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G OV E R N A N C E and ANTICORRUPTION A S S E S S I N G R E S U LT S I N P R O J E C T S

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This study is one in a series of papers that describe project-level approaches to governance and corruption issues, FEBRUARY 2010 identify their results, and draw lessons that other task teams may be able to use.

Case Study 6 This project, which aims to ensure that poor people have access to basic services, is one of the few World Bank-supported projects that incorporate both

Ethiopia’s Protection of Basic Services: Combining Supply- and Demand-Side GAC Measures

supply- and demand-side measures to deal with GAC risks. It adopted financial, fiduciary, and transparency tools to use its resources more efficiently, and it deployed tools to strengthen citizen voice and capacity to make the government accountable and more efficient at providing services.

The Project Following Ethiopia’s political crisis in 2005, a number of development partners decided not to continue providing direct budget support to the country. Ethiopia introduced the Protection of Basic Services (PBS) in 2006 to help ensure that poor people would continue to have access to basic services and to sustain the momentum toward meeting the country’s immense Millennium Development Goal challenges. PBS contributes to expanding access to and improving the quality of basic services in education, health, agriculture, water supply and sanitation, and rural roads delivered by subnational governments, while continuing to deepen transparency and local accountability in service delivery. The program, largely implemented through Government systems, is supported by 10 development partners that contribute to increased spending in the regions and woredas.1 Funds are effectively earmarked for transfer to lower levels of government. Since 2006 IDA has committed the equivalent of US$970 million to PBS.

Diagnosis of the Problem Governance, transparency, and accountability issues meant that the risks to PBS were considered substantial when the project was originally approved in 2006. As the Project Appraisal Document noted, PBS faced the dual challenge of capacity constraints at different tiers of government and an institutional legacy of top-down

G OV E R N A N C E and ANTICORRUPTION

  A woreda is an administrative division of Ethiopia, equivalent to a district. Woredas are divided into kebeles, smaller administrative divisions, each equivalent to a neighborhood or a localized group of people. 1 

A S S E S S I N G R E S U LT S I N P R O J E C T S

http://gacinprojects

This study is one in a series of papers that describe project-level approaches to governance and corruption issues, identify their results, and draw lessons that other task teams may be able to use.


GOVERNANCE and ANTICORRUPTION ASSESSING RESULTS IN PROJECTS

instructions rather than downward accountability to the people. At the project level, there were risks that end-users might not apply funds to basic services or allocate them fairly to benefit the poor. The idea underpinning PBS is that accountability and transparency measures can help ensure greater project-level efficiency by strengthening supply-side and demand-side mechanisms so as to provide spaces where citizens can link up with service providers and governments. PBS’s support for accountability and transparency is seen as critical, because the benefits of shifting service delivery closer to people would be lost if beneficiaries are not in a position to put demandside pressure on local governments to perform. Transparency, accountability, and other efficiencyrelated measures would also ensure that corruption would be kept at low levels. It should be noted that corruption has not been documented carefully in Ethiopia, and international stakeholders argue that levels of corruption may be far lower than elsewhere.2 The Bank has embarked on a series of sector-level studies that will throw light on corruption hotspots, the nature of this corruption, and the incentives of the actors involved.

Mitigation Measures PBS is predicated on the Government’s commitment to good governance and service delivery as central elements of its poverty reduction strategy. To capture this commitment, project components were designed around a set of core principles: additionality, fiduciary responsibility,

  Bribery is lower in incidence and amount; corruption in the civil service is not a systemic feature, but it occurs in isolated instances; and levels of control are high, as are the merits and ethics of Ethiopian civil servants. A culture of integrity exists to a significant degree around social services, and there has been a push at the highest level of Government to send the message that Ethiopia must not follow the path of endemic corruption seen elsewhere in the region.

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fairness, and transparency/accountability. Acceptable results from the monitoring of these principles are conditions for disbursement of the bulk of PBS resources; information on how the money is being spent is provided to donors and local communities through strict quarterly reviews (Joint Budget and Aid Reviews, or JBARs). Additionality. Agreed increases in resources are

made available to subnational governments, and subnational spending on basic services increases commensurately. Donors monitor (a) data on budget and actual expenditures by functional/ sectoral and subsectoral classification as well as broad economic use, and (b) data on all revenues and financing. Fairness. Agreed resources reach poor people

fairly, irrespective of their political allegiances. The project requires that budget allocations of block grants from the federal Government to the regions, and from the regional governments to woredas, be based on transparent, fair, and rules-based formulas; actual transfers of these grants are expected to be equal or close to their budget allocations, and there should be good reasons for any deviations. Through the JBARS donors monitor the annual intergovernment allocations and actual monthly disbursements of block grants. Fiduciary. Fiscal reporting on the use of resources

is accurate and timely. Expenditures are tracked through regular reporting for the JBARs, and technical assistance is provided. Donors monitor budget data and expenditures and review the implementation of agreed initiatives and actions to strengthen public financial management (PFM) performance and fiduciary standards at all Government levels. The Office of the Federal Auditor General (OFAG) audits the use of all funds PBS provides through the Government’s public financial systems and carries out an enhanced continuous audit of regions’ use of funds and the timeliness and accuracy of reporting.


Case Study 6

Ethiopia’s Protection of Basic Services

Table 1  Mitigation and Results at a Glance Conditions at entry

GAC mitigation measures

Results

• Hierarchical and topdown system • Corruption not considered systemic • Weak civil society capacity • PFM, accountability, and transparency weaknesses and risks • Weak PFM capacity at local level • End-users may not apply funds to basic services or allocate them fairly

• Block grants consisting of untied, discretionary funding • Fairness and fiduciary tests • Financial transparency tools: countrywide posting of national, regional, and local budget and expenditure information, laypersons’ budget templates, extensive budget literacy training • Social accountability tools: rights-based approach, community scorecard, citizens report card, and participatory budgeting focal group; interface discussions; participatory planning and monitoring

Outputs: • Budgeted resources disbursed according to the fiscal transfer formula to all woredas in regions without political distortion • 95% of local governments audited • 90% of woredas post their budgets in public places at local level • 1500 participants trained on budget literacy and other budget education activities through media • Increased citizen awareness of budget • Increased citizen awareness of rights and responsibilities • 12 social accountability pilots implemented in 86 woredas (meetings with service providers and action plans)

Transparency/accountability. To be accountable

to communities, the Government provides information about budget and facilitates demandside governance actions. A recent Financial Transparency and Accountability Survey found that the overwhelming majority of the respondents have no knowledge of the budget and the budget process and that they are not engaged in decisions about the delivery of basic services. Citizens said that it is especially important for local government to be responsive, but that they have few opportunities for engagement with local governments. Therefore, PBS aimed at deepening transparency by supporting Government-implemented (i.e., supply-side) activities at the regional/city, woreda, and sub-woreda levels to enhance transparency around public budget procedures and foster broad engagement of citizens and citizen representative groups on public budget processes and public service delivery. These components are monitored through such indicators as improvement on citizens’ access to public budget information; availability of

Outcomes: • Instances of improvement in service delivery (e.g., less absenteeism of health officers and improved medicine supply)

sound baseline information showing citizens’ understanding of and engagement in the public budget process; number of regions and woredas that disclose public budget information at regional and subregional levels; number of woredas that post “laypersons’” budgets; strengthened engagement of civil society organizations (CSOs) on budget literacy and social accountability; and improvement in the dialogue between government and CSOs on issues of social accountability and basic services delivery. To increase Government’s responsiveness and accountability, PBS includes tools focused on strengthening the demand side of Government service delivery—for example, measures to support capacity building for, and piloting of, large-scale pilot initiatives to strengthen citizen voice, support citizens and CSOs in becoming more familiar with budgets, and engage citizens and CSOs in social accountability and service delivery. For the future, PBS wants to provide a platform for curbing any corrupt practices that do occur at the point of service delivery—for

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GOVERNANCE and ANTICORRUPTION ASSESSING RESULTS IN PROJECTS

example, absenteeism of teachers and health workers, informal payments, or payment for drugs that are meant to be free. PBS also includes financial and social accountability components to address Government capacity constraints: training leaders and staff in technical and procurement matters, providing dedicated staff in Government units that deal with PFM, and sensitizing subnational staff to accountability and transparency principles. Other components are helping build CSOs’ capacity to support social accountability. PBS I did not have an anticorruption action plan (ACAP), but by including the components and tools described above it addressed corruption- and efficiency-related issues. For PBS II, however, to avoid corrupt practices in the future and to respond to the Bank’s renewed emphasis on governance and anticorruption (GAC), the Government developed an ACAP that maps corruption and develops responses to it.

Results Recent research indicates that under PBS Ethiopia has made strong progress in expanding and improving the delivery of basic services, helping to improve the lives of more than 70 million rural Ethiopians. Over the course of the program, total basic service spending by regions and district governments has almost doubled, from US$505 million in 2004–05 to US$1,149 million in 2008– 09. Between 2005 and 2009, local governments nationwide were supported in hiring an additional 264,000 primary school teachers and placing 35,000 health extension workers, resulting in a net primary school enrollment rate that increased from 68.5 percent to 83.5 percent, and a child immunization rate that improved from 70 percent to 81.6 percent. Over the same period, rural access to potable water increased from 46 percent to 61.5 percent. Careful monitoring of the components related to the four principles facilitated the achievement of these results.

Figure 1  PBS GAC Results Chain Diagram Fairness tools

Budgeted resources disbursed to all woredas in these regions without political distortion Anecdotal evidence

Fiduciary tools and PFM capacity building

Resources are being used effectively and efficiently

95% of local governments audited PFM strengthened

90% of woredas post their budgets in public places at local level FTAS as a diagnostic tool

Transparency tools

1500 participants trained on budget literacy and other budget education activities through media Increased citizen awareness of budget

Behavioral change as citizens push for change

Increased citizen awareness of rights and responsibilities Social accountability tools

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12 social accountability pilots implemented in 86 woredas (meetings with service providers and action plans)

Evaluation and interviews

Instances of improvement in service delivery (i.e., less absenteeism of health officers and improved supplied of medicine)


Case Study 6

Ethiopia’s Protection of Basic Services

Fairness. A 2009–10 “fairness review” confirmed

that 100 percent of the budgeted disbursements from the federal Government to the regions were made, and that the block grant transfers to regions and woredas were made in accordance with intergovernmental fiscal rules, ensuring fair, rules-based, and transparent allocation of the PBS resources. Moreover, the review did not find any systematic deviations in disbursements based on political reasons. Fiduciary. PBS has had a significant impact in

strengthening government PFM and ensuring that funds are used for the agreed purpose. Nationwide, 95 percent of all woredas have been audited. While continuous audits were intended in part to satisfy donors that funds disbursed under PBS had been properly used, they have also been helpful in identifying and rectifying weaknesses at the local government level and have shed important light on the strength of internal financial control systems at subnational levels. Reviews have found that issues raised in the audits have been addressed through appropriate actions. PBS has also supported the efforts of the Ministry of Finance and Economic Development (MOFED) to enhance the capacity of the national, regional, zone, and woreda administrations to carry out core financial operations and reporting, including financing additional accountants, IT personnel, and hardware and software. This capacity-building effort has allowed MOFED to improve its response time in providing the required JBAR financial information. At the same time, technical support from MOFED in terms of computers, vehicles and training, and related basic equipment allowed OFAG to carry out quarterly continuous audits in about 730 of the 770 woredas. A Public Expenditure and Financial Accountability (PEFA) assessment carried out to provide information on the country’s PFM status has shown particularly good performance on the budget’s credibility, comprehensiveness, and transparency.

The report also identified areas for improvement, and the Government has committed to take appropriate actions. Transparency/accountability. PBS has helped to deepen financial transparency at the federal, regional, and woreda/local levels and to encourage increased citizen participation and voice in demanding improved access and quality of basic service delivery. To improve citizen access to public budget information, in 2006 the Government started posting a range of information on the Web: detailed fiscal information, quarterly updated federal and regional fiscal data, block grant allocations, and monthly transfers from regions to woredas, including woredas’ share of revenue. The Government has recently begun distributing, and posting on its website, guidelines and directives to regions, and it continues to promote the use of financial transparency and accountability tools that help citizens understand woreda budgets and delivery of basic services and provide feedback about their priorities.

At the local level, audits and JBARs field visits found that, for the first time ever, 90 percent of woredas have posted their budgets in public places—on notice boards, in marketplaces, and in woreda and kebele offices—and some have gone further and are publishing their budgets in local newspapers and posters for wider dissemination. Moreover, woredas have set up opinion boxes by which they gather citizens’ comments and complaints. Because literacy is low in Ethiopia, the Government has designed simplified visual tools that use minimal text and numbers to convey information on planned and actual budget expenditures at the woreda and facility levels. In addition, under a broad-based Budget Literacy Training (BLT) initiative, some 1500 participants—regional, woreda, and kebele council members, staff from sector offices, CSOs, and journalists—have received budget literacy training in five states. Training modules are prepared for TV and radio transmission to provide budget education for the public at large.

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GOVERNANCE and ANTICORRUPTION ASSESSING RESULTS IN PROJECTS

PBS’s demand-side efforts to strengthen citizen voice supported 12 CSOs and 41 partnering organizations with funding for capacity-building social accountability pilots in 86 woredas and over 300 kebeles across the country. The CSOs tested several tools in the projects: a community scorecard, a citizen report card, and participatory budgeting (budget literacy and expenditure tracking). All CSOs provided awareness and training on social accountability to citizens and service providers using such interactive training approaches as identification of problems through focus groups and interface meetings, in which service providers and service users discuss identified problems, recommend solutions, and agree on action plans. Evaluations of the social accountability pilots indicate an increased awareness of citizens’ rights and responsibilities and improved communication among service providers, communities, and CSOs. Interviews with kebele and woreda officials substantiate the evaluations’ findings that in the pilot areas, service providers now offer better services to citizens and are more accessible to service users (see Box 1). Likewise, there appears to have been a positive shift communities’ ownership of the service delivery process and of their own roles and responsibilities. Although those pilots were intended to test social accountability tools, in a number of cases signs of sustainability are already emerging—or example, in the form of committees and councils established after the project was completed. Other examples: zz

zz

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The board of a health center in Tigray Region now includes ordinary citizens as well as health officials and representatives of the government and the private sector. In the Harari Region, a woreda asked the CSO for the roster of individuals who had received training in budget literacy. The woreda council invited these people to participate in the

Box 1  Social Accountability Results Kasech Assefaw Health Center, Mekele. The health center was part of the social accountability pilot implemented by the Women’s Association of Tigray. The community scorecard used at the beginning of the project identified two major problems: lack of sufficient medicines and unsanitary conditions. In subsequent interface meetings, service users and providers discussed the problems and agreed on solutions that were incorporated into an action plan for improving the conditions. As a result, the quality of the health center and its services—monitored by both staff and users—have improved; the bottlenecks in the supply of drugs have been addressed; the health center is clean; staff attendance has improved; and community representatives are now formally participating in decision-making, with a representative on the health center’s board.

Elementary school, Somali Region. The school was built after the community and the Government discussed the problem of school facilities. A new water point was dug to provide clean water to the students and staff, and separate washrooms for male and female students were built. A PTA was established. Since the formation of the PTA, teachers and parents meet regularly to discuss problems facing the school. Absenteeism among both teachers and students has decreased. Source: ICR, PBS I.

council meetings on the woreda budget, and the council very much appreciated their inputs. PBS II foresees institutionalizing capacity building by extending it to target groups, including civil society leaders, and expanding knowledge on social accountability to strengthen overall capacity across a range of actors and organizations. PBS II will provide funding to ensure that the assets accumulated through PBS I—processes, products, key resource people, and organizations—are captured and taken forward into the implementation of Phase II.


Case Study 6

Ethiopia’s Protection of Basic Services

Lessons Learned Project Design zz

zz

Combination of supply – and demand side governance measures. PBS combines

measures aimed at ensuring projectlevel efficiency (fairness and fiduciary) with demand-side measures on transparency and accountability. Tackling both these approaches at the same time has produced better results than could have been achieved by dealing with them separately. Financial reporting and audits. The Bank’s timeline requirements for financial reporting and annual audits for investment loans are not well suited for a project like PBS, with broad geographical coverage using country systems in a large and recently decentralized country. Timelines for financial reporting and audits need to be more flexible to better adapt to the country’s operational characteristics.

service providers now offer better services to citizens and are more accessible to service users. zz

zz

zz

zz

Project Implementation zz

zz

Government commitment. The Ethiopian

Government demonstrated strong ownership for most PBS activities, agreeing, for example to a component financing independently implemented social accountability projects, overseen by a high-level Steering Committee with membership by three important government ministries and chaired by a State Minister of Finance. The Ministry of Finance played an increasing leadership role in ensuring that the conditions for implementation of financial transparency and accountability and social accountability activities were in place, and negotiating with other parts of government at various levels. Government ownership contributed to the overall successes in the project’s development outcomes. Social accountability. A number of lessons can be learned from the implementation of the 12 pilots in PBS, whose initial results show that

zz

zz

Extensive training and supervision may be needed throughout the implementation process to overcome CSOs’ limited knowledge and experience of the concept and practice of social accountability and ensure the inclusion of members of the local councils and service providers in training. The community scorecard turned out to be the most appropriate of the tools as it is user-friendly and provides an appropriate basis for interface meetings between citizens and service providers. Interface meetings reviewing assessments of the services provided are very useful, allowing service users and providers to agree on action plans. Participatory budgeting was less useful in the pilots, because it seemed too difficult to use for most citizens, many of whom can neither read nor write. Moreover, in most cases only a very small portion of the woreda budgets is allocated for capital investments on which citizens could potentially have a say. CSO pilot projects need to remain fairly simple: they should cover only one region, the project should be implemented within a 100 km radius, and it should implement only one social accountability tool. Greater complexity is often more than the CSO and community can handle. The process of introducing new financial transparency and social accountability initiatives has to be gradual, allowing sufficient time for capacity building and attitudinal change at different levels of government and in communities and civil society. For example, at the beginning citizens hesitated to address poor service delivery as they had “too much respect”

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GOVERNANCE and ANTICORRUPTION ASSESSING RESULTS IN PROJECTS

for public service providers. To mitigate this problem, future efforts might provide additional awareness and training to both service providers and service receivers, mixing these two groups together from the beginning and discouraging separate training. To address the cultural difficulties involved in introducing the concept of social accountability to traditional communities, the CSOs could receive more intensive training and guidance in how to handle initial community meetings. Moreover, in the future the woreda-level administration (including the councils), the CSOs, and citizens should all be engaged

References GTZ. “Piloting Social Accountability in Ethiopia, Analytical Report with Case Studies, 2009 GTZ PBS Component 4 Ethiopian SA Project End-term Report, July 2009. GTZ PBS Component 4 Ethiopian SA Project Completion Report, Nov 2009. Joint Review. Ethiopia Protection of Basic Services (PBS) Program, Phase II Joint Review and Implementation Support Mission, Aide-Mémoire, November 12–20, 2009 PEFA 2007. PEFA: Regional Public Financial Management Performance Report, Draft Report, April 2007. REST, GTZ, ESAP 2008. PBS SA in Pilot Project in Six Weredas of Tigray Region. World Bank. Protection of Basic Services, Project Appraisal Document, May 25, 2006. http://projportal.worldbank.org/servlet/secmain?pag ePK=219321&piPK=219326&theSitePK=213348&c onceptattcode=ET-Protection+Of+Basic+Services+-+P074015~579458|Project%20Appraisal%20Document~540656&PSPID=P074015&menuPK=109012

in designing the project. Additional training through the implementation stage and close monitoring (including of the effectiveness of the training) is also recommended.

Monitoring and evaluation zz

Combination of monitoring tools and drive to results. A robust monitoring system was put

in place in PBS so that donors and government could supervise project implementation through audits, reviews, field visits, and so on. Specific “tests” (i.e., fairness, fiduciary) linked performance to disbursements of funds.

World Bank. Protection of Basic Services, Implementation Completion Report, May 30, 2010. http://projportal.worldbank.org/servlet/secmain?pagePK =219321&piPK=219326&theSitePK=213348&conceptatt code=ET-Protection+Of+Basic+Services+--+P074015~5 79458|ICR~540632&PSPID=P074015&menuPK=109012 World Bank. Protection of Basic Services, Project Paper, November 30, 2007. http://projportal.worldbank.org/servlet/secmain?pag ePK=219321&piPK=219326&theSitePK=213348&c onceptattcode=ET-Protection+Of+Basic+Services++Additional+Financing+--+P106559~941488|Project%20 Paper~810308&PSPID=P106559&menuPK=109012 World Bank. Protection of Basic Services, Project Appraisal Document Phase II, April 22, 2009. http://projportal.worldbank.org/servlet/secmain?pagePK =219321&piPK=219326&theSitePK=213348&conceptatt code=ET-Ethiopia+Protection+Of+Basic+Services+Progr am+Phase+II+Project+--+P103022~913120|Project%20 Appraisal%20Document~540656&PSPID=P103022&me nuPK=109012

G OV E R N A N C E and ANTICORRUPTION

This study was prepared by Tommaso Balbo di Vinadio under the supervision of Ivor Beazley and

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NOITP

with the assistance of several World Bank staff: Ana Maria Muñoz Boudet, Daniel Cotlear, Ian Walker, Inés Kudo, and William Reuben.

A S S E S S I N G R E S U LT S I N P R O J E C T S

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