INTERNATIONALBANK FOR WORLD BANK R E T C N O E N STRUCTION PM AND DEVELO February 2004 No.39 A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region PERU: TOWARDS A SYSTEM OF SOCIAL ACCOUNTABILITY Mariana Felicio and Indu John-Abraham When Fujimori's government fell in September 2000, Peru's economic policy, later called the Carta Social. From these socio-political climate was ripe for change. After a break in dialogues emerged Concerted Development Plans, and a democracy in the 1990s, serious corruption scandals, and a more proactive role of CSOs in budget monitoring of some recession in 1997, inequality and poverty sharply increased social programs and implementation of local development and crippled the country's productive capacity. Paniagua plans.. was elected by national consensus to lead the transition government for nine months. The election was seen as Secondly, the mesas helped elaborate national development transparent and fair, creating a positive atmosphere for goals in early 2002, which were then formalized in the collective action by civil society organizations (CSOs) and National Agreement. Seven national parties, the church, political parties. Instead of a `top-down' approach, the new industry, business sector and labor unions committed to the government integrated dialogue and negotiation to achieve agreement, which identified and then institutionalized consensus and respect for the institutional and democratic regional priorities. The National Agreement has formulated framework, giving priority to transparency and participa- 30 state policies in four key areas: (i) institutionalization of tion. A programmatic social reform loan (PSRL) from the democracy, (ii) social equity and the fight against poverty, World Bank supported the initiative. (iii) competitiveness, and (iv) anti-corruption. Monitoring benchmarks are being developed. Three National Processes Finally, the decentralization reform incorporated regional administrations as a new level of authority in the State structure, helping institutionalize the need to identify The transition government initiated three important national regional priorities, and bringing government closer to processes: (i) multi-stakeholder roundtables or mesas de citizens. Functions and responsibilities in education and concertación to support the Fight against Poverty, (ii) health services and other social areas and regional formulation of national development investments are being transferred gradually from the national goals, and (iii) decentralization. to sub-national levels. First of all, the Mesas de Concertación para la Lucha Contra The decentralization program, according to the Law of the la Pobreza (MCLCP), created in January 2001, provide a Foundations for Decentralization (#27783), mandates the forum for dialogue and negotiation for government use of participatory budgeting and concerted planning ministries and civil society representatives to design social mechanisms at the local and regional levels. These policies and programs1. Initial MCLCP discussions defined instruments are intended to facilitate the development of general guidelines on social policy and its relationship with inclusive government agreements, make the fight against 1 poverty more effective, and consolidate the democratic consensus-building with government officials, civil society decentralization reform. The first stage of the leaders, and the Bank team. decentralization process (2001) was to develop preliminary versions of the strategic development plans. This process Table 1 details participatory management and monitoring was ratified and consolidated in 2002 with a first-time tools and specific actions taken to enhance the quality and experience--each region in Peru discussed its priorities for access to information and promote social accountability on 100 percent of the available resources for public investment numerous fronts under this loan. To date, these actions for that region2. Finally, this process was linked to the have been supported by three PSRL credits as well as grant regional plans through the participatory development of the money from the World Bank and Japanese donors. 2003 National Budget. One outcome of this process was the formulation of Towards a System of Social Accountability concerted plans and participatory budgets in 22 of the 24 regions within the projected investment ceilings for 2003. 40 percent of the regions completed participatory budgets The actions that Peru already has taken lay the foundation with support from all of the public regional administrations, for a future system of social accountability. The most all mayors, and the principal CSOs. These budgets were important factors for the sustainability of a social included in the 2003 National Budget. Plans to further accountability cycle lie in the context and capacity of civil sustain and consolidate the process include: (i) training local society to exercise social agency4. This means that an and regional authorities to formulate concerted plans and enabling regulatory and policy environment must be participatory budgets, (ii) constructing a legal framework to created, and capacity strengthened to ensure that civil establish a stable institutional environment and (iii) updating society organizations can hold public institutions plans and participatory budgets for the 2004 National accountable to their citizenry. The most important Budget. contextual elements can be summarized in the acronym ARVIN which stands for the regulatory and policy Promoting Transparency and Participation frameworks that affect the ability of citizens to Associate, mobilize Resources, have Voice, access Information, and Negotiate with decision makers. Peru's commitment to decentralization and anti-corruption created ripe conditions for incorporating transparency and Most of the phases of civic engagement described in Figure participation as key components of a programmatic social 1 are not yet linked, but have the potential of forming a reform loan from the World Bank, to be designed through virtuous circle of information, action and mutual feedback Table 1. Components of Participatory Management and Monitoring(3) Initiative Objective Actions Participatory Development Identify needs and priorities through The Mesas de Concertación produced Concerted Planning participatory process that serves as the Development Plans. basis for budgetary decision-making. Determine budget allocations as efficiently and transparently as possible by ensuring Participatory Budget that budget decisions reflect consensus- Budget allocations based on Concerted Development Formulation (PBF) determined priorities and removing Plans. information barriers between state and society. The Financial Integrated Monitoring System was Ease access and use of public information modified to supply budget information for national, regional, and local levels. This "friendly window" was Open Budget Information to enhance budget analysis by citizens and public officials alike, to enhance made internet accessible to CSOs and local public knowledge and accountability. governments.Independent budget analysis initiated by a CSO/think tank. National Statistics and Information Institute (INEI), was Improve quality and credibility of regulated to ensure its independence and information Ensure Reliable information systems by using autonomous reliability.A presidential decree was approved and Information and credible sources of information with enacted to standardize and centralize information external oversight. produced and used by government ministries through the Geographic Information System (GIS). Report cards were used to supervise protected Solicit opinions and feedback on programs for a set time. (See text box-Participatory Management Monitoring Tool)SIVISO, a pilot User-Feedback on Services efficiency and effectiveness of services and monitor transfers from central to local monitoring and accountability program, supervised by governments. the Ombudsman - government of Peru - CSOs, was constructed. Measure Improvements in Evaluate progress in levels of A transparency module was included in the IV Transparency and transparency and openness in policy National Household Survey (ENAHO) to establish a Openness processes. baseline. 2 Participatory Performance Monitoring Tool: Report Cards What are Citizen Report Cards? A participatory survey that solicits client feedback on the performance of public services, combining qualitative and quantitative methods to collect useful demand-side data that can help improve public services. They are also an instrument to exact social and public accountability, through accompanying media coverage and civil society advocacy. When are they used? Citizen Report Cards are used where demand-side data, such as user perceptions on quality and satisfaction with public services, are absent. They enable citizens to signal key reform areas to public agencies and politicians, and also to create competition among state-owned monopolies. Some actual applications include: (i) basis for performance based budget allocations to pro-poor services (Philippines), (ii) cross-state comparisons on access, use, reliability and satisfaction with public services (India), (iii) supplement national service delivery surveys (Uganda), and (iv) governance reform projects (Ukraine and Sri Lanka). What do they reveal? Citizen Report Cards provide feedback from users of services on: (a) availability of services, (b) satisfaction with services, (c) reliability/quality of services and the indicators to measure these, (d) responsiveness of service providers, (e) hidden costs - corruption and support systems, (f) willingness to pay, and (g) quality of life. Source: Singh, Janmejay "Matrix Summarizing Citizen Report Cards and Community Scorecards". to produce more effective public management. For example, engage in participatory planning and budgeting processes in the Ministry of Finance's efforts to build a reliable public an informed and constructive manner. expenditure management information system, decentralize, and Congress's approval of legal frameworks enacting participatory budget processes help to institutionalize civil Lessons Learned society's access to information, negotiation and voice around the public policy cycle. Using grants from the World Bank and other donors, CSOs have taken on capacity Some difficulties have been encountered in implementing building activities to provide analytical insights, skills and the programmatic loan in Peru. These include: (i) the poor tools to the Mesas to understand the public budget and to quality of information; (ii) the high learning curve of capacity building efforts in the context of a rapidly moving decentralization process; and (iii) the presence of a weak performance-based public management culture to emphasize the importance "customer" satisfaction. Some initial lessons learned in Peru may be helpful for other countries and projects: ·Ensure inclusiveness and suffi- cient capacity by involving a vari- ety of civil society organizations. ·Include citizen rights and entitle- ments in information systems . Citi- zens can only demand better ser- vices if they know their rights. ·Institutionalize processes to facili- tate civic engagement . The results of increased transparency and par- 3 ticipation will only show if mechanisms are continu- The Future ously enforced and sustained. · Sequence actions and develop synergies of civic en- gagement for optimal effectiveness. Peru's social accountability model is at an early stage, but · results are promising. Participatory mechanisms around the Strengthen and expand the links between horizontal and budget and policy cycle offer tools to strengthen the correla- vertical accountability . Civic engagement in vertical tion between citizen priorities and public decision-making, accountability improves public expenditure targeting of better target poverty reduction strategies, and ensure that poverty reduction strategies and enhances the quality of resources are used transparently. Challenges remain, includ- services delivered5. ing the need to strengthen the coordination between civil · Develop a results-based reward/penalty system of public society and political parties to guarantee the sustainability of management to promote improved performance quality. participatory management tools and to reduce divisions between them, as well as to evaluate the impact of participa- Some lessons apply specifically to the World Bank: tion and social accountability in terms of concrete results and · Dissemination of World Bank analytical work can lead development effectiveness. to important political dialogues. In the case of Peru, a more open approach to the 1997 poverty assessment Notes served as a stepping stone for an inclusive, in-country dialogue towards a powerful national process. · As the Bank is keen to play an objective role as an 1Half of the MCLCP Executive Committee members (51 external development organization, this case shows that percent) represent the national, regional or local govern- the World Bank can serve as a facilitator, bringing ments; the rest represent a wide range of CSOs: non-gov- different actors together around common objectives in a ernmental organizations (NGOs), community-based organi- productive manner. Over time, the Bank was able to zations (CBOs), labor unions, the private sector and reli- engage other actors in a leadership role and to secure the gious groups. To date there are 1,024 'mesas' across the role of the government and other local actors in champi- country. 2 oning a series of national dialogues. Investment ceilings were distributed across regions ac- · The process needs time; analytical work and concrete cording to the severity of poverty. 3Some participatory tools revolve around the budget cycle, actions should precede lending. or participatory public expenditure management cycle · Programmatic loans can support national reform pro- (PPEM), which has four stages: (i) Participatory Budget cesses, and it is possible to design prior actions in the Formulation, (ii) Participatory Budget Analysis, (iii) political matrix to strengthen and accompany these Participatory Budget Expenditure Tracking, and (iv) processes. The prior actions pursued under the PSRL in Participatory Performance Monitoring. See Social Peru suggest that, contrary to critical opinion, policy- Development Note 81, "Making Services Work for the based reform can play a role in a pro-poor governance Poor", http://www.worldbank.org/participation/sdn/ agenda in the region. sdn81.pdf · The design of conditionality and prior actions can be 4W. Reuben, paper at ISS 50 th Anniversary Conference: done openly, without needing to disseminate confiden- "Globalization, Poverty and Conflict", The Hague, October tial documents. While the team preparing the PRSL was 2002. keen to share as much information as possible, the Bank 5Ibid. was never asked to or considered sharing confidential information. It would seem, then, that as long as teams About the Authors are transparent and inclusive during the preparatory process, less attention is given to the sharing of formal, legal documents that the Bank and its clients may not be This note was prepared by Mariana Felicio and Indu John- prepared to disclose. Abraham with supervision and inputs from William Reuben, · Participation and Civic Engagement Group Coordinator, It is important to mobilize resources outside national Social Development Department, and Katherine Bain, Civil budgets to build the capacity of civil society and the Society Team Leader, Latin America and the Caribbean poor to enable their participation in public policies. The Region, World Bank. Federico Arnillas' presentation, Direc- Bank as an organization, however, is not always well- tor Ejecutivo ­ Mesas de Concertación, Perú, at ESSD Week prepared to engage in capacity building of civil society 2003, provided additional information and analytical in- organizations around fast disbursing policy-based loans. sights. The issue of capacity building of counterparts ­ espe- cially those that have seldom been engaged at the macro About "en breve" level- should thus be considered by task teams at the outset and sufficient resources secured. 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