Supporting a National Community Action Program via

an Adaptable Program Loan

Reaching the Poor

Rural and Urban

Integrating AIDS

Africa Region Task Force on New ProductsBrainstorming Document

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Mr. Wolfensohn’s annual meeting speech

• What is it, Mr. Chairman, that the poor reply when asked what might make the greatest difference to their lives?

• They say, organizations of their own so that they may negotiate with government, with traders and with NGOs.

• Direct assistance through community driven programs so they may shape their own destinies.

• Local ownership of funds, so that they may put a stop to corruption.

• They want NGOs and governments to be accountable to them.

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Long term objectives

• Empower poor communities for their own sustainable economic and social development

• Enable their nearest local government to support, coordinate, and help finance community programs

• Enable local governments/communities to demand technical/managerial support from sectoral agencies, AGETIPS, NGOs, private sector…

• Strengthen accountability mechanisms of all actors to the poor population

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Some key principles

• Subsidiarity principle for allocating functions to communities, local and central government

• Planning, implementation, operation and maintenance at community/local level

• Competition for access to resources – among communities and local governments

– among service providers

• Community/local ownership and control over funds• Transparency and ex-post control (with penalties)• Focus on process and outcomes

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Outline

• Component 1: Strengthening capacities of communities and their nearest local governments

• Component 2: Strengthening administrative and fiscal decentralization

• Component 3: The matching grant fund• The role of sectors specialists, NGOs,private sector• Accountability mechanisms• Component 4: Monitoring and evaluation• Integrating HIV/AIDS• Changing the way we work

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Component 1: Strengthening capacities of communities and their local governments

• Use existing latent capacities and social capital and develop them, mainly by doing

• Systematic use of participatory appraisal and bottom up planning techniques

• Strengthening of transparency in programming, contracting, and management of funds

• Gradual increase of responsibilities and fungible financing envelopes, linked to performance

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Consensus on participation

• Local development requires community participation

• most bilateral and multilateral projects

• Behavior change can only be achieved through participation and community empowerment

• Natural resource management, HIV/AIDS (Tanesa, UNAIDS), health and nutrition, many other areas

• Everybody applies participatory (rural) appraisal techniques (PA)

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But participatory appraisal rarely applied for comprehensive local development

• Instead, each actor tailors techniques to (sector)specific priorities/programs

• Other community priorities which are identified during PA can rarely be followed up

• This is ineffective, costly, and slow

• Only a few communities are covered……despite the presence of many actors in a district

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Participatory appraisal under the APL

• Build consensus on participatory appraisal techniques among NGOs, service providers

• Agree with them to scale up to all communities in a district, then in a country

• Use the process to build social capital, accountability mechanisms

• ...and to design the community/local development programs

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A multi-sectoral PRA manual to get started already exists

• Out of collaboration of World Bank, KITS, others

• Based on actual scaling up experiences

• Includes formation or strengthening of village/local development committees and sub-committees

• Ends with action plans as well as assignment of implementation responsibilities to sub-committees

• Communities start immediately with actions which require no external input

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Who will implement the action plans?

• The communities themselves

• Under leadership of respective sub-committees

• And general guidance of local authorities

• Sector specialists work as trainers, not implementers

• They watch, but do not interfere

• And provide external inputs, where needed

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But participation often ends with the PA

• Little choice over source of technical assistance

• Little input into design, technology choice

• Communities rarely control the funds

• Contracting often done by line agencies, intermediary NGOs, other outsiders

• Transparency and accountability to community, local government extremely limited

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Communities/local governments have no fungible money

• Local governments have little own revenues, or revenue shares

• Financing is usually project/sector/donor-specific• Arrives as balkanized funding for specific

subprojects with donor-specific procedures • Communities/local governments can never

implement their own priorities/programs • PRA and local planning process discredited

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Enabling communities/local governments with fungible funding must be a

central objective of the APL

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What would be financed under component 1?

• Facilitation of participatory appraisal and planning of communities and local governments by– community development agents, agricultural extension– NGOs and/or private sector entities

• Information, Education, and Communication (IEC)

• Training of facilitators, local government officials, community members

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Component 2: Strengthening administrative and fiscal decentralization

• Most countries in Africa have initiated decentralization, but progress varies widely

• Fiscal decentralization is lagging behind everywhere

• Objective of component 2: Systematicallyassist the complex process of decentralization

• Content of component 2: Will vary widely– depending on the advance a country has already made

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Strengthening central government capacities to manage decentralization

• Managing the complex process of decentralization requires strong leadership and guidance from the central government– Setting policies, legislation, regulation– Ensuring consistency between political,

administrative, fiscal decentralization – Driving decentralization process of sectors– Monitoring and evaluation, correcting mistakes

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Advancing administrative decentralization

• Use the subsidiarity principle to allocate functions

• Accelerate decentralization of sectors to lowest possible level of local government

• Make line agency staff responsible to elected local officials and community members– by progressively transferring accountability of personnel,

personnel management and payroll

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Strengthen (fungible) fiscal capacity of communities and local governments

• Via cost recovery• By improving their powers/capacities to tax themselves• Via revenue sharing in favor of poor localities

– perhaps as part of HIPC conditionality• Via a matching grant fund to communities/their local

governments– initially financed jointly or in parallel by donors– supported by the multi-sectoral APL– gradually replaced by allocation of fiscal resources to the matching

grant fund• Requires collaboration with fiscal department of IMF

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How would component 2 be implemented?

• By careful underpinning via sector work throughout the life of the program

• By targets which become triggers in the APL, or conditions under HIPC, policy loans

• Via capacity building activities for the central institutions in charge of decentralization– Sector programs outside of the CAP would continue to

support centrally executed functions/institutions

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Component 3: The matching grant fund

• Objectives and design will depend on the advance of administrative and fiscal decentralization

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In a system just beginning decentralization (corresponding to first phase of APL)

• Objective: Provide fungible financing for initial development plans of poor communities

• Allow them to strengthen their capacity by doing

• Targeting: All poor communities, poor local government areas

• Interpersonal targeting within communities: left to community decisions

• Matching contributions: Mainly in labor and in kind, by each community for its sub-project

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After fiscal decentralization is completed:(corresponding to last phase of APL)

• Local and community development plans are now financed from local revenues/revenue shares

• Matching grants become targeted to the poorest communities and individuals within localities

• They can also be used to encourage special initiatives (environment, malaria, immunization, AIDS…)

• Targeting: Self targeting via co-financing matrix, and/or eligibility rules for individuals and communities

• Matching contributions: from local governments, and from the benefiting communities, individuals, enterprises

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Do communities and their local governments have required capacity?

• There will be capacity problems at the local level

• But central programs have serious capacity problems, and have rarely reached the poor

• Learning by doing is a major objective of the CAP

• Start small, increase tasks and budgets over time

• Provide central support on demand

• Monitor, evaluate, adapt the program as you go– don’t wait until you have resolved all of the problems

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How do sector specialists, NGOs and the private sector fit in?

• They are providers of specialized services

• They come in after the general PRA has– identified existing resources– determined priority problems– elaborated action plans– determined local implementation responsibilities

• ...only on demand by the community

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Range of services provided by sector specialists, NGOs, private sector

• In-depth specific diagnosis, action plans– often also requires participatory techniques

• Technical/managerial advice, capacity building

• Harmonization of community/local program with sectoral priorities

• Technical sign-off/permits for compliance with technical, social, environmental standards

• Building contractors

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How will the sectors be supported?

• Via national sector programs, as in the past

• Financing would be separate from the Community Action Program

• Financing options– Via several sector-specific loans, APLs– Via a single capacity credit line from which the

sector programs draw on a competitive basis– Via a budget support credit line

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Strengthen four mechanisms for downwards and upwards accountability

• Strengthen political accountability of elected officials to community members

• Make local technicians and administrators accountable to elected councils, beneficiaries

• Use transparency rules to empower community members to control their own officials

• Complement by formal random, ex-post audits

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Transparency for downward accountability

• Elect finance committees in all organizations receiving funds

• Publicly post funds received and expenditures

• Give all members the right to inspect accounts

• Maintain accounts/documents in local language

• Provide literacy training, capacity building

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Random audits and penaltiesfor upwards accountability

• Thousands of small accounts and tens of thousands of small projects

• Compelling need to move from ex-ante approval to ex-post, random technical and financial audits

• Publish audit results locally• Develop penalty schedule for different problems• Reduce or eliminate funding to delinquent

communities/local governments

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Procurement and disbursement

• Use private sector production, import, procurement, and distribution – for all inputs with country-wide distribution: cement,

roof sheets, lumber, drugs, condoms, etc

• Foster competition in the private sector

• Use simplified community-based procurement and local shopping

• Disburse directly into accounts of communities and local governments

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Channeling of funds and local coordination

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All options require central government guarantee of World

Bank and IDA loans

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At community level

• As fungible envelopes to communities

• Deposited into their accounts

• With negative lists of what cannot be done with the money

• With replenishment based on performance and Statements of Expenditures (SOEs)

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Options for local coordination

• Via a development committee of the nearest elected local government

• Augmented by technical capacities from line agencies, NGOs, the private sector

• In absence of local government, or where it cannot be trusted, set up a program-specific committee, with limited links to local government (Fumac 1 option in NE Brazil)

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Options for channeling funds from a central account to communities:

• Directly to communities, after approval from local development committee– Fumac 1 option in NE Brazil

• As an envelope to the local development committee– transferred into their account– with replenishment based on performance,

SOEs (Fumac 2 option in NE Brazil)

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Options for flow of fundsfrom a central government

to local governments/communities

• Via an entity similar to a Social Fund

• Through intergovernmental fiscal system managed by ministry of finance or local government

• Variants for federations– Social fund like entity at state level (NE Brazil)– Directly from central government to local governments

(Mexican Ramo 26)– Through intergovernmental system at state level

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Component 4Monitoring and Evaluation

• Feedback for rapid program adaptation

• Demonstrate poverty impact of the program

• Compare program to other interventions

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Program monitoring and evaluation

• Focus on both process and outcomes• Random sample for quantitative/qualitative data

– local governments (clusters) – service providers– communities– ultimate beneficiaries

• Response capacity to problems and complaints • Data collection and processing in real time

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Impact evaluation focussed on poverty impact

• Rigorous national baseline integrated into the poverty data collection

• Impact measured via periodic surveys which generate panel data of households and locations

• Using quantitative techniques to assess causality, compare to other ongoing interventions

• Complemented by more qualitative techniques

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How to implement component 4

• Mainly via contracting – to statistical institutes, consultant firms,

universities, research institutions

• Via capacity building of key institutions – statistical office, the central M&E coordinator,

research institutions, etc.

• Supported by a strong team in Washington

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Integrating HIV/AIDS into community action programs

In PA exercises HIV/AIDS has never come up as a priority

Fear, shame, denial

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Special arrangements to overcome denial

• PRA facilitators have to prompt communities to face, discuss, and prioritize HIV/AIDS

• No-one can work on, or allocate money to a problem they cant talk about

• Invite self-selected, committed volunteers to form local/community AIDS committees

• Funding for HIV/AIDS must be earmarked all the way to the resulting local AIDS committees

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Who are the HIV/AIDS experts

• People living with/affected by AIDS …(they are particularly effective)

• people who have worked in the many HIV/AIDS “boutiques”

• Health staffs who deal with AIDS every day

• Their role must change from implementers and victims to trainers and advisors

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Implications for the way we work

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Procurement, disbursement, accountability as central program design issues

• Procurement, disbursement, audit specialists to participate in program design and supervision at village, district, regional and central level

• Backed up by a working group in Washington, including team leaders and OS specialists

• Rapid dissemination of best practices, training

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M&E as a central component of program design and supervision

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Changing the way we work

• Cross sectoral teams spend most of their time in the field

• They observe and continuously improve local participation, local institutions, procurement, disbursement, technical designs….

• They monitor outputs and impacts

• And help communities, local and national governments improve their programs

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Progressively consolidate existing Bank projects into cross-sectoral

instruments such as

• The single APL or credit line for communities and their local governments

• A single capacity building APL or credit line for central functions/institutions– research, training, statistics, monitoring and evaluation,

environmental and social assessment….• Quick disbursing budget support linked to reforms in

policy, institutions and public expenditures