INTERNATIONALBANK FOR WORLD BANK R E T C N O E N STRUCTION PM AND DEVELO June 2005 No. 74 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 PARTICIPATION, SOCIAL ACCOUNTABILITY AND TRANSPARENCY MECHANISMS IN DEVELOPMENT POLICY LOANS IN LATIN AMERICA 2000-2003 William Reuben and Blanche Arévalo In recent years, community participation, public participation in Bank operations. The policy redefines the transparency, and social oversight and accountability have goals and procedures of "Development Policy Lending" (en- gained increased importance in the World Bank, especially in compassing what was previously known as Structural Adjust- the Latin America and Caribbean Region (LCR). Ensuring ment Lending, Sectoral Adjustment Loans, and Programmatic participation and civic engagement in policy design and Lending) as providing fast disbursing budgetary support to monitoring of reforms is expected to borrower countries, while placing increase commitment and reform special attention on development outcomes. Many constituencies and policy reforms. Funds are not ear- administrations now support this marked for specific uses, but are approach, as they increasingly released against a matrix of agreed acknowledge that social dialogue and policy measures. community enforcement are part of the modus operandi of democratic Lessons learned from the recent governance. Based on this assumption, past are extremely useful in facili- civil society and private stakeholders in tating the successful implementa- LatinAmerica have become involved in tion of the new policy. These expe- the design, implementation, and riences have demonstrated that monitoring of several public programs, policies tend to be more effective many of which are supported by the when there is country ownership of Bank. Experiences vary widely across new programs, when policies re- LCR countries, but the LCR leads other flect the country's priorities and regions in this process. when citizens' views have been taken into account in their design. A document review of development policy lending projects OP/BP 8.60 integrates a new vision for participation as follows: approved in fiscal years (FY) 2000-03 reveals increasing civil society involvement in loan design and goals, context, and a) It confirms the Bank's commitment to advise borrower activities supported by the loans. The study examines the countries to consult with the main stakeholders and tools used by the World Bank to promote public transparency, engage them in the process of preparing national devel- community participation, social auditing, and accountability opment strategies. in development policy lending during the past four years, and assesses the extent to which these objectives have been met. b) Based on their own Constitution and legislation, bor- rower countries shall define the manner and scope of New World Bank Policy on Participatory Processes consultations and participatory procedures in the prepa- ration, implementation, follow-up, and assessment of the A new Operational Policy/Bank Procedure, OP/BP 8.60 became operation. effective in August 2004, institutionalizing the importance of 1 c) Bank staff must include a description in the Project discussed social demands and key concerns in-depth. The Document of the efforts taken towards participation and loan to the Province of Santa Fe in Argentina also considered consultation with civil society, and the outcomes of the the impacts on women and strategies to respond to these participatory processes used to design the country's issues. Several private sector development loans were national development strategy. approved in 2002, in which there is typically limited or no civic engagement, explaining, in part, the decrease in participation during that year. In these loans, transparency and accountability are more relevant issues. Participation and Consensus Building in the Design of the Loans FY03 saw much more participation both in loan design and reform content. Nine loans included participatory design In FY 2000, only one operation included some form of procedures, and a greater variety of mechanisms to capture participation in its design. This was in Ecuador, where the citizen demands. In Bolivia, the National Dialogue again SAPRI Forum was convened for the "Voices of the Poor" served as a space for consensus-building, specifically around study, and more recently for the Country Assistance Strategy the electricity sector. It was agreed to use dialogues to reach (CAS). Over 18 months, the Bank consulted with civil society consensus on issues such as: cocaine production, wages, representatives, including NGOs, indigenous associations, land titling, gas extraction, and the economic model that the National Coordinator of Social Movements, academics, Bolivia should follow. In Brazil, the Bank held extensive and the private sector. These consultations, and other consultations. The Lula Administration started a participatory meetings with representatives of civic movements, process for the preparation of a multi-annual public budget for intellectuals, the private financial sector and small enterprises, 2004-2007. served as input into the design of the FY00 Structural Adjustment Loan. Ecuador led an extraordinary dialogue process in which civil society was consulted about how best the Bank could support One year later, participatory design was evident in three loans: Argentina, Bolivia, and Peru. The loan approved for the Province of Catamarca, Argentina, involved a general survey and focus groups with key relevant stakeholders. Bolivia's Regional Program for Food Security (RPFS) was supported by a National Dialogue, which involved extensive consultations with representatives from municipalities, civil society organizations, and the private sector. Subsequently, the National Dialogue helped define amendments to the Civic Participation Act affecting municipal governments, and influencing the design of the World Bank loan. In Peru, dialogue and consensus and demands for transparency, anti- corruption and civic participation became defining features of the social movement that coalesced around the end of Fujimori's administration. The emergence of country-wide Poverty Reduction Consensus the country. In January 2003, the World Bank carried out a Committees, demands for participatory budget decision- workshop with incoming officials to the new administration, making and the first district-level elections in Peru's history all intellectuals, private sector representatives, and civil society show the increasing demand for civic participation. The Bank representatives. A week after the new administration took incorporated the decisions made in the decentralized office, World Bank staff attended a National Dialogue that Consensus Committees into the policy matrix of the loan. discussed several loan issues. Subsequently, the consultation extended to other areas of the country, which provided In FY 2002, participation in loan design occurred only once. In valuable input for the work of the Bank in Ecuador. Argentina, social concerns regarding public service delivery were assessed and an attempt made to engage the population In Guyana, loan-related discussions gave rise to a Country in implementing potential solutions. A survey was conducted, Financial Accountability Assessment (CFAA), and the interviews held with 100 participants, and three focus groups consultation process helped alleviate the country's social 2 tensions by crossing all social and ethnic boundaries. Finally, Committees (CDAP) to gather community input for policy the environmental loan granted to Mexico in FY03 aimed to monitoring. Civil society representatives were included in a facilitate a shared approach to the environment, involving all Unified Fund Board, and the government was required to enter related sectors (energy, water, tourism, etc.), and many of the into agreements with 118 Oversight Committees to enforce loan activities are related to consensus-reaching. social control in the participating municipalities. There was also a Charter of Pregnant Indigenous Women's Rights, which Participation, Social Accountability and provided women with information about their health care rights Transparency Mechanisms in the Content of the and services in indigenous languages. Brazil created a Citi- zens' Report Card at the state and municipal levels to assess Loans educational services and a toll-free line for complaints regard- ing public health care. The educational assessment was care- The study found increased citizen participation in monitoring fully designed and an evaluation model was established, as policy implementation, with the emergence of mechanisms for well as a monitoring and impact evaluation system. Addition- citizen oversight, governmental accountability, and citizens' ally, a user satisfaction survey about health care services was access to information, as well as social inclusion measures to to be conducted, and all complaints received were to be secure civil rights. The percentage of loans that include com- answered. munity participation, accountability, and citizens' access to information in the loan matrix rose from 38 percent in 2000, to 45 The framework for a loan to Guyana in FY03 required the percent in 2001, 50 percent in 2002, and 66 percent in 2003. government to implement a plan to fight AIDS through NGOs, Moreover, the mechanisms became increasingly innovative community organizations, and other organized groups. The and attractive for civil society and the targeted beneficiaries. loan also promoted participation of all stakeholders in the establishment of School Boards. In 2001, for instance, Argentina began conducting surveys to measure the level of user satisfaction with health services. The The same year, Mexico's environmental loan developed high survey outcomes were to be publicly disclosed and posted in profile workshops with stakeholders aimed at reaching consen- each health center throughout the country. sus on water, solid waste, energy, and tourism. In order to gather suggestions from all stakeholders involved in environ- That same year, Bolivia promoted consultations in all nine mental issues in every region, 13 participatory regional plans districts to discuss reforms with local governments and com- were to be developed. The entire process was aimed at devel- munity representatives (indigenous people, women, political oping and implementing a strategic plan with the agreement of parties, and civil society). The loan itself developed the design all stakeholders. and implementation of a methodology to measure knowledge and understanding of the government's programs by different Nicaragua passed the Participatory Education Act, which social groups (including indigenous people and women). This provided members of the new school boards with the training loan also included the preparation of a plan to promote social needed to hire teachers and managers, as required by the law. representation and the design and implementation of participa- tory procedures as one of its goals. Finally, Peru institutionalized the National Household Survey (Encuesta Nacional de Hogares or ENAHO) to gather infor- Equally noteworthy was the loan approved for Peru, which mation about the perceptions of communities on government involved 14 actions associated with accountability and four transparency mechanisms. In addition, the Ombudsman had to with governmental transparency. These actions included: launch an information campaign about citizens' right to public increasing the number of Local Health Management Councils information. A pilot project for the assessment of public ser- for health care delivery that engage the community in the vices was also to be launched, specifically for six priority social service delivery process; and posting on the Internet transfers programs (CIVISO).And regional participatory budgets agreed made to each district under programs such as the "Glass of by Consensus Building Committees were to be approved and Milk" school feeding program, Rural Roads, and Rural Electri- institutionalized, a procedure that required a governmental fication. A Complaints Desk was to be established in the directive. Ombudsman Office to prevent the political use of social pro- grams, and social oversight mechanisms established to moni- Which sectors show the most participation? tor public spending, including a national monitoring program As might be expected, participation, social accountability and implemented by a civil society organization. transparency measures (P/SA/TM) are more common in loans related to education, health, nutrition and population (HNP), In 2002, Colombia agreed to a negotiation plan between social protection and the public sector (see Figure 2), where unions and the Public Health Institute regarding the costs and governments have a more direct relationship with service benefits of public health care as a condition for one of its loans. users or beneficiaries. The World Bank, consequently, has been promoting participatory mechanisms more aggressively In 2003, participatory mechanisms regained strength. For in- in the LCR in these sectors where users feel a more direct stance, Bolivia established Departmental Project Approval impact of an operation or the policies it promotes. 3 introduce P/SA/TM issues into Bank operations systematically and effectively through specific tools for clients to incorporate the voice of citizens into macro policy decision-making. Within this institutional framework, the LCR Civil Society Team has been working to strengthen PCE in the region's operational agenda, to promote inclusive governance through economic and sectoral reforms. Many Bank operational staff have become committed to this agenda. There is still much to do with respect to measuring the impact of civic engagement on efforts to improve public service provision. Such an assessment requires an extended period of time to observe Conclusions and Lessons Learned impacts. Nonetheless, it is unquestionable that citizens' rights and governance have been promoted. Work continues to Participation is less evident in the loan design process than create capacities within civil society to monitor public in the reforms promoted for social accountability mecha- management and service delivery. At the same time, the Bank nisms supported by operations. This may limit potential has supported governments to provide greater transparency outcomes compared to what might be achieved if citizens were engaged more in defining policy goals from the outset. and access to information so that citizens can monitor More participation in the initial discussion of loan priorities governmental activities. and design would help build social consensus that would facilitate stakeholder support in implementing policies and **************** reforms. It is equally important, when designing participa- tory accountability processes, to involve stakeholders whose participation will be required to implement the ac- Notes tions supported by the loan. It would be interesting to assess whether social accountability of programs is more This note reports on findings for the Latin America and the efficient if civil society or direct beneficiaries have been Caribbean Region only, up to June 2003, but the research engaged in the design of programs or in setting priorities. covers all six regions, and FY00-04, and has benefited from financial support from the Government of Denmark. Finally, it is important to note that despite problems and inconsistencies, World Bank efforts to promote participation The authors acknowledge the support of Steen Lau Jorgensen, Social Development Director, World Bank, and and civic engagement as part of its institutional policies are Jeff Thindwa, Interim Coordinator of the Civic Participation bearing fruit. Building on the approach outlined in the Group, Social Development Department, whose efforts are Comprehensive Development Framework, the Bank is now helping to institutionalize monitoring and assessment in clearly focused on engaging civil society in policy dialogue, Bank operations on public transparency, accountability, an approach that is evident in the preparation of Poverty community participation, and social surveillance. Annika Silva-Leander, Social Development Expert at the World Reduction Strategy Papers and Country Assistance Bank, assisted in the design of research methods and Strategies. This approach is gradually being extended to contributed valuable ideas throughout the investigation. policy-based and other lending operations, where civil society representatives are increasingly involved in the design, implementation and monitoring. About the Authors The Bank has appointed Civil Society Specialists in its William Reuben, Senior Social Scientist, in the Social country offices worldwide, and they, and the team of experts Development Group in the Environmentally and Socially Sustainable Development Department of the World Bank's based in Washington DC, have been working consistently to LatinAmerica and the Caribbean Region. BlancheArévalo is a introduce civic engagement into the policy agenda. These Consultant with the Region's LACPREM group. civil society experts have influenced project managers to 4