Y2K preventive measures, training, program evaluation, and technical assistance. First Amendment - Additional Components C. Modernization of the Public Sector Design of a State Modernization Program, which sought to improve the effectiveness, efficiency, and transparency of the national administration. Second Amendment- Additional Components D. Streamlining the Macro-Structure of the National Government Studies on the macrostructure of the national government, incl. organizational studies, procedures studies, and sectoral studies. Discussions held among technocrats to build consensus for a comprehensive state reform strategy. E. Creation of a New Public Management Model Outputs for this component are detailed under the Third Amendment. F. Reform of Selected Programs in Key Public Agencies and Decentralized Entities (2001-2003) Reform roadmap for ANSES completed by May 2002. Management tools developed under the operation (Citizens' Charter, Annual Performance Agreements, streamlining of administrative procedures) were tested in ANSES and eventually became core management tools within the agency. Similarly, the operation served to support reform efforts within AFIP through technical support for the development of strategic plan and the implementation of management tools. Although technical assistance was provided to the Ministry of Education, no significant outcome was achieved, except the implementation of Cost Observatories for the systematic comparison of education- related costs across provinces. G. Promoting Provincial Government Reform Outputs for this component are detailed under the Third Amendment. Third Amendment ­ Continuing and Additional Components E. Creation of a New Public Management Model E. 1. Management by Results and Citizens' Charter Programs(CCP) Introduced a results-based management culture in key institutions with 29 public agencies with active strategic plans linked to their budget allocation and operational plans. Strategic plans were developed or updated for 27 national agencies. Conducted management assessments in five key agencies in order to define future institutional reform needs. Provided improved information for decision-making through information systems for ex-ante and ex-post evaluation. Citizens' Charters are implemented in 50 agencies, representing 90 percent of service-delivery agencies in the national government. More than 100 quality standards have been established for about 900 products and services covered under the CCP. User surveys and focus groups in the participating agencies show improved service delivery in 80 percent of the cases. Twelve agencies have adopted Citizens' Report Cards to systematically collect feedback from users based on their perception of the quality level of the services received. Another 35 agencies have implemented call centers or other mechanisms to receive users' complaints. Five provincial governments sought support to replicate Citizens' Charters in 10 provincial agencies in 2007. Establishment of the Under-Secretariat of Budget Coordination and Evaluation at the CCO in 2003, exercising functions of coordination, evaluation, and monitoring of the national strategic policies. E. 2. Human Resources Management The public employment framework law (Law No. 25,164) was enacted in 1999, but it lacked the corresponding regulatory and administrative framework, as the corresponding implementing decree, which 43 was signed on the last day of the Menem administration (December 9, 1999), was subsequently repealed under the de la Rua administration. This legislation is now regulated by Decree 1421 of August 2002, and administrative resolution SGP No. 48/02, which establishes new rules for fixed-term contracts. Work has begun on developing a uniform job classification and salary scheme for gradual application across the central administration. A new collective agreement, sanctioned by Decree 214/06 signals the intent to unify 12 of the 34 labor regimes, and a schedule for negotiations through 2011 has been set up. The Public Employment Office (ONEP) has nearly completed a registry of all contracted employees. In addition, progress has also been made in bringing the system of individual contracts in line with the principles of the civil service law. Progress include ONEP's review of all contracts with salaries over Arg.$2,000 a month to ensure the candidate is qualified for the job, and the transfer of 15,000 contracted employees to a regime that imposes salary ceilings, but also gives them additional benefits (Decrees 1421, 707/2005 and 2031/2006). The remaining 20 percent (under Decree 1184) generally hold shorter term but better paying appointments for highly technical work. The previous system of "transitory" status, is gradually being faced out. The merit-based career system for National System of Administrative Professionals (Sistema Nacional de Profesión Administrativa ­ SINAPA) has been strengthened. As SINAPA is the most important human resources regime, covering over 20 percent of civilian employees within the central administration, this represents a significant step toward the creation of a single, merit-based civil service system. The ONEP, in conjunction with ONTI, has developed a Central Civil Servants Registry (Sistema de Registro de Personal y Evaluaciones - SIREPEVA), which covers all SINAPA employees. The registry is available on the government's intranet for consultation and continuous updating by public official. This constitutes an important step toward the development of a single database and standardized personnel files for all national public employees. Statistics on the public workforce have improved in coverage and quality as the result of these two electronic personnel registries. Together, these two registries cover approximately 19 percent of all employees (civilian and armed forces) within the central administration, as SINAPA and contracted employees represent approximately 10 and 9 percent, respectively. Strengthened the merit-based career system SINAPA, including the creation of a Central Civil Servants Registry (SIREPEVA), covering SINAPA employees that represent over 20 percent of national Government employees. Registry available on the Web for consultation and continuous updating. E. 3. Training More than 20 e-learning courses have been developed, addressing the specific training needs of government agencies, including electoral committees (mesas electorales), financial administration, e-government, Citizens' Charters, conflict resolution, and tourism. A total of 6,150 public employees have been trained using e-courses by 2007 (compared to a target of 2,000). E. 4. E-Government The creation of the National Information Technology Office (Oficina Nacional de Tecnología de la Información - ONTI) in 2002 constituted a major cornerstone in the development of e-government in Argentina, as it has provided a new systemic view for e-government development. The development and implementation of a National E-Government Plan that provides a common policy framework for e-government and ICT development and integration in the public administration. This Plan is based on findings of an assessment of the use of ICTs at the national level carried out by the ONTI. The development of a new government portal (http:www.argentina.gov.ar), which provides general information about the country and the national public administration and its structure, as well as information particularly targeted to citizens, businesses, and foreigners (information for foreigners is available in English). The Digital Signature (Law N° 25.506), which was enacted in December 2001, establishes the obligation of the national Government to implement this technology within five years and apply it to all the laws, decrees administrative decisions, resolutions and rulings from the national public sector. The digital signature is vital for the further digitalization of administrative procedures, as it enhances security in internal communications by guarantying the identity of the signer and the integrity of the message.32 ONTI is the designated technical administrative body responsible for granting the licenses to the certificate service providers and supervising its activities. The Registration Authority has been delegated to the respective jurisdictions. In addition, several pilot applications for digital signature have been implemented in the Ministry of Economy and Production, the Judicial Power, and the General Justice Inspection Office. 32 A digital signature is a set of data associated to a digital message that guarantees the identity of the signer and the integrity of the message. A digital signature does not imply to assure the confidentiality of the message; a document digitally signed can be visualized by other people, the same as when it is signed holographically. A digital signature is an instrument with technical and legal characteristics. This means that there are technical procedures that allow the creation and verification of digital signatures and there are regulatory documents that support the legal value that such signatures have. 44 A response unit was created that centralizes and coordinates the government efforts to manage security attacks or potential breaches. A forum for IT personnel was launched to promote internal knowledge sharing and collaboration. E. 5. Administrative Procedures The new government portal also hosts an electronic directory of government procedures (the so-called "Portal de Trámites"), which includes over 750 procedures (trámites) within the central administration, 50 of which can be processed electronically. This achievement amply exceeds the original target of 400 procedures, and 10 electronic ones. Based on the information provided by individual government agencies, the portal describes in detail the steps and requirements associated with all government services procedures. The largest number of inquires corresponds to passport and national identification documents applications and renewals. Efforts to streamline administrative procedures focused mainly on supporting the efforts of individual agencies to adopt ISO norms (i.e., the Quality Management Standard developed by the International Organization of Standardization - ISO) as a way to improve the quality and efficiency of 13 procedures, many of them focusing on attention to the public. ANSES is one of the agencies that have adopted ISO norms to enhance their customer service processes. In particular, ANSES has obtained ISO 9001:2000 accreditations for two of its call centers and for the quality customer service procedures implemented in all its field offices. E. 6. Procurement Support was provided for the design of a new procurement law (Law No. 1.023), which was enacted in 2001. It incorporates higher standards of transparency and an emphasis on competitive procedures for the national government. The failure to issue a sound set of supporting implementing regulations, documents and guidance has limited the potential impact of this legislation. The law does not cover public works The National Procurement Office (Oficina Nacional de Contrataciones - ONC) has developed a procurement portal (http:www.argentinacompra.gov.ar) and an e-procurement system (Sistema Electrónico de Contrataciones Públicas - SECOP) for small purchases below US$3,000. SECOP was recently launched through a presidential decree and ONC expects that, once tested, it can be extended to apply to larger size purchase in several stages. Furthermore, the government is taking significant steps to integrate SECOP with other public sector management systems, most notably the country's integrated financial administration system. By the end of 2007 the procurement portal had received the sizeable amount of 1.1 million visits. Despite the progress made so far, however, SECOP is only being used by roughly 5 percent of the national administration. A registry of suppliers has been created, with approximately 18,000 suppliers and a list of reference prices-- some of these reference prices, which are established by the National Contracting Office, only have informational value. Part of the documentation required from vendors is held by other agencies (e.g., AFIP); obligatory use of lists of standard prices (precios testigos) determined by SIGEN. Advances have been made in standardizing procurement documents and publicizing procurement processes on the Internet, especially the announcement of proposed procurement opportunities, better accessibility to bidding documents, and notification of the final awards. However, only 5 percent of procurement plans are currently being advertised publicly per year. F. Reform of Selected Programs in Key Agencies & Decentralized Entities (2004-2007) F. 1&2. Monitoring and Evaluation Systems Developed and tested prototype of a control panel in the Ministry of Labor, Employment and Social Security for M&E of plans, programs, and projects. By the end of 2007 SIG prototypes had also been implemented in the Ministry of Justice, the Undersecretary of Emergencies of the City of Buenos Aires, and partially at the National Senate and the National Statistics Entity (INDEC). Developed a new methodology for impact evaluation at the Ministry of Social Development. Agreements for implementation of SIG in municipal governments were signed with the Ministry of the Interior. F. 3. Design System for Public Physical Assets Asset Management "Module" was designed. Analyzed legal, technical, institutional, financial, and economic variables and the interactions in asset management framework. Conducted initial inventory of public physical assets. Tested application of system in selected entities. F. 4. Community Justice Centers Four Community Justice Centers established, operating with agreed upon standards. Sustainability of the Justice Hall Model assessed. 45 F.5. Strengthening of the Justice General Inspectorate Re-engineered processes to transfer corporations' financial information. Scanned and digitalized accumulated stock. G. Promoting Provincial Government Reform Organized seminars and conferences with representatives of different provinces to facilitate knowledge sharing and promote the dissemination of best practices Assisted in the implementation of different management tools (Citizens' charters, procedures guide, etc) in several provinces. By end of 2007 working agreements had been signed with 23 provinces to transfer technical skills, raise awareness on public management tools, and continue to work on the basis of a province-specific agenda. H. SYNTyS H. 1. Improvement of Social Services Benefits from this sub-component are estimated at approximately US$57 million during 2006 and 2007, arising from the detection of ineligible beneficiaries in social programs at both national and provincial levels. As of November 2007, 99 percent of the population without coverage was properly identified, compared to an original target of 95 percent. By contributing to enhance data quality and identification of population without health coverage, SINTyS has contributed to the identification of individuals with double coverage as well as the formulation of social programs expanding health coverage among the more vulnerable sectors of the population. The digitalization of civil registries has contributed toward enhancing the quality of information on vital facts for the population (i.e. birth, marriage, divorce, children, and death), which is not only for the accurate identification of individuals per se but also of their family relationships, which often constitute the basis for the granting of social benefits. So far, efforts have focused on 13 provincial civil registries (compared to an original target of four registries), resulting in the identification of family relationships for 3 million individuals (equivalent to approximately 9 million family relationships). SINTyS has provided support to the Ministry of Science and Technology in its efforts to develop computerized information systems on the student population, the so-called Single Student File (Legajo Único de Alumnos ­ LUA), within each provincial jurisdiction, thus filling a serious void regarding the identification of minors (i.e. less than 18 years of age) and their educational history. Likewise, SINTyS data is being used by the CNCPS as an input in the design of social programs. So far, LUA systems have been already developed in 14 provinces, resulting in the registry of more than 4.3 million students (equivalent to 43 percent of the country's student population compared to an original target of 55 percent). H. 2. Improving Fiscal Efficiency Benefits in the fiscal component resulting from reducing tax non-compliance, including the detection of tax fraud, arrears and evasion, have amounted to approximately US$5.4 million between 2006 and 2007. The majority of provincial registries of juridical persons (e.g., corporations, limited liability companies, cooperatives, etc.) do not have their data available in electronic form. This situation makes it difficult to identify juridical persons in an accurate and timely manner and access key information regarding their operation, such as their constitution, dissolution, mergers, and registry of authorities. So far, efforts to "virtually consolidate" these registries have focused on 6 provinces. Electronic information is currently available for approximately 41 percent of the overall universe of juridical persons, compared to an original target of 45 percent. Provincial registries of deeds are highly uneven in terms of their modernization efforts, with some provinces utilizing state-of-the-art computerized systems while others still have fully manual systems. The adoption of modern technologies in these registries is key not only for improving the functioning of the registries themselves but also for enhancing the linkages between provincial property registries, cadastre systems and tax administration systems, which are vital for property tax collection. So far, efforts to "virtually consolidate" these registries have focused on 10 provinces. Deed and ownership information (i.e. deed registration, proprietor, and inhibitions) is currently available in electronic form for approximately 61 percent of all residential properties in the country based on the 2001 census, compared to an initial target of 65 percent. Concomitantly, SINTyS has also supported efforts to develop a virtual inter-jurisdictional registry of property owners and deeds inhibitions (Red Inter-jurisdiccional de Inhibiciones y Titulares de Dominio) to, among other benefits, facilitate the application of commercial justice. SINTyS has supported the efforts of the National Securities Commission (Comisión Nacional de Valores ­ CNV) to incorporate the tax ID code (CUIT) to all financial fiduciaries. As a result, 100 percent of all financial fiduciaries have been identified with the corresponding CUIT, compared to an original target of 80 percent. As a result of the exchange of information under SINTyS, 90,000 physical and legal entities are now identified with the corresponding CUIT, compared to the initial target of 7,000 entities. 46 H. 3. Technological Framework and Infrastructure The design of SINTyS' interconnection model, including its technological platform, has been completed and successfully tested. Hardware, software and exchange links to be adopted by SINTyS will be selected based on the experience gathered under this operation. SINTyS has supported the development of normalized procedures to be used by participating entities. SINTyS effectively integrates approximately 500 individual databases using uniform standards. Six (compared to an original target of eight) of the 13 SINTyS provincial field offices (SPFOs) are inter- connected online, which is the next stage for SINTyS' decentralization. A Technical Board (mesa técnica) with representatives from AFIP, ANSES and RENAPER33 has been established to help build consensus among the major players at the national level on key technical issues. Support has been provided for the development and implementation of service-oriented applications such as the "One-Stop Institutional Window" (Ventanilla Única de Organismos - VUO), of which six (compared to a target of four) have been deployed in different government agencies, including PAMI. SINTyS and ONTI have jointly defined standards for the most commonly used 30 data categories--i.e., name, address, date of birth, gender, etc.--that are expected to soon be adopted as national standards. H. 4. Organizational, Institutional and Legal Framework SINTyS has established itself as an effective broker of information within Argentina's public sector, promoting the exchange of information across government agencies at the national and provincial levels. There are approximately 200 government entities currently participating in SINTyS, including 24 entities at the national level (incl. AFIP, ANSES and RENAPER), 177 entities at the provincial level, and 11 entities at the municipal level. SINTyS has formalized agreements or is working jointly with several federal councils (consejos federales), including those gathering information from health insurers, housing institutes and property registers from all provincial jurisdictions. SINTyS has also set in motion its expansion process at the sub-national level to progressively incorporate provincial and municipal governments. Currently, all 24 provincial jurisdictions have already subscribed to agreements formalizing their incorporation to SINTyS, of which 13 have established SINTyS provincial filed offices (SPFOs). In addition, there have been significant advances toward the permanent institutionalization of SINTyS within Argentina's public sector. A mayor step was taken in December 2007, when SINTyS was established as a National Directorate under the National Coordination Council for Social Policies (Consejo Nacional de Coordinación de Políticas Sociales ­ CNCPS), reflecting the national authorities' commitment toward the permanent institutionalization of SINTyS within Argentina's public sector. H. 5. Security Framework SINTyS now has in place a security team familiar with the national and regional security frameworks and international security best practices. A common security framework has been developed for all the sub-components and physical infrastructure of the project and physical infrastructure protection is gradually being implemented in all SINTyS locations and hardware connected to the network. The design of the legal framework has been assessed, in particular privacy of information and confidentiality measures. Specifically, Argentina's Habeas Data Law (Law No. 25.326) provides an adequate legal framework for the protection of private information at the national level. There is a close working relationship between SINTyS and the National Directorate of Personal Data Protection (Dirección Nacional de Protección de Datos Personales - DNPDP). SINTyS has actively collaborated with the DNPDP to define access rights to information from individual agencies--the so-called roles and profiles (Roles y Perfiles). In addition, a system is in place within SINTyS to grant access to information to individual agencies according to the roles and profiles defined jointly with the DNPDP. Basic security processes and procedures are in place, including encryption, and physical control environments have been defined and are being implemented. An implementation plan has been defined. SINTyS has been granted registration authority for ONTI's certification of digital signature certification to, in turn, adopt digital signature for its communications (Disposition No. 55/2007 ­ UCP-CNPS). 33 National Registry of People (Registro Nacional de las Personas ­ RENAPER). 47 Annex 3. Economic and Financial Analysis Neither Net Present Value nor Economic Rate of Return was estimated at appraisal. Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending Luis Jose Mejia Sr. Public Sector Specialist LCSPS Task Team Leader (TTL) 1997-2000 Lodovico Tassoni Consultant LCSPS Supervision/ICR Luis Jose Mejia Sr. Public Sector Specialist TTL from 1998 to 1999 Ronald E. Myers Sector Manager ECAPS TTL from 2000 to 2002 Edgardo Mosqueira Medina Sr Public Sector Specialist. LCSPS TTL from 2003 to 2004 Kathrin A. Plangemann Sr. Public Sector Specialist LCSPS TTL from 2005 to present Roberto Panzardi Sr. Public Sector Specialist LCSPS Margarita Andrade Consultant LCSPS Efraim Jimenez Lead Procurement Specialist LCSPT Magali Junowicz Consultant LCSPS Andres Mac Gaul Sr Procurement Spec. LCSPT Carmen Machicado Operations Officer LCSPS Miguel Mercado-Diaz Sr Operations Off. LCSPS Herman J. Nissenbaum Consultant LCSPS Jeffrey James Rinne Public Sector Mgmt. Spec. LCSPS Roberto Adrian Senderowitsch Sr Institutional Dev. Spec. LCSPS Giorgio Valentini Consultant LCSPS Maria Cecilia Zanetta Consultant LCSPS Sandra X. Alborta Language Program Assistant LCSPS 48 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle No. of staff weeks USD `000 (incl. travel and consultant costs) Lending FY98 30.71 FY99 37.48 FY00 2 4.84 FY01 20 98.16 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00 Total: 22 171.19 Supervision/ICR FY98 0.00 FY99 61.31 FY00 30 99.26 FY01 2 7.87 FY02 10 90.51 FY03 13 110.52 FY04 18 123.23 FY05 25 103.71 FY06 36 188.48 FY07 45 246.50 FY08 12 72.04 Total: 191 1103.43 Annex 5. Beneficiary Survey Results N.A. Annex 6. Stakeholder Workshop Report and Results N.A. 49 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Se considera correcta la distinción en etapas del Proyecto entre las versiones "Original", "Primera y Segunda Enmiendas", y "Tercera Enmienda". Representan cambios importantes en los objetivos y prioridades de la ejecución, que fueron en cada caso propuestos por el Gobierno y acordados con el Banco. Sobre el diseño y la preparación. Proyecto Original: aunque se comparte la evaluación de "Moderadamente Satisfactorio", vale resaltar que el Gobierno Argentino sostuvo desde el comienzo que la amenaza del Y2K constituía un fenómeno de incertidumbre y de riesgos por tanto no medibles, lo que fue confirmado por los estudios ejecutados en el marco del Proyecto. Se acordó con el Banco no vincular la ejecución a un inventario previamente definido de intervenciones, de modo que el monto del préstamo surgió de un juicio prudencial según los elementos disponibles en el momento. El mencionado "sobre- dimensionamiento" resultó entonces de la escasa magnitud de la amenaza -tal como fue revelada por la realidad y confirmada internacionalmente-, y no de un error de estimación que ni el Gobierno ni el Banco estaban en condiciones de realizar. El diseño de los subprogramas individuales era parte de la ejecución general, y se estableció en consecuencia un comité específico de aprobación para cada requerimiento de los diferentes Organismos de la Administración Nacional. Ello no suponía "excesos de flexibilidad" ni debilidad en la supervisión, sino que reflejaba ajustadamente la mecánica de ejecución acordada, y permitió realizar las tareas que el Gobierno consideró prioritarias. Primera y Segunda Enmiendas: en este caso la evaluación del ICR se desdobla, calificando la preparación de la Primera Enmienda como "Moderadamente Satisfactoria" y la de la Segunda Enmienda como "Insatisfactoria". El Banco atribuye los defectos en el diseño, en especial de la Segunda Enmienda, a la inadecuada consideración de la falta de apoyo político a las reformas planteadas, y de las condiciones macroeconómicas desfavorables en que se encontraba el país. Vale resaltar que ambos aspectos se encuentran vinculados: las reformas de los años 1990 sufrían un creciente desprestigio político y ciudadano debido en gran medida a la prolongada recesión que se atravesaba desde 1998 y a su marcado impacto sobre las tasas de desempleo y pobreza (inéditas en la historia reciente del país). A juicio del Gobierno Argentino, sin embargo, el defecto principal proviene de su diseño interno: se trataba de un intento de modernización y reforma extraordinariamente comprensivo, concebido como un proceso técnico "de arriba hacia abajo", cuya concreción sólo dependía en apariencia de la decisión superior de ejecutarlo. Más aún, la Segunda Enmienda pretendía contribuir a la obtención de las metas fiscales contenidas en un acuerdo entre el Gobierno y el FMI. La experiencia demostró que la modernización del Estado constituye un proceso institucional, en el cual los impactos fiscales se ubican en un segundo orden de prioridad. Exige una aproximación gradual y el desarrollo de consensos sólo obtenibles a través de una conducción con una marcada visión política. Dicha experiencia fue precisamente recogida en la Tercera Enmienda. Tercera Enmienda: el ICR expresa adecuadamente la intención de recoger en la Tercera Enmienda las lecciones aprendidas y la revisión de la estrategia de modernización decidida por la administración del Presidente Kirchner desde 2003. Afirma sin embargo que, aún cuando se estableció un Plan Operativo con metas de ejecución semestrales para cada actividad, la Enmienda no incluyó una revisión profunda de la Estructura de Resultados previstos para el Proyecto, "lo que resultó en una batería extensa y no jerárquica de indicadores de avance". Ello es inexacto, ya que no sólo el Objetivo de Desarrollo fue modificado significativamente ­formalizando la estrategia gradual y progresiva impulsada por el Gobierno-, sino que los indicadores de avance de cada Componente fueron revisados y modificados intensivamente, tal como consta en el texto de la Enmienda convenida. Los juicios favorables presentados con respecto a la preparación del Componente H. SINTyS ­ "componentes y actividades diseñados para apoyar perfectamente la implementación de la Fase II del 50 Programa, junto con una robusta estructura de resultados" y "un Plan Operativo detallado desarrollado para el período 2005-2006"- son plenamente aplicables a los Componentes de Modernización del Estado. A juicio del Gobierno, en consecuencia, la calificación del diseño de la Tercera Enmienda debería ser "Altamente Satisfactoria". Sobre la implementación. El texto del ICR resalta adecuadamente el impacto negativo de la inestabilidad política y económica sufrida por el país a fines de los años 1990, y categoriza dichos elementos como factores fuera del control del Gobierno y de la UCP. Sin embargo adjudica al Gobierno cambios en sus prioridades y un apoyo político desparejo hacia el Proyecto como elementos bajo su control. En realidad se trata de consecuencias del mismo fenómeno de inestabilidad general, y son igualmente ajenos a la voluntad del Gobierno. Las urgencias sociales determinaban un necesario cambio de prioridades que no sienta precedente alguno con respecto al compromiso y la voluntad del Gobierno referidos al programa de Modernización del Estado. También resultan una explicación muy clara de las demoras en los desembolsos, en medio de una súbita y enorme crisis fiscal. Felizmente, dichos problemas fueron rápidamente superados, tanto desde el ángulo macroeconómico como desde el punto de vista de la ejecución del Proyecto. También se menciona como un aspecto negativo de implementación que el Proyecto presentaba una excesiva dispersión en el número de áreas y agencias en que debía intervenir, con acciones demasiado específicas y de limitado impacto, citando algunas actividades comprendidas en la Tercera Enmienda dentro del Componente F. Modernización de Áreas Seleccionadas de la Administración Pública Nacional. En otras partes del documento se alude a que algunas de las metas establecidas resultaban escasamente relevantes para el programa de modernización emprendido. El Gobierno Argentino no comparte en absoluto dicho criterio, de lo que se dejó constancia en la preparación de la nueva Operación en ejecución desde 2008. Ello se fundamenta en dos dimensiones principales: La Segunda Enmienda, caracterizada por una visión puramente técnica ­y marcadamente fiscalista- del proceso de modernización, se focalizó en intervenciones horizontales orientadas a promover la eficiencia de toda la Administración, con independencia de las características particulares de las políticas sectoriales involucradas; esto es, desentendiéndose de la eficacia con que debían lograrse las prioridades estratégicas del plan de gobierno. Para el Gobierno Argentino, en cambio, la modernización del Estado es un proceso político multivariado, en el cual -además de la debida consideración de los aspectos presupuestarios- la primera prioridad consiste en la obtención de los logros esperados por la ciudadanía en toda la gama de políticas a ejecutar. El perfeccionamiento de los sistemas de apoyo particulares requeridos por algunos programas prioritarios forma parte indudablemente de los esfuerzos de modernización emprendidos por el Gobierno. El fortalecimiento de las capacidades de la Jefatura de Gabinete de Ministros para conducir la estrategia de Modernización del Estado se incorporó decididamente desde 2003 entre los principales objetivos a obtener. En dicho marco, la posibilidad de asistir de modo particularizado a los diversos Organismos responsables de determinadas políticas y servicios constituye una herramienta de especial relevancia, totalmente consistente con el Componente en que se desarrollaron (F. Modernización de Áreas Seleccionadas de la Administración Pública Nacional). La relevancia de dichas acciones se encontraba plenamente respaldada por la prioridad asignada por el Sr. Jefe de Gabinete de Ministros a los programas sectoriales asistidos. Sobre el Monitoreo y la Evaluación, su diseño y utilización. Se afirma nuevamente que la Tercera Enmienda no comprendió una revisión de la estructura de resultados de los Componentes vinculados a la Modernización del Estado. Se adjuntan anexos con las estructuras de indicadores de la Segunda y la Tercera Enmiendas, para permitir una comprobación directa de la profundidad de los cambios introducidos en los indicadores de ejecución, tanto de los Objetivos de Desarrollo como de los diversos Componentes. El fortalecimiento de los mecanismos de monitoreo de la ejecución sustantiva constituyó uno de los principales objetivos en el marco de los cambios estratégicos decididos por el Gobierno, 51 inmediatamente después de la crisis económica y política sufrida por el país. Entre otros elementos, ello condujo a la creación de la Coordinación Técnica de la UCP, responsable del diseño detallado, seguimiento y evaluación de diversos indicadores de avance de la ejecución del Proyecto. También se afirma que las agencias participantes preparaban de modo burocrático informaciones sobre los indicadores de avance, dirigidas a la supervisión del Proyecto pero no vinculadas con sus propios procesos de decisión. Debe resaltarse que en todos los casos la asistencia brindada por el Proyecto se encontraba directamente relacionada con resultados principales de la gestión de cada Organismo seleccionado (compromisos de calidad en la atención a los clientes-ciudadanos, medición de expectativas y satisfacción ciudadana, conformación de registros de personal, perfeccionamiento de la normativa laboral en el Sector Público, desarrollo del Sistema Nacional de Compras Electrónicas, establecimiento de la infraestructura nacional de Firma Digital, transformación tecnológica de los registros de sociedades comerciales de la Inspección General de Justicia, acceso a información estandarizada sobre costos educativos provinciales por parte del Ministerio de Educación de la Nación, etc.). Sobre aspectos fiduciarios. Respecto a la observación de la falta de cumplimiento temporal de la contraparte, el Gobierno expresa que cumplió a lo largo de la ejecución con la contraparte convenida en los acuerdos del Préstamo. Año tras año se pudo verificar dicho cumplimiento en la presentación de los Estados Contables, no habiéndose incurrido en ningún caso en la realización de inversiones no elegibles, ni teniendo observación alguna de la Auditoria al respecto. Con relación a la demora en el envío de la documentación luego del vencimiento del periodo de gracia (30 de Abril de 2008), el Gobierno considera que no existió incumplimiento debido a que se recibió una notificación fechada el 1º de noviembre -firmada por el Director para Argentina, Chile, Paraguay y Uruguay-, en la cuál se fijaba dicha fecha como último plazo para la realización de pagos por bienes y servicios devengados hasta el 31 de Diciembre. Este plazo no puede coincidir de ningún modo con el de presentación final de la documentación, ya que claramente se trata de procedimientos secuenciales que no pueden vencer en una misma fecha. De hecho, este argumento fue reconocido por el Banco, otorgándose un nuevo periodo de gracia para la presentación de dicha documentación final hasta el 30 de Junio. Sobre la obtención de los Impactos y Resultados. El Gobierno Argentino no entiende razonable una consideración literal del grado de obtención de los Objetivos de Desarrollo de la Segunda Enmienda. Ello se debe principalmente a los defectos de diseño expuestos más arriba en el apartado 3., cuyas características convertían en materialmente inalcanzables a los objetivos propuestos, por razones eminentemente técnicas vinculadas a la naturaleza misma del proceso de modernización estatal. Esta apreciación alcanza especialmente al Componente D. Macroestructura del Gobierno, cuya ejecución resultó manifiestamente inviable desde sus inicios: no existió un defecto de logros, sino una mala definición de metas. Debe destacarse el hecho de que dos de los seis PDOs establecidos hayan registrado un avance considerable, a pesar de las debilidades de preparación y diseño comentadas. Además, en cuanto a los logros intermedios de los demás Componentes, el Gobierno reconoce que la Segunda Enmienda resultó determinante en el lanzamiento de reformas horizontales de gran importancia ­continuadas en la Tercera Enmienda y en el nuevo Proyecto de Modernización del Estado II-, como la firma de las primeras Cartas Compromiso con el Ciudadano con diversos Organismos, el tratamiento de la Ley de Firma Digital, las primeras modificaciones en la normativa nacional de contrataciones, y el inicio del desarrollo del sistema de compras on-line que culminaría luego en el SECOP y el portal Argentina Compra (www.argentinacompra.gov.ar). En consecuencia, a diferencia de su preparación y diseño, el Gobierno Argentino considera a los logros de la etapa correspondiente a la Primera y Segunda Enmiendas como "Moderadamente Satisfactorios". 52 En cuanto a la Tercera Enmienda, el Gobierno Argentino considera que al Componente F. Modernización de Áreas Seleccionadas de la Administración Pública Nacional le corresponde una evaluación de "Altamente Satisfactorio": En primer lugar porque considera que los resultados correspondientes a los Subcomponentes Monitoreo y Evaluación y Sistema de Gestión de Activos Físicos fueron plenamente obtenidos según el alcance comprometido en los acuerdos convenidos. No se encontraba previsto su establecimiento y funcionamiento pleno, sino una serie de pilotos que permitieran el desarrollo de las herramientas técnicas necesarias. Ello fue logrado en ambos casos, y las actividades realizadas habilitaron un mayor compromiso institucional contemplado en el Proyecto de Modernización del Estado II. Las actividades desarrolladas no suponían reformas "limitadas en su alcance" o "dispersión" alguna en el enfoque de la estrategia, sino prioridades cuidadosamente seleccionadas tanto por su impacto propio en el marco de las políticas sectoriales que apoyaban, como en los aspectos institucionales con el desarrollo de las capacidades institucionales de la Jefatura de Gabinete de Ministros que fueron mencionados más arriba. El Gobierno Argentino considera que la introducción de los criterios mencionados en los apartados anteriores supone una evaluación de la Tercera Enmienda como "Altamente Satisfactoria", y ello conduce -según el procedimiento de asignación de puntajes presentado en la Tabla 5.- a una evaluación global de los Resultados e Impactos del Proyecto como "Satisfactorios". El Gobierno desea expresar además su disconformidad con algunas consideraciones puntuales vertidas en el ICR cuestionando "la racionalidad de la reasignación de recursos y la proliferación de programas no presupuestarios que disminuyen el control", así como resaltando "las cuestiones pendientes relativas a la corrección de largo plazo en la administración global de la deuda". Tanto las facultades del Sr. Jefe de Gabinete de Ministros para la reasignación de partidas presupuestarias como la habilitación de fondos fiduciarios para el financiamiento de proyectos prioritarios del Gobierno Nacional obedecen a legislación emanada del Congreso Nacional que se ajusta plenamente al orden jurídico establecido por la Constitución Argentina. Su cuestionamiento en este documento resulta extemporáneo e inadmisible. Sobre la estimación de riesgos en el Impacto de desarrollo. El Gobierno Argentino desea enfatizar su plena coincidencia con el apoyo del Banco a la estrategia de aproximación incremental y el efecto demostrativo de los "proyectos campeones" para el éxito general del programa de modernización. Este enfoque fue introducido en la Tercera Enmienda al ser presentado por el Gobierno como una de las principales lecciones aprendidas luego de las dificultades experimentadas en la ejecución de la Segunda Enmienda. El Gobierno comparte también el criterio de que la asistencia técnica central junto a una implementación descentralizada constituyen una importante garantía de sustentabilidad del Proyecto. Sobre la evaluación del desempeño del Gobierno. Se insiste una vez más en afirmar que el compromiso del Gobierno ha sido desparejo a lo largo del Proyecto, confundiendo reducciones en la ejecución provocadas por una crisis económica e institucional sin precedentes en el país, con una supuesta falta de apoyo político. Por otra parte, el Gobierno propuso y acordó con el Banco una modificación significativa en la estrategia general del programa de modernización, que demostró su oportunidad y eficacia y que se encuentra en línea con los cambios operados en estos años en la visión académica y la experiencia internacional (se puede decir que la visión del Gobierno Argentino fue precursora en la transformación de los paradigmas originales). Tampoco puede considerarse a este proceso de aprendizaje como una "disminución de apoyo" al programa de modernización de la Administración Pública en Argentina, que se ha establecido progresivamente como una auténtica política de Estado. El desempeño del Gobierno, sosteniendo y profundizando el programa de Modernización del Estado, a pesar de urgencias institucionales y sociales extraordinarias, sólo puede calificarse como "Satisfactorio". Conclusiones Desde el punto de vista de los objetivos públicos en juego, el Gobierno Argentino considera que: 53 La primera etapa, "Proyecto Original", contribuyó -dentro de los escenarios posibles y anticipados- a la prevención de los daños a los sistemas informáticos nacionales, en riesgo como consecuencia de la amenaza denominada Y2K. La "Primera y Segunda Enmiendas" adolecieron de defectos en su diseño técnico y en su estrategia de implementación, de los cuales tanto el Banco como el Gobierno capitalizaron posteriormente experiencias relevantes. A pesar de estos factores y de la notable crisis económica y política sufrida al inicio de su ejecución, esta etapa contribuyó significativamente a introducir y establecer al programa de reforma y modernización estatal como una herramienta relevante en una gestión democrática de gobierno, con consecuencias perdurables en adelante. La Tercera Enmienda supuso un relanzamiento significativo del Proyecto, estableciendo a la modernización estatal como una política nacional durante la administración del Presidente Kirchner, fortaleciendo acertadamente a la Jefatura de Gabinete de Ministros como sede institucional protagónica de dicha política, y permitiendo su profundización con la preparación y negociación del proyecto de Modernización del Estado II, Préstamo 7449-AR, en ejecución desde 2008. A juicio del Gobierno Argentino, el balance final para el conjunto del Proyecto, sobre la base del apoyo recibido a sus prioridades y políticas nacionales, es "Satisfactorio". El Gobierno desea reconocer la dedicación, el esfuerzo de recopilación de antecedentes y el enfoque positivo de los redactores del ICR. 54 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders N.A. Annex 9. List of Supporting Documents Gobierno de Argentina (1999-2008), Project Progress Reports, Buenos Aires, Argentina. Decree 103/2001 (2001), Plan Nacional de Modernización, Buenos Aires, Argentina. Lindblom, Charles E. (1959), "The Science of "Muddling Through," in Faludi, Andreas (1973), A Reader in Planning Theory, Pergamon Press. World Bank (1997), Argentina ­ Country Assistance Strategy 1998 - 2000, Report No.: 16505-AR, April 24, 1997, Washington, DC. World Bank (1998), Argentina - Year 2000 Technical Assistance Project, Project Appraisal Document (PAD), Report No.: 18521-AR, November 24, 1998, Washington, DC. World Bank (2000), Argentina: Year 2000 Technical Assistance Project (Ln. 4423-AR) - Proposed Amendment to the Loan Agreement, President's Memorandum, June 9, 2000, Washington DC. World Bank (2001), Argentina: Year 2000 Technical Assistance Project (Ln. 4423-AR) - Proposed Second Amendment to the Loan Agreement, President's Memorandum, June 22, 2001, Washington DC. World Bank (2001), Argentina ­ Country Assistance Strategy 2001 - 2004, Report No.: 20354-AR, September 8, 2001, Washington, DC. World Bank (2004), Argentina ­ Country Assistance Strategy 2004-2005, Report No.: 27340-AR, January 29, 2004, Washington, DC. World Bank (2005), Argentina: State Modernization Technical Assistance Project (Ln. 4423-AR) - Amendment to the Loan Agreement and Implementation Letter, December 14, 2005, Washington DC. World Bank (2006), Argentina ­ Country Assistance Strategy 2006-2008, Report No.: 34015-AR, May 4, 2006, Washington, DC. World Bank (2007), Argentina ­ Second Modernization Project, Report No.: 39656--AR, May 2, 2007, Washington, DC. World Bank (2008), Argentina ­ Second SINTyS Project, Draft Project Appraisal Document, June 12, 2008, Washington, DC. World Bank (1998-2008), Documents in Project's Electronic File, including Aide Memoirs, Back-to-Office Reports, Project Status Reports, Project Financial Assessments, and Project Procurement Assessments; IRIS, Washington, D.C. List of Interviews National Authorities Chief of Cabinet Office ­ (Jefatura de Gabinete de Ministros - JGM) Christian Asinelli (Director Nacional Alterno- Proyecto de Modernización del Estado) Miguel Biblao (UCP-JGM) Jorge Lupano (UCP-JGM) Leandro Gorgal (UCP-JGM) Pablo Yoder (UCP ­ JGM) Guillermo Garcia Eleisequi (UCP- JGM) Florencia Alvarez Travieso (UCP- JGM) Julieta Gallicchio (UCO- JGM) Carmen Sicz (ONIG -JGM) Eduardo Halliburton (ONIG-JGM) Enrique Della Busca (ONIG- JGM) Juan Carlos Herrera (SIG- JGM) Carlos Achiary (ONTI - JGM) Iris Cidale (ONEP-JGM) Gabriela Pessolano (ONEP-JGM) Enrique Iribarren (COFFEFUP- JGM) Oscar Moreno (COFFEFUP- JGM) Amalia Villaroel (COFFEFUP- JGM) Marte Mena (Procae-INAP) Geraldine Brid (SIG- JGM) 55 Maria Pilar Giribone (SIG- JGM) Laura Saavedra (SIG- JGM) Jorge Landaburu (Macroestructura-JGM) Gabriela Perez (Macroestructura-JGM) Norberto Perotti (Calidad del Gasto- JGM) Jorge Devalis (Activos Físicos- JGM) Nicolas Sassano (Activos Físicos- JGM) Jorge Picca (Activos Físicos- JGM) Maria Ester Berdasco (Activos Físicos- JGM) Analia Moguilevsky (Activos Físicos- JGM) Alicia Cantarella (Activos Físicos- JGM) Gerardo Serrano (DINAPPFE-JGM) Beatriz Rodriguez (DINAPPFE-JGM) Eduardo Arraiza (Ente Metropolitano de Transporte- JGM) Other National Authorities Alicia Ballart (IGJ- Ministerio de Justicia y Derechos Humanos) Cecilia Remorini (Observatorio de Costos Educativos ­ Ministerio de Educación) Susana Lumi (Observatorio de Costos Educativos ­ Ministerio de Educación) Agustina Villa (Prosperar, Agencia Nacional de Desarrollo de Inversiones) Luis Nobili (SINTyS) David Groisman (SINTyS) Bank Staff Kathrin Plangemann (Senior Public Sector Management Specialist) Miguel Mercado Díaz (Senior Operations Officer) Ron Myers (Sector Manager) Nick Manning (Sector Manager) Edgardo Mosqueira (Senior Public Sector Management Specialist) Linn Hammergren (Senior Public Sector Management Specialist) Alejandro Solanot (Financial Management Specialist) Andrés Mac Gaul (Senior Procurement Specialist) Natalia Bavio (Financial Management Specialist) Other institutions Marcelo Barg (SMP Coordinator ­ 2000) 56 MAP IBRD 33362 57