44853 :: No. 111 / February 2008 Building Roads to Democracy? The Contribution of the Peru Rural Roads Program to Participation and Civic Engagement in Rural Peru Projects involving community participation often give communities responsibility to identify, prioritize, plan and implement small-scale investments. While the approach generates high ownership and relevance, it has often been considered inappropriate for large infrastructure projects with requirements of economies of scale, technical standards and efficiency. The Peru Rural Roads Program (PCR) finds the right balance between the two approaches by integrating community participation in a large-scale rural roads program with best practices, both in terms of flexibility and adaptability in project implementation,, increased ownership and efficient management of road assets. Its positive impacts on rural transport, local economic development and local governance in Peru have earned it best practice awards from Peruvian civil society, from the Inter-American Development Bank and from the World Bank (President's Award for Excellence 2001). This note highlights its innovative design features and focuses on its impact on governance1.Governance outcomes that are particularly highlighted include strengthening integrated participatory development planning, increasing local institutional capacity, promoting transparency in local governance and fostering civic engagement. The Peru Rural Roads Program (known by its (of which US$50 million is a loan from the WBG), acronym, PCR) is a best practice example of how complemented with significant other resources from community participation in a large-scale rural roads other donors and municipalities (following ambitious program can contribute to rural transport, local fiscal decentralization reforms since 2002). economic development and local governance. The PCR was initiated in 1995 under a central agency Three main achievements of the program are: within the Ministry of Transport and Communications (Provias Descentralizado), to · Rural transport: the program has support the decentralization of rural roads rehabilitated and maintained 15,000km of management to local governments1. The first phase rural roads and 7,000km of paths (used invested a total of US$250 million (of which US$90 primarily by women and children). This has million was a loan from the World Bank Group) in increased the availability of transport services the rehabilitation and maintenance of rural roads in by 150 percent. Quantifiable benefits of the country's 12 poorest departments, representing increased access to transport include a 10 about 70 percent of the rural population of Peru. The percent increase in boys' access to secondary program is now in its third phase and is scaling up to education; a 7 percent increase in primary cover the entire country, investing US$150 million enrollment among girls; 53 percent in time savings, 78 percent lower travel fares for 1 passengers and 18 percent travel fare Past experience showed the difficulty of centrally managing a large rural road network, particularly for tertiary roads and reduction for freight. paths, most of which are not even identified on maps. Box 1: Stages of participation in the Rural Roads Program Citizens participate in identifying and prioritizing roads in several steps. District mayors use local radio (including in quechua) to mobilize communities to participate in the identification of roads to be rehabilitated and maintained. Communities create maps of local paths and roads, which are communicated to the District mayor for incorporation into the District roads inventory. Workshops are organized between communities and District mayors to prioritize investments: a prioritized map of roads to be rehabilitated and maintained is prepared, and an agreement is signed among District and Provincial mayors on the roads to be funded by the program. · Local economic development: 650 Innovative Design Features microenterprises comprising community 1. Community participation in rural roads members (Microempresas de Mantenimiento Vial Rutinario, or MEMV) have been created PCR was designed in recognition that road to carry out maintenance activities on construction and rehabilitation require technical rehabilitated roads. MEMV have generated expertise, a skilled labour force and equipment nearly 6,000 jobs, of which a quarter for that are beyond the scale and capacity of women. In addition, in order to multiply the communities. Community control in this case can impact of rural roads on local economic result in significant efficiency losses and poor development, the program created a technical standards. Prior to PCR, road mechanism for funding productive activities construction and rehabilitation was generally in areas surrounding the roads, the Local poorly executed with municipalities often doing Development Window (Ventana de the work "in house" with their own civil servants Desarrollo Local, VDL). and equipment. Under the program, rehabilitation is contracted out by the central agency (Provias · Local governance: In the broader context of Descentralizado) to private construction firms, decentralization reforms engaged in since through a transparent bidding process (this task is 2002, innovative institutional arrangements being transferred to Provincial municipalities supported by the program over the past during the third phase)2. decade have promoted a more inclusive and democratic local political culture, resulting Unlike centrally delivered roads programs, PCR more efficient decentralized institutions and gives communities a key role in two important increased participation of previously marginal stages: (a) communities and their local rural communities in local decision-making, representatives identify and prioritize the roads particularly among women and indigenous to be rehabilitated and maintained, providing communities. accurate information on which transport routes are important for communities (see box 1); (b) The program's success in achieving these impacts is due to both design and implementation factors. 2 Peru has four layers of government, with a total of 1,800 Districts in 200 Provinces and 24 regions (`departamentos'). 2 communities, organized into microenterprises (MEMV), carry out the maintenance of rural Box 2: Supporting Integrated Territorial Development roads. Prior to the program, roads requiring maintenance were neglected and remained The Provincial Roads Institute is an institution created by impassable for decades. Under the program, the program to encourage districts to coordinate level to communities are provided with training and define and implement province-wide rural transport incentives to directly participate in the policies. Its impact has gone beyond transport to the maintenance of the roads they use. Unlike definition of a joint vision for territorial development. By rehabilitation, maintenance is labor intensive and creating a space for coordination among local does not require a skilled labor force, specific stakeholders (district and provincial mayors, private sector service providers, transport providers, NGOs etc), technical expertise or heavy equipment. the PRI has fostered strategic development planning across the provincial territory which has been replicated Community participation generates ownership in other sectors such as tourism and natural resource and ensures sustainable maintenance (and planning. consequently access) of rural roads, since In San Martin, the coordinated approach supported by communities using and living close to the roads the PRI for a joint vision for roads is being applied to have a direct interest in maintaining them. natural resource, tourism and security planning. The Maintenance is a labour-intensive and continuous provincial mayor of San Martin believes that other activity for which communities have technical stakeholders in the province ­ including NGOs ­can capability, with training, supervision and support avoid duplication of efforts by using the PRI For coordination. Similarly, the Provincial Roads Institute in from the program. Yungay, which initially focused on roads planning, is now addressing provincial education and rural 2. Integrated Territorial Approach to Planning electrification, both of which require coordination among A second distinctive design feature has been the districts. program's support for an integrated territorial approach to local development planning and decentralization of roads construction and management, in the broader context of Peru's maintenance, while avoiding the fragmentation decentralization reforms (see Box 2). The between Districts of transport planning and program created a new institution for Province- management. wide strategic roads planning, the Provincial Road Institutes (Institutos Viales Provinciales, 3. Local Development Window (VDL) to IVP)3. IVP are governed by a Provincial Road Stimulate Local Economic Development Board that brings together mayors at District and A third distinctive innovation of the program is to Provincial level. IVPs plan, coordinate and stimulate both integrated local planning and manage roads rehabilitation and maintenance multiply the impact of rural roads on the local across the province. The IVPs establish close economy through a mechanism to promote the cooperation between District and Provincial emergence of sustainable productive activities in mayors and facilitate coordination with other areas surrounding the roads and help them find a local stakeholders (communities, private sector sponsor. The Local Development Window service providers, transport providers etc). This (Ventana de Desarrollo Local, VDL) performs has fostered province-wide strategic planning of the identification and screening of productive roads policy and programs. On a pilot basis, some activities in areas around the roads. During the IVPs are expanding their responsibilities to other second phase, the VDL helped leverage a total of infrastructure sectors and could progressively US$7.2 million in 85 Districts, and identified 850 become Provincial Infrastructure Institutes. productive activities with business potential. A Through careful institution-building at Provincial business plan was prepared for the 167 initiatives level, the project has supported the with the greatest potential, of which 72 found a sponsor. The Local Development Window (VDL) 3A total of 134 IVP have been created across the has triggered small community enterprises to country to date, and have elaborated 124 Participatory associate themselves into cooperatives, to connect Provincial Roads Plans 3 with other funding sources and exchange experiences and skills (Box 3). Box 3: Multiplying the economic impact of rural To foster integrated development planning and roads on local development: Cooperativa Cristo Rey strengthen the management and planning capacity of local authorities, the VDL also helped district Under the second phase of the program, the Local municipalities prepare a participatory district Development Window (Ventana de Desarrollo Local) development plan (81 district plans were elaborated leveraged US$8.2 million in 85 districts to promote the emergence of sustainable productive activities in areas under the second phase of the program). PCR surrounding the roads. In Lamas province, VDL partnered with a Peruvian NGO (Caritas Peru) to Pamashto supported a local association of coffee provide training in project management, work with producers. They partnered with a local NGO Caritas and local communities to develop proposals, organize connected with an exporter, Exportaciones Amazonicas participatory planning sessions and provide technical Nativas, to gain access to export markets. Further assistance during implementation. financial support from USAID allowed them to diversify production into other export crops. The producers have 4. Supporting the Local Private sector now formed a cooperative (Cooperativa Cristo Rey) with more than 300 members which generates its own The program strengthened the institutional and resources, which are managed by a committee and financial sustainability of rural road maintenance by provide loans to members. Their increased size and creating microenterprises for road maintenance, capacity have allowed them to renegotiate the price of comprising members of communities using and coffee per ton, obtain their own brand and create a living near the roads (Microempresas de tasting center. The example of Cooperativa Cristo Rey Mantenimiento Vial Rutinario, or MEMV). To date has encouraged other producers in the region to the program has created around 650 MEMV, participate in the Pamashto VDL. The president of Cristo generating 6,138 permanent jobs. MEMV are formed Rey cooperative says `the producers see this and believe by temporary workers, contracted on a 3-month basis that if they come together, they can do it to'. (to rotate and share benefits among community members) and a core group of permanent members motivated by electoral concerns. Decentralization (socios) for continuity in technical standards. To is relatively recent, but the respective roles of increase women's participation, project rules stipulate district and provincial local government is now that at least 10 percent of MEMV members should be well defined by municipal legislation. In practice, women. On-the-job training in technical and business however, there are still overlapping investments administration skills is provided to MEMV by teams in public works between the various levels of of young graduates contracted for a year (`monitores government. This situation has been improved in viales'). MEMVs are contracted by local government the provinces where the project has funded a following transparent procedures for contracting and participatory planning framework for roads payment. Contracts are results-based and supervisors investments. verify road maintenance carried out before payment is made. Finally, rehabilitation works performed by In the course of ten years of operation, the unique private contractors helped create 49,000 temporary design features of the PCR have strengthened jobs. These MEMV now form part of the local capacity for participation and civic engagement at private sector, and compete for contracts at the same local level and fostered province-wide coordinated level as other enterprises. development planning and management. This has strengthened inclusive democratic processes. What Has Been the Impact of PCR on Local Governance? 1. Strengthening the Network and Capacity of Local Institutions Historically, rural populations in Peru have been marginalized from decision-making. Electoral The program has increased the density of the local participation is lower in rural areas, particularly institutional network by supporting the creation of among women. Relations between citizens and new institutions at Province and community level, local officials tended to be hierarchical and strengthening local capacity for collective clientalist, and public expenditure decisions often decision-making. Around 650 microenterprises 4 (MEMV) and of 134 Provincial Roads Institutes Box 4: Sustainable Maintenance through (IVP) have been created under the program. Community Participation: Microempresas de Increased coordination between districts through Mantenimiento Vial the IVP triggered the creation of several associations of mayors that hold regular meetings The program ensures the sustainable maintenance of on the definition and implementation of joint rural road maintenance by creating microenterprises vision for territorial development. for road maintenance, comprising members of communities using and living near the roads MEMV participate at District level in the (Microempresas de Mantenimiento Vial Rutinario, or MEMV). To date the program has created around 650 participatory budgeting process, and at Province MEMV, which now compete for contracts with local level in the Provincial `Councils of Local government against each other and with construction Concertation' (Consejos de Concertacion Local). firms. In most cases, MEMV win the best bids, due to the experience and training in business skills they have 2. Increased Participation and gained under 10 years of the program. This element of Civic Engagement competition was introduced progressively. During the Participation in local elections increased by up first 10 years of program implementation, MEMV were contracted under direct contracting at a fixed price and to 10 percent in all of the departments where the did not compete. This gave them time to build capacity. project was implemented, particularly among Their incentive for performance came from result-based women and in the poorest departments where the contracts, with penalties if they roads were poorly program operates. maintained. Other countries (eg. Chile) tried to have microenterprise compete from the start of the project, Previously marginalized rural populations are but this did not work and private firms won all the increasingly making their voices heard. According to contracts. The case of Peru is interesting because a 2007 survey, the number of `revocatorias', a competition was introduced very progressively. mechanism by which local citizens voice their concerns and demand greater accountability of after the roads and minimize poor treatment of elected officials, rose in districts where PCR the roads, particularly in times of flooding. operates4. 3. Supporting a Province-wide Territorial The project has built local leadership and Approach to Rural Development management capacity. Skills and management experience gained through the program are being The creation of a new provincial institution for transferred as members of MEMV and IVP go on to roads planning and management bringing be elected to office in local government. The together District with Provincial mayors and regional president of Ayacucho is a former director stakeholders at all levels, has fostered of the Provincial Roads Institute, and there are 82 collaboration around a joint vision for territorial cases of directors of MEMV going on to occupy development. This approach has been replicated positions in local public administration. in other sectors beyond transport ­ several Districts are coordinating on joint tourism and Technical skills in participatory budgeting have natural resource management. also increased under the program as Province- level staff assist local officials to develop The program fostered a collaborative environment projects and technical proposals. and provided incentives to mayors to work together. In several provinces, associations of municipal Community ownership over the microenterprises mayors have been created to prepare joint projects to has increased the contribution of communities to present at provincial level for roads improvements road maintenance. Communities tend to look across several districts. 4. Increased Transparency and Accountability 4 "Impact of the PCR II in Democracy and Civil Engagement in As a result of the project, local authorities are the Rural areas of Peru", June 2007, World Bank. providing more information to citizens about 5 account status and resource use. Some the sustainability of services and infrastructure municipalities have invited MEMV to be part of without compromising on quality and standards; participatory budget sessions. Mayors have and how institutional innovations can have organized sessions in quechua and Spanish to positive impacts on local governance and inform the citizens of the program and discuss economic development. A number of factors wider local development issues. contributed to its success: Transparent bidding processes were implemented, improving efficiency and reducing · Flexibility and adaptability in project discretionary behavior. Predictable, transparent implementation: A thorough monitoring and procedures for procurement and contracting are evaluation framework and three impact particularly valued by microenterprises, who evaluations, combined with regular dialogue with have a more stable and conducive environment to project stakeholders, allowed innovation as compete for contracts through competitive lessons were retrofitted into implementation and procurement processes that don't favor particular design of subsequent phases. Through this interests. learning process, the participatory approach was re-tooled between first and second phases of the 5. Empowerment of Women project, to ensure active involvement of the most vulnerable groups and improve the participatory The project supported specific measures to promote monitoring system. The project has demonstrated women's empowerment in a traditionally male- during more than a decade a capacity to dominated sector. Gender training was provided to constantly innovate and build on a thorough project staff, local officials, community leaders and evaluation of past achievements. microenterprises; the Local Development Window targeted its support to productive activities to · Multiplying the economic, social and improve women's access; and the monitoring system institutional benefits of the roads project ­ tracked gender impacts. such as those derived from the MEMV, IVP and LDW ­ was a powerful engine in the Project outcomes illustrate how mainstreaming drive for sustainability. This was achieved gender in a rural transport operation can both through the creation of community contribute to women's empowerment and gender microenterprises for maintenance, and equity. Women's participation in microenterprises through investments in productive activities for maintenance reached 24 percent, more than under the Local Development Window at double the initial target of 10 percent. For LDW District level. projects, women's participation reached 40 · Engaging local institutions in an integrated percent. territorial development approach. The project strengthened District and Provincial The project's rural transport interventions capacity to plan not only roads rehabilitation increased the safety and access of women to and maintenance, but also wider development transport, improving their access to product and initiatives. Strengthening the province as the labour markets. Women's attendance and appropriate level for planning has enabled the participation in community meetings is more decentralization of responsibilities, without frequent. As a result of the project, 67 percent of fragmenting transport and development surveyed women said they felt safer traveling, and planning. 77 percent traveled more and further. 43 percent of women reported the project enabled them to This note was prepared by Catherine increase their income. McSweeney and Marisa Remy, and reviewed by Nicolas Peltier (TTL), Luz Caballero (Social Conclusions Consultant) and Nicolas Perrin (SDV). The Peru Rural Transport Project is a best Additional copies can also be requested via e- practice example of how community participation mail: socialdev@worldbank.org in a large-scale rural roads program contributes to 6