capacity issues in the implementation of a conditional cash transfer programme: the case of juntos...
TRANSCRIPT
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College of Social Sciences
School of Government and Society
International Development Department – IDD
Dissertation
“Capacity Issues in the Implementation of a Conditional Cash Transfer Programme:
The Case of Juntos in Peru”
Dissertation submitted in Partial Fulfilment of the degree of Master of Science (MSc)
in Governance and Development Management (2008-2009)
Student: Abel Canchari de la Cruz
ID: 0961771
Supervisor: Andrew Nickson
Word count: 13,471
September 2009
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Acknowledgements
I would like to express my gratitude to Professor Andrew Nickson, my personal tutor
and supervisor at the University of Birmingham, for his mentoring, guidance and
immense support. My appreciation also goes to Richard Batley for getting me
interested in public management and capacity development.
I am also indebted to the Ford Foundation International Fellowships Programme
(IFP). Thanks to all the team in Peru.
My warm thanks go to James Conder and Richard Gidwaney for their overwhelming
hospitality and friendship when I was a new arrival.
Also, many thanks to Wan Ching Chen, Karen Sunahara, Emily Tsuo, and all my
friends at the University of Birmingham.
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Acronyms
CCT Conditional Cash Transfer
CAS Contratación Administrativa de Servicios [Temporary Contract]
CGTP Confederación General de Trabajadores del Perú
[General Confederation of Workers of Peru]
CIAS Intersectoral Commission for Social Affairs
CONADES Conferencia Nacional sobre Desarrollo Social
[National Conference on Social Development]
CONFIEP Confederación Nacional de Instituciones Empresariales Privadas
[National Confederation of Private Business Institutions]
DNPP Dirección Nacional de Presupuesto Público
[National Directorate of Public Budget]
ENNIV Encuesta Nacional de Niveles de Vida [National Survey of Living Standards]
FONCODES Fondo de Cooperación y Desarrollo Social
[Fund for Cooperation and Social Development]
GDP Gross Domestic Product
HDI Human Development Index
IADB Inter American Development Bank
INEI Instituto Nacional de Estadística e Informática
[National Institute of Statistics and Informatics]
MEF Ministerio de Economía y Finanzas [Ministry of Economy and Finance]
PATH Program of Advancement through Health and Education
PACFO Programa de Complementación Alimentaria para Grupos de Mayor Riesgo
[Programme of Food Supplements for Groups at Highest Risk]
PCM Presidency of the Council of Ministers
PRONAA Programa Nacional de Asistencia Alimentaria
[National Food Assistance Programme]
RENIEC Registro Nacional de Identificación y Estado Civil
[National Agency for Identification and Civil Status]
SIS Seguro Integral de Salud [Comprehensive Health Insurance]
UNDP United Nations Development Programme.
WB World Bank
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Executive Summary
This dissertation analyses capacity issues in the implementation of Juntos, which is a
conditional cash transfer (CCT) programme, by taking into account five dimensions of
capacity as an analytical framework.
The study is underpinned by the literature on capacity developed by Hilderbrand and
Grindle (1997). Therefore, the implementation of Juntos is analysed in the light of the
five interconnected dimensions of capacity: the action environment, the institutional
context of the public sector, the task network, the organisation itself and the human
resources. The research question addressed is: in which of the five capacity
dimensions are the constraints greatest and affect the performance of Juntos?
Evidence suggested that the action environment did not hinder capacity; conversely,
the economic conditions allowed the government to have fiscal resources for funding
the programme and to have an increasing budget. The political context, also, was a
key factor for the continuity and the openness of the programme.
Concerning the institutional context of the public sector, the evidence points at this
being the source of the main constraints. The low absorption capacity of the budget
led to the shortage of supply of public services which undermined the attainment of
one of the programme’s objectives: to boost human development.
The task network represented a challenge because Juntos required the intervention
of other organisations for accomplishing its objectives. Juntos struggled to control the
activities carried out by these public agencies. It appeared that the weak
performance of the task network’s organisations affected the overall functioning of
the programme.
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Regarding organisation, Juntos’ governance structure stood out due to its power-
sharing feature of the Board of Directors, with representatives of the State the civil
society organisations and the private sector. It makes the programme more
transparent and accountable.
On the topic of human resources, the programme faced constraints in terms of
having short-term contract employees. Also, the lack of neutrality of the promoters for
monitoring the compliance of conditionalities generated a false sense of achievement
of targets. Finally, Juntos did not have influence on employees who belong to the
organisations of the task network, and the majority of those employees benefited
from having permanent status without incentives or penalties tied to performance.
Therefore, the implementation of Juntos revealed that the highest capacity
constraints were related to the institutional context of the public sector, and the task
network.
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Contents Acknowledgements ................................................................................................... ii
Acronyms .................................................................................................................. iii
Executive Summary .................................................................................................. iv
Chapter One: Introduction ........................................................................................ 9
1.1. Research objective ........................................................................................... 9
1.2. Research question ........................................................................................... 9
1.3. Methodology ................................................................................................... 10
1.4. Organisation of the dissertation ...................................................................... 10
Chapter Two: Theoretical Framework .................................................................... 11
2.1. Defining capacity ............................................................................................. 11
2.2. Dimensions of capacity ................................................................................... 12
2.2.1. The action environment ............................................................................ 12
2.2.2. Institutional context of the public sector .................................................... 13
2.2.3. Task network ............................................................................................ 14
2.2.4. Organisation ............................................................................................. 15
2.2.5. Human resources ..................................................................................... 16
2.3. Policy implementation and capacity constraints .............................................. 17
Chapter Three: Principal Features of Juntos ........................................................ 18
3.1. Juntos’ Objectives ........................................................................................... 18
3.2. The rationale ................................................................................................... 19
3.2.1. Poverty ...................................................................................................... 19
3.2.2. Human Development ................................................................................ 20
3.2.3. Inequality .................................................................................................. 21
3.2.4. Market Failure ........................................................................................... 22
3.3. Coverage ......................................................................................................... 22
3.4. The budget ...................................................................................................... 23
3.5. Targeting mechanisms .................................................................................... 25
3.6. The beneficiary and the amount of the transfers ............................................. 26
3.7. The conditionalities and services delivered by the government ...................... 27
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3.8. Organisational arrangements for implementation ........................................... 28
3.8.1. The Primary Organisations ....................................................................... 29
3.8.2. The Secondary Organisations .................................................................. 29
3.8.3. The Supporting Organisations .................................................................. 30
Chapter Four: Implementation of Juntos and Capacity Issues ........................... 31
4.1. The action environment ................................................................................... 31
4.1.1. The economic context ............................................................................... 31
4.1.2. The political context .................................................................................. 32
4.1.3. The social context ..................................................................................... 33
4.2. Institutional context of the public sector .......................................................... 33
4.2.1. The budget cycle in the public sector ....................................................... 34
4.2.2. The procurement and acquisition systems ............................................... 39
4.3. Task network ................................................................................................... 40
4.3.1. The Ministry of Education ......................................................................... 42
4.3.2. The Ministry of Health ............................................................................... 42
4.3.3. The Ministry of Women and Social Development ..................................... 43
4.3.4. The National Institute of Statistics and Informatics - INEI ......................... 43
4.4. Organisation .................................................................................................... 44
4.4.1. The governance structure ......................................................................... 44
4.4.2. The Board of Directors .............................................................................. 45
4.4.3.The Executive ............................................................................................ 47
4.4.4.The Transparency and Oversight Committee ............................................ 48
4.5.Human resources ............................................................................................. 49
4.5.1. The contract scheme ................................................................................ 49
4.5.2. Promoter’s lack of neutrality for monitoring compliance ........................... 50
4.5.3.Front-line employees and their accountability ........................................... 51
4.6. Capacity Constraints ...................................................................................... 51
Chapter Five: Conclusions ..................................................................................... 53
References ................................................................................................................ 55
Appendixes ............................................................................................................... 59
Appendix 1. Dimensions of capacity ...................................................................... 59
Appendix 2. Basic information on selected programmes ....................................... 60
Appendix 3. Social indicators of targeted regions .................................................. 62
Appendix 4. HDI in not-targeted regions ................................................................ 63
Appendix 5. Matrix of the Logical Framework, 2008-2011 ..................................... 64
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Tables Table 1. Peru: Human Development Index, 2007 ................................................................... 20 Table 2. Coverage of the Programme, 2005-2009 .................................................................. 22 Table 3. Conditionalities and outcomes ................................................................................... 28 Table 4. GDP growth, real annual variations (%) .................................................................... 32 Table 5. Phases of the budget process ................................................................................... 34 Table 6. The process of budget transference to sectors, 2005-2007 ...................................... 35 Table 7. Budget transference to sectors and level of execution .............................................. 37 Table 8. Members of the Board of Directors ............................................................................ 46 Table 9. Members of the Transparency and Oversight National Committee ........................... 48 Table 10. Ranking of Capacity Constraints ............................................................................. 52
Graphs Graph 1. Peru: evolution of poverty and extreme poverty, 1985-2008 .................................... 19 Graph 2. Evolution of Juntos’ Budget ...................................................................................... 23 Graph 3. Budget distribution according to expenditure categories (%) ................................... 25 Graph 4. Overall level of budget execution of Juntos, including sectoral expenditure ............ 38
Chart Chart 1. Governance structure ................................................................................................ 45
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Chapter One: Introduction
The Programme of Direct Support to the Poorest - Juntos, which means “together”,
is a conditional cash transfer (CCT) programme being implemented in Peru since
August 2005. Juntos represents a new generation of social protection programme,
therefore a new approach for poverty reduction and fostering human development,
and it is placed among the principal ones within the social policy framework. This
programme has been designed taking into account the lessons learnt from the
implementation of CCT programmes across Latin America such as Oportunidades in
Mexico, Bolsa Familia in Brazil, Familias en Accion in Colombia, Puente-Chile
Solidario in Chile, among others.
However, there is not enough research regarding capacity issues in the
implementation of CCT programmes, because the existing literature mainly focuses
on the effectiveness of this kind of intervention.
1.1. Research objective
To analyse capacity issues in the implementation of Juntos, by taking into account
five dimensions of capacity as an analytical framework: the action environment, the
institutional context of the public sector, the task network, the organisation, and the
human resources.
1.2. Research question
In the light of the objective it is legitimate to ask the following research question:
• In which of the five capacity dimensions are the constraints greatest and
affect the performance of Juntos.
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1.3. Methodology
This is a qualitative study with a case-study approach because it will analyse the
implementation of a specific social programme. The information has been collected
using documentary analysis of secondary sources such as evaluation and monitoring
reports, minutes of the Board of Directors meetings, and official web pages. The
theoretical framework has been developed from the existing literature.
1.4. Organisation of the dissertation
Besides the introduction, the second chapter develops the theoretical framework with
regard to capacity; then it elaborates on the five dimensions of capacity, and at the
end it briefly analyses the relationship between capacity issues and policy
implementation.
The third chapter analyses the main features of Juntos: its objectives, rationale,
coverage, the budget, targeting mechanisms, the beneficiaries and the amount of the
transfers, the conditionalities and services delivered by the government, and the
organisational arrangements for implementation.
The fourth chapter presents the empirical evidence with regard to the five capacity
dimensions, and highlights the constraints, if any, in the implementation of Juntos.
The final chapter concludes highlighting the findings related to the five dimensions of
capacity.
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Chapter Two: Theoretical Framework
2.1. Defining capacity
At the outset it is important to define what it is understood by capacity in the public
sector. A straightforward definition of capacity is provided by Hilderbrand and Grindle,
as “...the ability to perform appropriate tasks effectively, efficiently, and sustainably”
(1997: 34).
Appropriate tasks can be seen as those suitable or right for a particular situation or
occasion. In other words, those tasks required according to the particularity of the
country in terms of development. Tasks are the work or actions to be done regularly
by the governmental organisation. Effectiveness is referred to the achievement of the
intended results; efficiency is reached when the organisation works or operates
quickly in a coordinated way; and sustainability is attained when the effects of the
actions undertaken are able to continue over a period of time.
Batley and Larbi, offer a complementary definition: “capacity is the factor that
explains human performance within a given organisational framework and
institutional environment” (2004: 18). Thus capacity comprises three interplaying
levels: the micro level - individuals, the intermediate level – organisations, and the
macro level – institutions (Brinkerhoff, 2008; Grindle 1997: 9).
Those three levels take into account the “supply” side of capacity, which is
concerned with the government or organisation itself, and the “demand” side of
capacity which is referred to the broad political, social and economic context or
institutional underpinnings in which the government performs or implement
programmes or policies (Grindle, 1997: 6-7).
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2.2. Dimensions of capacity
The framework provided by Hilderbrand and Grindle (1997), identifies five
interconnected dimensions for capacity analysis: the action environment, the
institutional context of the public sector, the task network, the organisation itself and
human resources. This framework is useful for analysing the capacity issues
because of its systematic approach which takes into account factors located at
different levels. Consequently this study takes these five dimensions of capacity as
an explanatory model (see Appendix 1).
2.2.1. The action environment
The action environment stands for the contextual factor existing in the country.
Generally it considers the background of economic, social and political factors which
influence the functioning of public sector organisations. As a result, the
implementation of projects, programmes or policies is directly affected by the outer
conditions, such as the economic performance of the country, political stability or the
level of human development (Hilderbrand and Grindle, 1997: 35).
Evidence of the effect of the action environment on the performance of government
organisations is supported by research carried out by Hilderbrand and Grindle in six
developing countries (Bolivia, the Central African Republic, Ghana, Morocco, Sri
Lanka, and Tanzania).
With regard to economic conditions, in these countries factors such as fiscal crisis,
falling real income levels, government’s inability to pay for supplies, equipment, and
vehicles, affected seriously the overall performance. For instance, it was thought that
the Ghanaian economy, in the 1960s had “stagnated”, in the 1970s had “declined”
and in the late 1970s and early 1980s was “reaching crisis proportions” (Larbi, 1998:
172-173). As a result, in the early 1990s there was poor performance in the annual
Gross Domestic Product - GDP growth (3.3% and 3.8% in 1990 and 1994,
respectively). The inflation rate was in double digits (10% in 1992, reaching 60% in
1995). And Ghana was also dependent on aid: from 1998 to 1992, 10% of the GDP
was contributed by international aid (Larbi, 1998: 187).
On the other hand, there were numerous political aspects which had impact on the
performance, such as instable, illegitimate and ineffective political institutions in the
Central African Republic. Instability and volatility are the words that summarise the
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process of sudden change in the government that had taken place in Ghana. For
example from 1957 to 1997, there were four military coups, two palace coups and
only five elections for President (Larbi, 1998: 173). Consequently there had been a
pendulum effect shifting from a centrally planned economy to a market oriented
economy and vice versa.
In relation to human resource development, the research have found that in some
countries there was a “poorly funded and ineffective investment in human
development” and “high levels of conflict were extremely detrimental to capacity, as
evidenced by the case of Sri Lanka, in which long-existing capacity was undermined”
(Hilderbrand and Grindle, 1997: 40).
To sum up, the authors point out that “low growth, political instability, and low human
resource development were found in those countries with the weakest overall
performance and the best performers had much more positive profiles along all
these dimensions” (1997: 41). Policies oriented to work on the action environment
are likely to have results in the long run because modifying economic, political, and
social structures is a daunting task for governments. Bringing about change at this
level might require long lasting reforms, beyond a single government.
2.2.2. Institutional context of the public sector
This dimension involves the set of rules of the game which shapes public sector
behaviour. It may include the legal framework for employment in the public sector,
salaries, rewards, qualifications, promotion patterns and so on. Furthermore, the
institutional context considers the financial resources, the governmental mandate
and existing national policies (Hilderbrand and Grindle, 1997: 37).
This dimension encompasses what Douglass North calls institutions: “the rules of the
game in a society” (1990: 3). Having a suitable institutional context implies reforms
such the “development of legal systems, policy regimes, mechanisms of
accountability, regulatory frameworks, and monitoring systems” which are the
framework for the government actions (Grindle, 1997: 19). These conditions may
enable or constrain the achievement of the tasks performed by the government.
…the impact of rules, regulations and procedures on supporting or constraining
performance is two-edged. On the one hand effective rules and procedures for
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getting things done and getting them done right are essential for day to day
functioning and for being able to confront longer-term development challenges … On
the other hand, these rules and procedures can lead to inflexibility and unduly
complicated requirements that actually stand in the way of accomplishing important
tasks (Hilderbrand and Grindle, 1997: 43).
For instance Bolivia had a deficient regulatory system and legal framework which
influenced negatively in the public sector operation. On the contrary, Morocco had
abundant rules and regulations which slowed down the public administration and
therefore affected the effectiveness and efficiency of service delivery.
The prescription provided by the authors are two pronged: regarding the basics, they
suggest having salaries enough to attract competent public servants, and having
comprehensive structures and process (job descriptions, hiring procedures, reporting
relationships, supply lines, and information system) in order to enhance predictability
in the procedures and reduce the scope for discretion which may allow rent-seeking
behaviour. Complementary to these basics, the improvement of the organisational
autonomy is suggested; this may include meritocratic mechanisms, capacity for
hiring and firing, transparency, accountability, and so on (Hilderbrand and Grindle,
1997: 45).
2.2.3. Task network
This comprises the array of organisations which are involved directly or indirectly in
the execution of a given task. Hence, performance may be affected in a positive or
negative way for the level of communication and interaction with other organisations,
namely other public sector agencies, non-governmental organisations, and the
private sector. Again, Hilderbrand and Grindle have found that “Weaknesses in these
networks that constrained performance came from two sources: the absence of
organisations to fill needed roles for any given task, or inadequate performance of
those roles; and the lack of effective interactions among organisations in the
network” (1997: 46). They recognise three kinds of organisations within the network:
primary organisations which play the central role in completing the task; secondary
organisations are critical to the task carried out by the primary organisations; and
supporting organisations supply complementary services in order to sustain the
tasks (1997: 37).
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Larbi provides an example of the importance of the task network for successful
contracting-out processes in Ghana. He points out that the most important constraint
was not in the domain of the public sector organisations. The constraints were
mainly in the market, i.e. the private sector: “the lack of private firms willing and able
to take on contracted-out services is a major limitation on the ability to ensure that
there is competition among contractors, and that competition leads to efficiency”
(1998: 314-315). The private sector was not developed enough; therefore it was
difficult to find room to manoeuvre for a competitive tendering.
Effective interaction and strong coordination are key factors for good performance in
the whole task network. Interaction may comprise the exchange of information,
linkages for collaborative work. Coordination is achieved when different
organisations perform the task effectively as a whole generating synergy. Special
attention is placed to the coordination between bodies in charge of the policy-making
process and those concerned with policy-implementation. Interventions aiming to
build capacity in the task network should be directed at the weak spots, targeting the
weakest organisations in the task network avoiding the negative effect on the
performance of the whole task network (Hilderbrand and Grindle, 1997: 47).
2.2.4. Organisation
The organisation itself is regarded as the core dimension when it comes to analysing
capacity. “The structure, processes, resources, and management styles of
organisations affect how they establish goals, structure work, define authority
relations, and provide incentives structure. These factors promote or constrain
performance because they affect organisational output and shape the behaviour of
those who work within them” (Hilderbrand and Grindle, 1997: 37). In this context,
concepts such as organisational culture, ethos, leadership style, mission, objectives,
equipment, monetary and non-monetary rewards influence global organisational
performance.
For analysing constraints within this dimension it is important to consider the different
aspects within the label of organisational culture. One of them is the “commitment to
a mission and results-oriented performance [which is] fundamental to establishing
these positive interactions and enabling some organisations to be productive despite
constraints at other levels indicated in the framework” (1997: 48). Another is “the
structure of work, authority relationships, communications, and behavioural norms”
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(49): concepts such as equity, participation, and flexibility are highlighted in the day-
to-day organisational management. To sum up a “mission-focused mystique”,
mission-driven activities” and a management style are important elements for an
enhanced and functional organisational culture.
For illustrating a case of capacity constraint, Larbi, points out that in Ghana when the
reforms for introducing elements of New Public Management, specifically contracting
out had been implemented there were a range of limitations: i) lack of coordination
between the central level and the agencies which deliver the service, or point of
implementation, ii) difficulties for monitoring and supervising the service contracted
out, which can lead to poor service delivery, and iii) organisational resistance for
contracting out ancillary services that were seen as core functions, and therefore
there were doubts about the capacity of the private sector for providing such services
Almost all of them are related to the organisational culture, structure and practices
(1998: 282).
2.2.5. Human resources
This dimension is perhaps the most important, because it constitutes the basis which
supports the organisational performance. Therefore it is determined by the level of
education of employees, their technical skills, their motivation and their trajectory
influence on the organisational level and on the capacity for delivering services. The
workforce is the foundation for every organisation; it is the lifeblood of the public
sector.
This dimension may represent a constraint if there are limitations in the capacity of
individuals for carrying out the everyday activities due to educational and skill
inadequacies in the personnel. As the dimensions interplay and influence each other,
the limitations in human resources may be caused by the institutional context of the
public sector and their policies related to employment. Further, “…poorly performing
officials and organisations may only be symptoms of dysfunctions rooted more
deeply in political, social and economic contexts” (Grindle, 1997: 11).
In the case studies, Hilderbrand and Grindle conclude that employee performance is
related to competitive recruitment procedures. “Without exception, the organisations
that were best able to recruit appropriate talent were those that had public
announcements and competitions for applicants; rigorous examinations or interviews,
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or both; and some kind of review board to ensure objectivity” (1997: 53).
Furthermore, the authors argue that the main problem related to human resources is
a “problem of utilisation”, in other word “what jobs individuals are assigned and what
kinds of incentives shape their behaviour in those jobs (1997: 54).
Finally, street-level bureaucrats’ as named by Lipsky (1980) ultimately have
influence on the organisational capacity and might re-shape a policy in the stage of
the implementation. Parsons also talks about these actors: “professionals have a key
role in ensuring the performance of a policy...Teachers, for example, may develop
ways of teaching or implementing “government policy” which actually result in
outcomes which are quite different to those intended or desired by policy-makers”
(1995: 469).
2.3. Policy implementation and capacity constraints
If capacity is considered as fundamental for implementing public policies in
developing and developed countries alike, constraints are understood as the external
or internal factors which control what an organisation does by keeping it within
particular limits. Therefore, capacity constraints may be one of the factors which
explain the policy-implementation failure or poor performance of social programmes.
Ultimately capacity constraints are overcome through holistic capacity-building
processes targeting key dimensions. Hilderbrand and Grindle, in order to
demonstrate that capacity-building activities should not be narrowly designed, argue
that “organisations and trained individuals do not perform in a vacuum; their ability to
carry out assigned responsibilities is deeply affected by the broader contexts within
which they operate... In some countries performance problems diagnosed at the
organisational or individual level may be so deeply embedded in economic, social,
and political deficiencies that efforts to improve performance most focus primarily on
these conditions.” (1997: 32-33). Notwithstanding that the importance of the
environment is acknowledged as sine qua non for capacity-building, the reality
shows that the efforts are restricted to the streamlining of the organisation itself or to
the enhancement of professional skills of the human resources.
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Chapter Three: Principal Features of Juntos
This chapter examines the programme Juntos, highlighting its principal features. This
conditional cash transfer (CCT) programme was introduced in August 2005, during
the government of President Alejandro Toledo. Juntos provides a monthly benefit of
S/.100 soles (about US$ 30) to poor families with children under 14 years old, who
have to go to health centres for preventive check-ups, improve their nutrition levels,
attend school and obtain birth certificates and identity documents. These are the
conditionalities or commitments that are agreed by the family in return for the
monthly cash transfers. The programme started in the 110 poorest rural districts in
the regions of Ayacucho, Apurimac, Huánuco and Huancavelica and was expanded
to cover 638 districts in fourteen regions by 2008.
3.1. Juntos’ Objectives
The objectives of Juntos are twofold: in the short run, to reduce the level of poverty
and extreme poverty (through cash transfers), and in the long run, to foster human
development, particularly for future generations in order to break the
intergenerational transfer of poverty through economic incentives to promote and
support access to education, health, nutrition and identity1 (Juntos, 2009).
Juntos' foundations are based on three main policy documents. The first one at the
international level is the Millennium Declaration and the Millennium Development
Goals which consider poverty reduction, access to health and education among their
eight objectives. At country level the National Accord, which contains twenty eight
policy objectives, states as priorities actions regarding poverty reduction, promotion
of equal opportunities, universal access to education, universal access to health
1 CCT programmes share the particularity of having dual objectives, similarly to Juntos (de Janvry and Sadoulet, 2006; Fiszbein, et al., 2009; Son, 2008). See Appendix 2 for basic information on selected CCT programmes in Latin America.
19
services, food security and nutrition. Finally the National Plan for Overcoming
Poverty and the Charter of Social Policy (2001-2006) consider a three pronged
strategy: i) development of human capabilities, ii) the promotion of economic
opportunities and skills for the poor, and iii) the establishment and strengthening of
social safety nets.
3.2. The rationale
3.2.1. Poverty
The rationale behind the creation of the programme is to overcome long lasting
poverty and extreme poverty conditions. Peru is a country of 28 million inhabitants,
with almost half of its population living below the poverty line (two dollars per day),
even though the figures for the last three years seem to be dropping, and around
15% of the population live under conditions of extreme poverty (one dollar per day).
Graph 1. Peru: evolution of poverty and extreme poverty, 1985-2008
42
18.5
27
58
54
45 44
5154
48.6 48.7
44.5
39.336.2
12.613.716.117.417.115
14.5
18.51919
0
10
20
30
40
50
60
70
1985 1991 1994 1995 1996 1997 2000 2004 2005 2006 2007 2008
Years
%
PovertyExtreme poverty
Source: INEI 2009. Data from National Survey: ENNIV 1991, 1994, 1997, 2000. ENAHO
1985, 1995, 1996, 2004 and 2008.
These national averages, however, do not show the extreme cases in rural areas:
69.3% of poverty and 37.1% of extreme poverty in 2006 (Instituto Nacional de
Estadistica - INEI, 2009). Further, in the districts of the targeted regions, extreme
20
poverty may affect to 71% of the population, as happens in Huancavelica. For more
details see Appendix 3.
It is important to mention that the figures shown above correspond to the headcount
measure which is an indicator of the number of people falling below the poverty line,
but it is not sensitive to the severity of the condition. Thus, “poverty gap is the
additional amount of … income that must be generated by a country to bring all the
poor above the poverty line… It is measured as a percentage of a … country’s total
current percentage of income that must be created and received by the poor… to
bring each family’s income above the poverty line” (Cyper and Dietz, 2009: 7-8).
According to figures of the World Bank, the poverty gap at national poverty line in
2004 was 18%, which is below the indicator for Bolivia in 2002 (31.2%), but above
Mexico in the same year (6.3%), (World Bank, 2009).
3.2.2. Human Development
The Human Development Index (HDI) is a composite indicator which measures three
dimensions of human development: living a long and healthy life (measured by life
expectancy), being educated (measured by adult literacy and gross enrolment in
education) and having a decent standard of living (measured by income) (UNDP,
2009). In the case of Peru, the HDI for 2007 is 0.806, which places the country within
the category of High Human Development. As shown in the table below, the position
in the ranking is the 78th among 182 countries (Idem, 2009).
Table 1. Peru: Human Development Index, 2007
Source: Human Development Report 2009 (UNDP, 2009).
21
In 2005, Peru was considered to be a country with low human development, with a
HDI of 0.597. While these figures indicate that has been experiencing significant
improvements in quality of life in recent years, it still has regions and provinces which
are lagging behind or are far from the national averages. Instances of the uneven
development across the country can be seen in the following regions: Huancavelica
with the lowest HDI (0.492) and Apurimac with 0.520; and the capital city area Lima
and Callao with the highest indicator (0.703). Going beyond the regional averages, it
is possible to find districts with even lower indicators: i.e. Quillo with 0.410, a district
located in the province of Yungay, Region of Ancash (PNUD, 2006). See
Appendixes 3 and 4.
3.2.3. Inequality
Another enduring problem related to poverty is inequality which is measured by the
Gini coefficient. This indicator attempts to capture the degree of income inequality or
the overall income distribution (Cyper and Dietz, 2009: 42). In 2006, this value was
49.6 (World Bank, 2009). This is below the average of Latin America which has one
of the highest levels of inequality.2 This indicator reveals the wide gap within the
society. For instance, according to data of the United Nations Development
Programme - UNDP, in Peru in 2005, 20% of the richest populations earned 51.2%
of the total national income. Merely 4.4% of the national income was earned by 20%
poorest of the population (UNDP, 2005). This is so because, in general the richest
populations are involved in trade, manufacture, service and other economic activities
located in the main cities or the country’s capital. Whereas 20% poorest are isolated
in the hinterlands, involved in agriculture of subsistence, or they are in the urban
informal sector. These are indicators of a dualistic3 and unequal society which is
acting as a barrier for a sustainable and homogeneous development.
2 Colombia had 58.5 and Chile had 52 in 2006. However Japan had 24.9 in 1993, Pakistan 30.6 in 2002, and Korea 31.6 in 1998, to mention a few. 3 Since the independence from Spain, in 1821, Peru has remained as a “dualistic” society -in words of Sir Arthur W. Lewis- with a “traditional low productivity rural and predominantly agriculture sector (producing what they consume)” specially located in the highlands and the Amazon, and “an incipient modern capitalist sector, where production [is] more technologically driven and worker productivity [is] higher”, generally in the main cities, which is due to the centralised pattern of growth (Cyper and Dietz, 2009: 153).
22
3.2.4. Market Failure
Under these conditions, and in the context of neo-liberal economic and social
policies, CCT programmes, also attempt to deal with the causes of market failures
such as externalities and equity issues. Externalities are important because “the
consumption decision of a single agent affects the welfare of others. By forcing
individuals to consume more of a good more than they would like, conditional cash
transfer schemes serve to reconcile societal preferences with individual choices…
Children are unable to make their own human capital investment decisions and rely
on their parents instead. Since the returns to education or health are typically felt in
the long run while the benefits of, say, child labour are immediate…” (Das et al.
2004: 2-3). In this case the government intervenes on the grounds that individual
consumers, namely children and parents, may fail to take externalities into account
when making consumption decisions. The second market failure is the equity issues
which is referred to the existing poverty conditions, social exclusion and problems of
income distribution. Under this condition economic growth and social welfare may fail
to reconcile since sustained economic growth in the country has not been translated
into welfare for the poorest social groups by means of ‘trickle down’.
Therefore, the government intervention is by subsidy to poor families for purchasing
goods and services, provision and finance of public and merit goods such as health,
education, and nutrition. When consumed, merit goods create positive externalities;
and when equity issues are addressed, these may lead to maximised economic
growth and social welfare (Muller, 2003).
3.3. Coverage
The coverage figures of households have increased almost tenfold from the pilot
phase in 2005 to July 2009. In the next table, the same pattern can be seen for the
number of districts and regions.
Table 2. Coverage of the Programme, 2005-2009 2005 (Pilot phase) 2006 (Dec) 2007 (Dec) 2008 (Dec) 2009 (July)
Regions 4 9 14 14 14
Districts 110 321 638 638 638
Households 32,000 159,224 353,067 420,491 416,191
Source: Juntos, 2009. Available from: http://www.juntos.gob.pe/expansion-programa.php
(Accessed: 10 August, 2009)
23
By July 2009, the programme covered:
- 416,191 households in extreme poverty, out of 757,949 total rural
households4 (54.9%).
- 638 districts, out of 1810 districts across the country (35.2%).
- 14 regions out of 24 in the whole country (58.3%).
More information about the number of beneficiaries of other programmes in Latin
America can be found in Appendix 2.
3.4. The budget
Facilitated by the favourable economic environment, the total budget of the
programme has increased exponentially due to the improved fiscal performance. In
the past the increment of the budget of other social programmes was modest and
incremental, but in Juntos it seems to be overwhelming. In 2005 the Programme’s
resources were US$ 28 million, and by 2009 this amount had rocketed to US$ 235.1
million5.
Graph 2. Evolution of Juntos’ Budget
235.1
206.5
170.7
97.8
36.3
0
50
100
150
200
250
2005 2006 2007 2008 2009
Years
US $
m
Source: (Juntos, 2009) Economic Transparency. Available from:
http://www.juntos.gob.pe/transparencia_informe_economico.php [Accessed 14 July 2009]
4 Information taken from: http://www.juntos.gob.pe/expansion-programa.php (Coverage of the Programme). 5 The exchange rate is as follows: 2005 US$1 = S/.3.30; 2006 US$1 = S/. 3.27; 2007 US$1=S/.3.12; 2008 US$1 = S/.2.94; and 2009 US$1 = S/. 2.90.
24
The total budget is spent according to the following categories:
- Cash transfer or subsidy: this is for the direct transfer to the beneficiaries in
order to achieve one of the core objectives. In the first three years it had a
tendency to increase (see Graph 3). Extra information found in the minutes
shows that the 2008 budget was fairly similar; and in 2009 this category
accounts for 88% of the total budget (Juntos Programme, Board of Directors,
2009: 4).
- Transfer to other sectors or public bodies: Ministry of Health, Education, and
Women and Social Development. This is for fostering the supply of public
services. These sector’s expenditures are directly linked to the achievement
of the objectives of Juntos. In 2008 the category transfer to other sectors was
eliminated; since then this budget has been directly transferred to every
sector (Farfan, 2009).
- Recurrent expenditure or administrative cost: This is for funding the
functioning of the programme itself. It includes the amount of money paid to
the employees of the organisations itself, and the expenditure for the services
provided by the National Bank and the INEI. From 2005 to 2007 this category
accounted for 18% of the total budget; however, the budget devoted to
funding the payroll was only 11%, which distinguishes Juntos from other
programmes across Latin America (Juntos, 2009).
25
Graph 3. Budget distribution according to expenditure categories (%)
Source: Minutes of the Board of Directors 2005 - 2008. Available from:
http://www.juntos.gob.pe/actasConsejo.php [Accessed 12 September 2009].
Economic Transparency. Available from:
http://www.juntos.gob.pe/transparencia_informe_economico.php [Accessed 14 July 2009].
3.5. Targeting mechanisms
The targeting process is carried out in three stages, which is similar to
Oportunidades in Mexico: i) geographic targeting, ii) evaluation of households based
on a statistical simulation model (proxy means test), and iii) community validation.
First stage: the geographic targeting. The total number of districts (1828) in the
country was sorted using a composite poverty index (extreme poverty and poverty
gap). So, the output is a number of districts from the poor regions. The program
excludes the sparsely populated regions or heterogeneous in terms of poverty, so as
to avoid dispersion of efforts and save administrative costs. Further, the other
variables taken into account were child malnutrition, unmet basic needs, and degree
of affectation by the political violence6 (civil war).
6 These variables came from the Final Report prepared by Truth and Reconciliation Commission.
%
26
Second stage: Assessment of households. The Programme selects the beneficiaries
by using a statistical simulation model (proxy-means test). Eligibility is determined on
the ground of the data collected which includes demographic variables (presence of
children under 14 years and pregnant mothers), education, housing characteristics,
assets, livestock and agricultural equipment. The output is a score for every
household, which is compared to the cut-off point established by the programme.
Third stage: Community validation. A village meeting is organised to validate the list
of beneficiaries. At this stage, households which meet the following conditions, may
be excluded: i) households whose members are public sector employees,
pensioners, recipients of alimony, business owners, lenders and relatives of local
authorities, and ii) owners of livestock, large vehicles or other assets.
3.6. The beneficiary and the amount of the transfers
The Programme’s direct beneficiaries are: children under 14 years old and the
mother of those children living in extreme poverty. The indirect beneficiaries are the
other members of the household.
The strategy adopted by Juntos was to transfer the female head of the beneficiary
household, under the assumption that they can use the resources to improve the
welfare of the whole family and especially the children. It is assumed that the male
head of the household may mismanage the resources (Hoddinott and Bassett, 2008).
This “positive gender bias” is an important feature shared by the CCT programmes
(Son, 2008). Consequently the payee’s names are included in the data base, and
they will receive a debit card for withdrawing the money every month from the
nearest branch of the National Bank. In the rural areas where there is no National
Bank branch, the payment is by private agencies which transport the money.
The benefit given by the programme is S/. 100 per month. This is equivalent to
US$ 30. The assumption behind the benefit of US$ 30 is that this amount is enough
for overcoming the status of extreme poverty, defined by income of one dollar a day.
In the case of Juntos the amount of the transfer is the same regardless of household
27
size or number of children. Therefore Juntos differs from other similar programmes in
Mexico, Brazil and Colombia, whose benefits vary depending on the number of
children in the family (Banco Mundial; 2007: 37). Only Chile Solidario, considers
benefits that gradually decrease as the time goes by.
The Programme has considered the “graduation” or exit of the beneficiary after four
years. Limited public resources is one of the reasons, and the other one is the fact
that throughout the four years the direct beneficiaries receive the cash transfer plus a
package of services (health, education) which are aimed to contribute to tackle the
causes of extreme poverty (lack of income) and low human development (access to
health and education services). Precisely in 2009 there should be 32,000
households ready for the “graduation” or exit.
3.7. The conditionalities and services delivered by the government
Juntos has a complex and ambitious set of conditions for the eligibility of
beneficiaries: i) children under 14 years must be enrolled in primary school and keep
a record attendance rate of 85%, and to visit health centres for regular check-ups; ii)
mothers have to attend antenatal and postnatal clinics; iii) adults should have
national identity and ensure that their children have birth certificates. Recipients are
required to sign a voluntary agreement which contains the conditionalities. However
there is a concern about the sustainability of the effects and changes in the
behaviour of the beneficiaries, for instance, going to the school or to the health
centres for their wellbeing without being paid or compensated with US$ 30 for doing
so. The following table contains the link between the conditionalities and the
outcomes of the Programme for every sector:
28
Table 3. Conditionalities and outcomes Sector Conditionalities Outcomes
Education For children between 6 and 14 years
who have not completed primary
school: Attendance of 85% on average
in educational activities that take place
in the school.
• To increase the attendance
rate.
• To decrease the dropout rate
• To increase the coverage of
primary education
• To decrease the cases of child
labour.
Health Participation in a nutritional
programme (PACFO) of all those
beneficiaries who have children
between 6 months and 3 years
(receiving slurry and participation in
training).
• To reduce child malnutrition,
infant mortality, maternal
mortality and anaemia.
• And to increase institutional
delivery.
Identity Participation in the programme “Mi
Nombre” (My Name) of all those
families who have children without
birth certificates and / or more than 18
years without a national identification
cards.
• Identity for parent and birth
certificates for children.
Source: (Juntos, 2009)
3.8. Organisational arrangements for implementation
These arrangements seek to involve key sector sectors in the decision-making
process, increase transparency and avoid political interference. The Presidency of
the Council of Ministers - PCM is responsible for monitoring the programme. The
action plan is monitored and evaluated by the Board of Directors headed by a
President and comprising the Ministers of Education, Health, Women and Social
Development, and Economy and Finance, representatives of trade unions and civil
society. Juntos has the status of an executive agency, has its own budget and is
responsible for the cash transfer to the final beneficiaries. The Chief Executive
manages the day-to-day operations. The supply of services is the mandate of other
organisations which work in partnership with Juntos. For ensuring social monitoring
29
and transparency, an ad-hoc supervisory body has been adopted, comprising
representatives of the Church, the private sector, regional and local governments,
and the Roundtable for the Fight against Poverty. Details about the coordination and
linkages with other stakeholders in the task network are provided in the following
sections.
3.8.1. The Primary Organisations
The programme itself and the social ministries (Education, Health, Women and
Social Development) are among the primary organisations which play the central
role in completing the tasks. Juntos transfers an important part of their budgetary
resources to them in order to improve and expand the supply of services and reach
the selected families in the targeted areas. This is in fact an innovative element
compared to similar experiences across Latin America because the rationale behind
this strategy is that if a programme aims to improve human capital among the poor,
this will be achieved only if there is enough supply of health and education services,
and not merely by a cash transfer (Francke and Mendoza, 2006: 399).
3.8.2. The Secondary Organisations
Additionally, Juntos coordinates with secondary organisations, which are critical to
the activities carried out by the primary organisations. Those agencies have the
following mandates:
- The Ministry of Economy and Finance (MEF), is in charge of the budget
disbursement for Juntos and other sectors, and plays a decisive role in the Board
of Directors.
- The National Bank (Banco de la Nación), is the entity in charge of the opening of
bank accounts and carrying out the payments to the final beneficiaries in a
monthly basis. This Bank has the most extensive networks of agencies or
branches.
- The National Food Assistance Programme (Programa Nacional de Asistencia
Alimentaria – PRONAA), provides training and guidance to the mothers for
preparing nutritive food for children between six months and three years old.
- The National Campaign for the Right to a Name and Identity ("My Name") is an
initiative of the Ministry of Women and Social Development in coordination with
the RENIEC to regularise the legal status of minors and adults who are not
registered.
30
- The National Agency for Identification and Civil Status (Registro Nacional de
Identificacion y Estado Civil - RENIEC), supports the identification and
registration of beneficiaries, provides identification cards to those who are
undocumented.
- The National Institute of Statistics and Informatics (INEI), participates in the cycle
of collecting data from households and analysing it in order to select potential
beneficiaries.
- The Programme of Food Supplements for Groups at Highest Risk (Programa de
Suplemento Alimentario para Grupos de Alto Riesgo - PACFO), aims to prevent
malnutrition in children between six months and three years old.
- The Comprehensive Health Insurance (Seguro Integral de Salud – SIS), is a
Programme of the Ministry of Health which aims to provide health coverage to
lower income sectors, and is in charge of immunizations, vitamin supplements,
health checks, prenatal and postnatal controls.
- The National Programme of Glass of Milk, aimed at improving food and
nutritional levels of vulnerable groups such as children, pregnant and nursing
mothers.
- The Fund for Cooperation and Social Development (Fondo de Cooperacion y
Desarrollo Social - FONCODES), aims to develop social and productive projects
to improve the living conditions of the poorest populations.
3.8.3. The Supporting Organisations
The following are among the supporting organisations which supply complementary
services in order to sustain the tasks:
- Regional Governments. In the targeted areas these are supposed to coordinate
the effort of Juntos, since it has de-concentrated branches in the regions where
the Regional Government has as its mandate the coordination of the social
programmes and policies.
- Local Governments. One of the roles of local governments is to coordinate the
actions within their territory. But generally speaking these just let the programme
be implemented.
- Governors. As representatives of the President of the Republic at the local level,
these support the programme especially at the outset. During the implementation
these oversee the programme for assuring its integrity.
31
Chapter Four: Implementation of Juntos and Capacity Issues
This chapter will analyse the implementation of Juntos from August 2005 up to July
2009, using empirical evidence for each dimension of capacity presented in chapter
two.
4.1. The action environment
In the last few years, the broad environment, i.e. the economic, political and social
conditions of the country, has been favourable. Juntos has been created in the
context of an unprecedented economic growth, democratic consolidation and relative
social stability. A logical assumption regarding the conditional cash transfer
programmes is that those programmes are created during periods of economic crisis,
namely recession and hyperinflation, where important sectors of the population
suffer from a number of hardships such as unemployment, loss of savings and
devaluation of assets, preventing them from meeting their needs, including the most
basic ones (Francke and Espinoza, 2006). However, this was not the case for
creating Juntos.
4.1.1. The economic context
The Peruvian economy is experiencing the longest expansion phase in its history.
Domestic demand, led by private consumption and private investment, is the most
important source of growth. Another factor that is speeding up economic growth is
the increasing international demand for minerals which has contributed to a balanced
budget, but which is relatively dependent on commodities traded internationally.
However, the risk of a growth contraction is a possibility due to the international
market conditions.
32
According to official figures, the economic growth in the last decade has been
sustainable in real terms7, as shown in the following table.
Table 4. GDP growth, real annual variations (%)
1997 2002 2005 2006 2007 2008(*)
6.86 5.02 6.83 7.74 8.86 6.2
Source: Inter American Development Bank (2009).
(*) Data from the Ministry of Economy and Finance.
This positive action environment allowed the government to have fiscal capacity to
increase the budget of Juntos from US $ 36.3 in 2005 to US$ 235.1 in 2009, as
shown in Graph 2 (evolution of Juntos’ Budget).
Moreover, in the context of a developing country, social programmes like Juntos are
often financed by international donors or by official loans. But in the case of Peru,
international funding represents only a small proportion. For instance, in 2009 it
represents 8.9% of the total budget. The main donors are multilateral agencies such
as the United Nations Development Programme, the Inter American Development
Bank, and the World Bank. The first one also provides technical assistance
regarding targeting, monitoring, evaluation, and training to the personnel.
4.1.2. The political context
In the political arena, there was a process of democratic consolidation after the
period 1992-2000, which started with a constitutional crisis the 5th of April 1992. The
presidential coup d’état led by Alberto Fujimori closed the National Congress,
suspended the Constitution of 1979, and enacted another Constitution in 1993,
among other actions. His government remained as a dictatorship until September
2000 when he resigned in the third period of his presidency amidst the most
notorious political scandal of the last years. From 2001 onwards, there have been
political stability, free elections, open competition, and attempts to reform the State.
Such efforts have been translated into a decentralisation process, citizen
participation, and open budget initiatives, aimed at making the government more
responsive to citizen demands. This broad context allowed the programme to have
7 Complementary, the inflation rate was almost controlled. It fluctuated from 1.1% in 2006, 2.5% in 2007 and 2.0% in 2008 (MEF, 2009).
33
openness and transparency in the financial management and power sharing in the
governance structure of the organisation.
4.1.3. The social context
In the social aspect, the context of poverty and extreme poverty have been the
driving forces for the establishment of a cash transfer programme intended to
contribute to social inclusion and poverty reduction. However there have been
recurrent social conflicts, especially in the regions, away from the capital city. In
December 2006 the Ombudsman reported thirteen ongoing conflicts nationwide; in
December 2007, this figure rose to twenty-six and to 134 in December 2008.
(Defensoria del Pueblo [Ombudsman], 2009). Most of these conflicts involved
opposition to new mining project concessions and conflicts at local level between
communities and municipalities. After the revision of the minutes of the Board of
Directors, no evidence was found that the social conflicts affected the performance
of Juntos, however there were minor problems, such as delays, in the scheduled
activities at local level.
To sum up the issues around the action environment, the contextual conditions did
not constrain the capacity of this new organisation in charge of the most important
policies of the last two governments. On the contrary, it allowed Juntos to have
sufficient room to manoeuvre. The economic situation permitted it to have the start
up budget which increased in the following years, as shown above. In the social
aspect, notwithstanding the conflicts, there were no serious threats to democracy
and social stability, such as the interruption of the government due to coups d'état.
Most importantly, the administration of President Alan Garcia, from July 2006
onwards, has continued and enhanced Juntos as a flagship programme for
overcoming poverty and attaining the Millennium Development Goals.
4.2. Institutional context of the public sector
Juntos as a public sector agency is governed by rules and regulations; as a result its
behaviour is shaped by the existing legal and institutional framework. Particular
relevance has the budget cycle and the procurement and acquisition systems.
34
4.2.1. The budget cycle in the public sector
The budget cycle for every State agency involves many decisions, procedures,
bargaining and negotiation. The rules of the game about the budgetary process
prescribe that the cycle is as follows:
Table 5. Phases of the budget process
The previous fiscal year The fiscal year The next
fiscal year
Programming Formulation Approval Execution Audit Evaluation
-Expenditure
forecast.
-Outlining of the
agency
priorities and
objectives.
-Preparation
of the budget
itself
considering
the agency’s
priorities
objectives.
-It considers
the budget
categories,
classification,
goals and the
respective
funding
sources.
-The
Congress
enacts the
Law of
Public
Sector
Budget.
-Juntos’
budget is
included
within the
Presidency
of the
Council of
Ministers -
PCM.
-Throughout
the fiscal
year the
agency
carries out
the
activities.
-It may
include a
period of
adjustment
until the 31
March.
-Financial
statement
or performance
audits.
-If there are
findings,
they are
reported to
the
Congress
or the
Judiciary.
-In order to
assess
progress with
regard to
established
goals.
-This is the
input for the
next budget
process.
The first
semester.
The second
semester.
December. From the 1st
of January
until the 31st
of
December.
Throughout
the fiscal
year, or
afterwards.
When the
execution has
finished.
Source: General Law of National Budget System
The Presidency of the Council of Ministers - PCM goes through this process, but
Juntos, as an agency embedded within this public body, does not follow this cycle.
Instead, Juntos has to follow the procedures and red tape inside the PCM.
The process for getting the resources is bottom-up in the first part: In theory, the
sectors have to submit a proposal of activities for boosting the availability of health
35
and education services for the targeted population; then the Board of Directors has
to approve the blueprint of the activities and budget for the next fiscal year, and
finally the PCM consolidates this information for sending it to the Ministry of
Economy and Finance - MEF. These steps correspond to the stage of programming
and formulation, which have to be carried out the previous year. After that, the
Congress enacts the whole public sector budget.
The next steps are top-down because the MEF transfers the resources directly to the
executing unit which is Juntos, and then this agency transfers these resources to
every sector (Health, Education, Women and Social Development8) for funding the
supply of public services which are sine qua non for achieving the programme’s
objectives. In the execution stage every sector has to follow the process of public
procurement for purchasing the good and contracting the services.
However, in practice, the budget cycle does not follow the prescription. To have an
idea, the next table attempts to capture the dimension of the delay in the budget
transference to the sectors:
Table 6. The process of budget transference to sectors, 2005-2007
Events 2005 2006 2007
Discussion and approval of the Institutional Operating Plan9 / Budget
31 August10 16 March11 23 April12
Transference from the MEF to Juntos
28 December 24 July June
Budget availability for the sectors
27 January 2006 27 October According to the minutes it was due by October or November
Budget execution February 2006 onwards
November 2006 onwards
Unavailable information
Source: Juntos Programme, Board of Directors (2007: 31).
8 In 2007, Juntos transferred resources to the National Agency for Identification and Civil Status - RENIEC, which provides identity cards. 9 This document is important because it states the activities for the fiscal year. The budget is the financial dimension of that plan. “The budget is the instrument which allows organizations to achieve their objectives and targets contained in their Institutional Operating Plan - IOP”. Article 8 of the General Law of National Budget System (Congress of the Republic, 2004: 5). 10 Minutes of the meeting 31 August 2005. 11 Minutes of the meeting 16 March 2006. 12 Minutes of the meeting 23 April 2007.
36
Within Juntos, the budget decision-making process suffers delays because key
documents such as the Institutional Operating Plan and the Institutional Budget,
which contain the activities, goals and the resources needed by the Programme, are
discussed by the Board of Directors around March or April of the same fiscal year,
when these documents should be discussed the year before. When these
documents are sent to the PCM, the MEF is allowed to disburse the resources, and
Juntos has to transfer these resources to the sectors.
The Chief Executive of the Programme acknowledged that in practice it appeared
that the 2005 budget had been used in 2006, and the resources of 2006 had been
used in 2007 (Juntos Programme, Board of Directors (2007: 31). No clear
explanation has been found for this delay in the budget cycle. The minutes of the
meetings reveal only that there were discussions about the effects generated by this
delay. However, it is clear that Juntos as a new Programme was facing what can be
named as inefficiency of the transition. It results in a not satisfactory, not organised,
or not skilled performance which lasts the first stage or period when an organisation
starts working or undertakes changes.
The consequence was the low level of budget execution, or low absorption capacity
in these sectors which affects the expected outputs such as teachers, nurses and
general practitioners adequately trained, text books distributed, schools and clinics
built, drugs and vaccines ready to be used, etc.13 As shown in the next table
education is the sector with poor performance (36.7% of budget execution), followed
by women and social development (59.6%). The health sector stands out as a good
performer sector with almost all the budget executed (96.7%).
13 The Health sector, according to the information had 96.7% of budget execution; however that was not the case in 2005, 2006 and 2007, when absorption capacity was a serious problem for every sector in the task network.
37
Table 7. Budget transference to sectors and level of execution Sectors Budget
transference US$ m Total
transference to sectors
Total Executed
Level of execution
(%)
Remaining balance to
be executed
(*)
2005 2006 2007
Education 3.9 9.0 6.3 19.2 7.0 36.7 12.2
Health 4.0 9.0 19.2 32.2 31.1 96.7 1.1
Women and Social Development
2.0 9.0 6.1 17.1 10.2 59.6 6.9
RENIEC 0.0 0.0 3.2 3.2 2.5 78.6 0.7
Total 9.9 27.0 34.8 71.7 50.8 67.9 20.9
Source: Farfan, H. (personal communication), (10 September 2009).
(*) Until May 2009.
However it is worthwhile considering the opinion of the MEF’s representative with
regard to this problem: He remarked that not being able to spend with the need
speed, having available resources to improve the provision of public services, is a
serious concern. But the timing of the transference is something to take into account
for understanding this problem. For example, in 2005 the transfer took place a few
days before the end of the fiscal year. So, try to blame the ministries as inefficient
would be unfair because there are other factors beyond the control of the sectors.
The situation has improved somewhat, now (2007) the transference is taking around
the end of the first semester allowing the sectors to have from 5 to 7 months to
execute the budget, however it would be convenient to have 12 months for a proper
budget expenditure (Juntos Programme, Board of Directors, 2007: 10).
The next graph shows the overall result of budget execution per year, including the
budget for the subsidies to families and the transfers to the sectors. A report
elaborated by the National Directorate of Public Budget - DNPP, a specialised body
of the Ministry of Economy and Finance, concluded that from 2005 to 2008, the level
of execution was approximately 80% of the budget (DNPP, 2009).
38
Graph 4. Overall level of budget execution of Juntos, including sectoral
expenditure
Source: Juntos and MEF – Economic transparency. Adapted from DNPP (2009).
The same report also concluded that in 2006, the problem of low level of budget
execution (54.2%) was mainly explained by the low level of expenditure in the
budget earmarked for the transfer of US$ 30 a month to households – i.e. the cash
transfer. From out of US$ 42 million only US$ 24.5 million was disbursed (DNPP,
2009: 1). The cause of this problem is analysed in section 3.3 because it is related to
the failure of the activities carried out by one organisation within the task network,
which is the INEI. However, from 2007 onwards, no evidence was found regarding
the low level of expenditure in the budget for subsidies (cash transfer).
In an attempt to resolve this problem, the Board of Directors was able to manage to
introduce two institutional arrangements:
• from 2008, the MEF is transferring the budget directly to the sectors avoiding
unnecessary steps in the whole process; and
• the sectors are allowed to spend the remaining balance in a timeframe beyond
the fiscal year, which prevents the sectors returning resources to the treasury.
For that reason, so far the budget of 2006 and 2007 is being spent in 2009.
39
4.2.2. The procurement and acquisition systems
In addition to the delays in the budget cycle, there is evidence that the State
procurement system slows down the execution of the expenditure. According to the
Assessment Report of the Country Procurement System, developed by the World
Bank and the IADB in late 2005, "the general perception, supported by empirical
evidence is that the persistent weakness of the procurement system is the product,
among other things, of complex rules for budget planning and execution, and
deficient logistics which cause delay in the service delivery" (cited in Abusada, 2008:
12-13). The empirical evidence provided by the study is that the time for
procurement of medical supplies from the approval process until the delivery takes
450 days.
For instance, when the budget was transferred to the Ministry of Education, this
agency was not able to absorb such amount of resources. The representative of the
Ministry of Education informed the Board of Directors of Juntos, that in 2006 the level
of budget execution was low because two major activities such as the purchase of
educational materials (textbooks, basically) and teachers training received 78% of
the total budget. Such activities showed the lowest level of performance because of
the amount of the budget (over US$ 150,000) which necessarily has to involve public
tenders which take on average five to six months for the award and the execution
itself (Juntos Programme, Board of Directors, 2006: 2). A study carried out by
Ramon et al. suggests that, in the sample of seven districts visited 14 , “poor
infrastructure and lack of teachers and teaching materials is still evident”, and the
transference to the Ministry of Education, has not been translated in an observable
improvement in the quality of education (2009: 39).
Abusada, also identifies the excessive formalism, rules and tight control exercised by
the Comptroller General of the Republic which in recent years has gone beyond
controlling almost all the procedures and questioning the actions of many agencies:
“this has resulted in a high level of inaction and lack of initiative on the staff of the
government, fearing that their decisions may be sanctioned by the Comptroller”
(2008: 12). To illustrate this constraint, in the same meeting of the Board of Directors, 14 Umari and Molino, in the province of Pachitea, region of Huánuco; Yauli and Acoria, province of Huancavelica, region of Huancavelica; San Pedro de Cachora and Huanipaca, province of Abancay, and Curpahuasi, province of Grau, region of Apurímac.
40
it has been reported that "the level of budget implementation for 2006 was 0.24% (as
of that date) because the budget has been enabled for execution in the third week of
October 2006, and given the time the public procurement takes for awarding the
public contracts (minimum five months), the decision was not to take risk by
scheduling the execution of new activities, since in two months remaining for
finishing the fiscal year it would have been impossible to successfully execute the
budget (Juntos Programme, Board of Directors, 2006: 2). To attempt to carry out
these activities, bypassing the rules and regulations may imply administrative or
criminal sanctions for the individual who made the decision.
To conclude, the result is that the budget is not being spent efficiently, the problems
remain and therefore the demand is not being attended properly, raising concerns
about the achievement of the Programme’s objectives. These findings about the
education sector are representative and reveal what happens in other sectors such
as health, women and social development. These also show the reality about the
effectiveness and efficiency of public expenditure which ultimately is the State’s
ability to achieve the policy objectives and the way public resources are used.
4.3. Task network
Traditionally, poverty has been tackled using a one-dimensional approach, or with a
multidimensional but overlapping strategies. For that reason in the past decade there
have been a plethora of social programmes in Peru aiming to reduce poverty, but in
most of the cases they were unsuccessful. In this context Juntos is an innovative
approach for integrating different interventions and achieve both poverty reduction
and human development: “the CCT programmes sometimes are catalysts of such a
move, and sometimes are forerunners in a larger explicit strategy to improve
integration. That move toward coordination or integration has two facets—the
increased coordination of actors and the integration of benefits” (Fiszbein et al. 2009:
97). Therefore, for achieving the goals, the programme emphasises horizontal inter-
linkages with other partners, especially at the national level, and vertical coordination
with either de-concentrated or decentralised agencies at regional and local levels.
However, the main constraint in the task network is that implementing the
programme is not the solely responsibility of Juntos. In fact there are other agencies
involved directly or indirectly, for instance, the different ministries, the sub-national
governments, and so on. Hogwood and Gunn, remind us that a perfect
41
implementation “requires that there is a single implementing agency which need not
to depend on other agencies for success, or if other agencies must be involved, that
the dependency relationships are minimal in number and importance” (1984: 202). In
this case, the nature of the intervention allows Juntos to have an extended
dependency relationship. This being one of the strengths of the programme,
ultimately this relationship, however, becomes a constraint for the programme itself
due to the weaknesses of these organisations in the task network. To date, however,
the social ministries are struggling to use the additional resources effectively to meet
gaps in supply in areas where Juntos operates. The coordination and integration is a
positive feature of the programme, but the lack of absorptive capacity is generating
serious difficulties which affect the overall impact of the programme (Banco Mundial,
2007: 38-39).
In December 2005, when the absorption capacity was identified, the Board of
Directors, decided to set up a task force or short term committee in order to improve
the supply of services. Its members, with multiple skills and expertise, were brought
together to build linkages among the social sectors (Juntos Programme, Board of
Directors, 2005). However, from the minutes it may be concluded that this task force
could not accomplish its mandate. At the regional level similar committees have
been created, but they lacked effectiveness in the first years, and to date they do not
operate any more.
Also, another attempt to solve this problem was to delegate to local governments the
execution of activities in the field of education, health and nutrition. Transfer of
budget from Juntos to local governments and transfer of management
responsibilities were considered in the proposal. The institutional arrangements for
this endeavour included agreements between the parties containing deliverables,
targets, and procedures. However, this proposal has not gone beyond the blueprint
stage because, according to the minutes of the meeting, it lacked the conditions of
feasibility such as local government capacity for service delivery, standardised
administrative and operational procedures, and grassroots organisations able to
oversee the implementation process (Juntos Programme, Board of Directors, 2006a).
Good examples of the problems in coordination and networking are the cases of the
social sectors and the INEI, which are explained in the following paragraphs.
42
4.3.1. The Ministry of Education
Education is one of the most important components for attaining the long term
objectives such as human capacity development. Juntos’ intermediate goal is to
significantly increase school attendance. Thus, the conditionality for beneficiaries is
that children must attend at least 85% of the classes. Due to this conditionality,
during the implementation of Juntos, there has been an increase in the demand for
education, but at the same time there have been shortages in the supply of this
service.
In the rural areas, this sector tends to face problems such as the lack of teachers,
infrastructure, school furniture, training materials, texts, and so on. For being
responsive with the increased demand for education, the initial hypothesis of the
policy-makers was to transfer economic resources to the sector so as to boost
investment in key areas in order to provide the service assuring certain level of
quality. In the light of the findings, it seems that the education sector did not foresee
the increased demand and the increased resources which reveal problems of
coordination between the sector and Juntos.
4.3.2. The Ministry of Health
This sector is facing the same problem. Human resources seem to be still insufficient.
The lack of qualified personnel to meet the growing demand is an indicator of the
deficient coordinated planning in the context of the programme implementation.
However this sector has tried to attend the new demand generated with personnel
under the scheme of “medical rural service – Serum” who generally do not have
necessary experience and skills. This topic when discussed in the Board of Directors,
raised questions about the quality of the services provided, and the labour conditions
of those employees who have their workplace in the rural districts, far away from the
cities. In this point, it is important to mention that the health sector earmarked
resources for the personnel and other activities, which at the end were very useful
for absorbing the resources transferred from Juntos. This decision, among others,
has been influential for having a good performance among other organisations in the
task network (Juntos Programme, Board of Directors, 2007a).
43
4.3.3. The Ministry of Women and Social Development
This Ministry faces the challenge of coordinating with other organisations. For
instance the campaign “My Name”, which provides identification documents to
children and adults, has to be implemented with tight coordination with RENIEC,
local governments and the health sector (clinics) in every district. From 2005 to 2006,
this sector provides the resources, the identity card is provided by the RENIEC, and
the records are provided by the local government and the clinics.
However, this action generated overlapping functions with the RENIEC itself, for that
reason from 2007 onwards, as can be seen in Table 6, the resources for this action
are transferred directly to the RENIEC (Juntos Programme, Board of Directors,
2007a). In this regard, the Programme was able to take the correct decisions when
problems of execution such as bottlenecks and overlapping functions were detected.
4.3.4. The National Institute of Statistics and Informatics - INEI
In 2006 there was a low level of expenditure in the category of subsidies for the
beneficiaries. Although this problem seems to concern to Juntos itself (since the
responsibility of transferring the cash is an activity carried out by Juntos), the real
causes are outside the programme. The problem of low expenditure was originated
by failure in the secondary organisations, in this case the INEI. According to the
minutes of the meeting held on the 7th of December 2005, the INEI failed to provide
timely and accurately the data base containing the potential beneficiaries who fulfil
the conditions for being included in the programme. This technical error had its effect
in 2006’s budget expenditure. It was not feasible to reach the goal in terms of
number of beneficiaries due to poor work done by the INEI. Only 20,000
beneficiaries were identified when the target was 60,000. When the census was
conducted, there were problems in identifying the beneficiaries, there were errors in
the quality of information, and there were incomplete surveys (Juntos Programme,
Board of Directors, 2005a: 4).
Finally, Juntos had the essential guidelines for actions which should be executed.
But Juntos, as a new and dynamic programme, is being shaped and reshaped
constantly. For that reason recently, in 2008, a logical framework (see Appendix 5)
and an Operational Manual have been issued which is important for overcoming
loopholes and overlapping actions among the organisations which intervene in the
stage of implementation. Juntos struggled since 2005 for having a Logical
44
Framework and a Base Line because of the complexity of the problems being
addressed, the two pronged objectives (poverty reduction and human development),
the lack of agreement about the main activities and indicators.
4.4. Organisation
From the outset, Juntos has been designed taking into account the experience of
identical programmes such as Mexico (Oportunidades), Brazil (Bolsa familia),
Colombia (Familias en Accion), Chile (Puente-Chile Solidario) and Costa Rica
(Superemonos). External organisations such as the UNDP and the World Bank have
played a supportive role in the revision and analysis of experiences of conditional
cash transfer programmes. Consequently Juntos sought to avoid errors and
shortcomings in similar experiences, and to highlight and promote the strengths
already identified in previous cases (Francke and Mendoza, 2006: 397).
Oportunidades of Mexico stands out particularly because of the existence of
partnership with Juntos, which allows permanent cooperation and exchange of
experiences. So far, senior managers and specialists have visited Mexico to see the
experience in the field and gather information relevant to the implementation of
Juntos. With the Brazilian programme there is also an agreement which allows
interorganisational learning and cooperation.
4.4.1. The governance structure
Juntos is an agency with a structure which aims to have capacity for cross-sectoral
coordination and cooperation, vertical coherence or unity of command, and to some
extent centralised and decentralised functions. Therefore the governance structure
of the programme has three main components: i) the Board of Directors, ii) the
Executive, and iii) the Transparency and Oversight Committee. The next chart
illustrates the governance structure highlighting the most important bodies.
45
Chart 1. Governance structure
Source: (Juntos, 2009)
4.4.2. The Board of Directors
This is the governing body of the Agency. Its functions are to establish policies,
strategies and objectives, to review the overall performance of the organisation and
to oversee the financial issues during its monthly basis meetings. One noteworthy
element is that there is a power sharing element between the State and the civil
society.15 The Board of Directors includes key stakeholders from civil society who
have the same power as the State representatives, as can be seen in the next table.
15 In 2001, the transitional government of Valentin Paniagua established the National Roundtable for the Fight against Poverty, which is a multi-stakeholder forum with actors from the State, the civil society and the private sector, in order to promote and facilitate dialogue and participation in the formulation and implementation of poverty reduction policies. This model of participation and decision-making is being applied by Juntos in the Board of Directors. More information at: www.mesadeconcertacion.org.pe.
Board of Directors President
The Transparency and Oversight Committee
Chief Executive
Deputy Chief Executive
Local Committees of Transparency
Manager Legal Advisory
Manager Planning and Budgeting
Administration
Technology and Information
Manager Coordination and sectoral
services
Manager Operations, affiliations & liquidations
Manager Monitoring and
Evaluation
Manager Regional
Coordination
Manager Promotion and communication
Regional Coordinators
Regional
Coordinators
46
This is something that differentiates Juntos from other social programmes where the
decision-making process remains as a monopoly of the State, with the member of
civil society reduced to passive witnesses (Francke and Mendoza, 2006: 398; Juntos:
2009).
Table 8. Members of the Board of Directors
State
President:
1. Representative of the President of the Republic
Members:
2. Minister of Education
3. Minister of Health
4. Minister of Women and Social Development
5. Minister of Economy and Finance
Civil Society
Members
1. Representative of the National Confederation of Private Business Institutions [Confederacion Nacional de Institutiones Empresariales Privadas – CONFIEP]
2. Representative of the National Conference on Social Development [Conferencia Nacional sobre Desarrollo Social – CONADES]
3. Representative of the General Confederation of Workers of Peru [Confederación General de Trabajadores del Perú – CGTP]
4. Representative of the Churches: The Catholic Church represented by the Non-governmental Organisation Caritas
Source: (Juntos, 2009)
It is worthwhile mentioning that the current structure, and more specifically, the
composition of the Board of Directors, has been labelled by the Chief Executive and
the Monitoring and Evaluation Manager, in August 2008, as “complex” because of its
multi-stakeholder composition: “the Board of Directors composed of a President,
representatives of State and civil society lead to a difficult coordination process”
(Juntos Programme, Board of Directors, 2008: 11). However this may be seen as a
natural consequence of an organisation which interacts and coordinates with other
stakeholders. The acknowledgment of this complexity, made in the Institutional
Management Report (January-July 2008), is also a call for a clear definition of
47
mandates, roles and functions. However, the Board of Directors did not agree with
this statement and asked for its removal from the official document (Idem, 2008).
However, the composition of the Board of Directors represented and asset for the
programme. According to the meetings held from 2005, until 2009, the civil society
representatives were the ones who participated actively in the meetings, especially
in the outset when the State representatives only sent deputy representatives or they
missed meetings. Proposals and participation from both sides were interesting, but
those from the civil society were particularly interesting, as explained below:
• Webpage of the programme displaying key information for transparency and
accountability (23 October, 2005).
• Modification of the base-line’s terms of reference, for making its indicators more
representative of the programme’s objectives (11 November, 2005).
• Concerns about problems in the supply of services (7 December, 2005).
• Evaluation of the candidates for the position of Chief Executive (28 February,
2007; and 18 June 2008).
• Participation in the task force for improving the supply of public services (20 June
2007)
• Streamlining the logical framework (throughout 2007, 2008 and 2009)
Representatives with experience in social programmes management (CARITAS and
CONADES) had outstanding participation and technical proposals regarding the
supply of services, the base-line, and the logical framework. CONFIEP’s delegates
was important for particular issues related to their background, for instance for
allowing the programme to have partnership with private companies and shape the
proposal of income generation for beneficiaries. CGTP’s representative was mostly
interested in issues around transparency and political independence of the
programme (information from the minutes, available from: www.juntos.gob.pe).
4.4.3.The Executive
This is headed by the Chief Executive, and depends on the Presidency of the
Council of Ministers – PCM. This is the body that deals with the day-to-day activities
for accomplishing the mandate. Currently, Juntos has a central agency in Lima and
has deconcentrated offices in 14 regions.
48
As mentioned before, Juntos is a fairly centralised organisation, since the key
decisions are taken at the centre; however these decisions at the top level take into
consideration the flow of information from below. The danger of having a
decentralised system would be the potential inconsistency of the decisions made at
lower level, having differentiated strategy for tackling the problem, and scope for
discretion which may increase the possibility of corruption or rent-seeking. However
the deconcentrated structure seems to be advantageous since the activities are
performed coherently under the direction of the centre.
4.4.4.The Transparency and Oversight Committee
Juntos has a supervisory body composed by member from civil society and the State.
The Catholic and Evangelical Churches play a major role. This Committee is devoted
to monitoring the proper functioning of the programme, so as to avoid a recurrent
problem of social programmes, such as corruption, mismanagement, political
interference, problems of targeting, etc. This body has 14 regional coordinators and
local committees in almost every targeted district. From that level the problems, if
any, could be raised at the regional and national level. At the national level, as it can
be seen in the table below, four members out of six are from the civil society, with
the exception of representatives of the local and regional governments.
Table 9. Members of the Transparency and Oversight National Committee
Civil Society
President:
1. Representative of the President: former Archbishop
Members:
2. Two representatives of the churches: 2 priests representing the National Interfaith Committee [Comite Interconfesional del Peru] and the National Evangelical Council [Concilio Nacional Evangelico]
3. Representative of the private sector
4. Representative of the Roundtable for the Fight against Poverty [Mesa de Concertacion para la Lucha Contra la Pobreza]
State
Members:
1. Representative of the Regional Governments
2. Representative of the Local Governments
Source: (Juntos, 2009)
49
Furthermore, it is important to mention that openness, transparency and
accountability are relevant features of Juntos. The webpage www.juntos.gob.pe
contains accessible information such as the minutes of the Board of Directors
meetings, the financial statements, the wages of the staff and personnel, the
indicators of coverage, list of beneficiaries, among others.
In terms of organisation and governance structure, Juntos stands out among other
programmes. The power sharing in the Board of Directors allows the programme to
have voices from the civil society which contributed to the shape the programme and
make it more transparent and accountable. The Transparency and Oversight
Committee facilitated the programme to have report from the grassroots level about
problems of implementation such as leakages, political interference at local level,
shortage of public services provision, overlapping functions; and this Committee
participated in the selection of the personnel in the deconcentrated agencies.
4.5.Human resources
This capacity dimension is very important when implementation is seen as a process
highly affected by actions carried out by the employees at different levels.
4.5.1. The contract scheme
All the programme employees are within the scheme of Contratacion Administrativa
de Servicios – CAS, which differs greatly from the situation of permanent workers.
Under the CAS scheme, personnel are hired to perform specialised services, with a
pre-defined outcome. This system is suitable for hiring consultants, but not for
permanent personnel. The disadvantages of the mushrooming of employees under
this category are that they do not enjoy the social benefits and the stability, which are
basic conditions for having highly motivated human resources. Under the CAS
scheme employees have to renew their contracts quarterly or every six months.
These issues have been touched on in the meetings of the Board of Directors when
the reform of the programme and the issues around human resources were
discussed, but no solution was found because this problem is related to the
institutional settings which govern the public sector (2009a: 3; 2009b: 4). According
the law on contracts in the public sector, Juntos cannot have permanent employees
since the State cannot increase its payroll due to fiscal discipline policies. As it will
50
be explained later, the other organisations of the task network do not confront this
problem.
4.5.2. Promoter’s lack of neutrality for monitoring compliance
Juntos is implemented by decisions taken at the top level (Board of Directors) or by
the different decision makers in the headquarters in Lima, the capital city. This
management in a centralised fashion does not pay enough attention to the quality of
the actions carried out at the lower level of the hierarchy, for instance in the poorest
and isolated districts targeted by Juntos.
The promoters are the employees who depend directly on the programme, they can
be hired and fired by the administrative authority, therefore they are accountable to
Juntos itself and their performance can be measured. They are in charge of one
district or specific areas of it. The promoter’s monthly salary is US$ 500 and their
contracts are renewed every three months, they do not have health insurance, only
one of accident. Only in exceptional cases-for example in case of having to travel to
distant places to receive additional benefits, tickets or other travel expenses in other
cases the programme gives them a motorcycle, otherwise, they must “fend” for
themselves (Ramon et al, 2009: 14).
Juntos’ objectives are achieved when the beneficiaries meet the conditionalities.
Also, this allows the beneficiary to receive the subsidy. The promoter is the person
who monitors the compliance. According to the programme’s rules, when the
recipient household fails to meet the conditionalities, the transfer of cash has to be
suspended for up to three months. A study carried out by Garret et al, identified that
“a promoter may sometimes overlook a gap in compliance to allow the household to
keep receiving the payment during the next 3-month period. Given what appears to
be a fairly personal relationship between community residents and the promoter, and
understanding how difficult it might be for a household to meet all the conditions in a
particular month, one can appreciate how a promoter might ‘excuse’ any misses in
compliance” (2009: 20). The promoter may do so in order to “make sure the
programme works well at community-level … Clearly the promoter has an incentive
to keep up the numbers of compliant households, in order to make the programme
and her own efforts look good” (Idem). The consequence of this practice is the
overestimation of the compliance with the conditionalities. This generates a false
sense of achievement of targets and it undermines the programme impact.
51
4.5.3.Front-line employees and their accountability
It is argued that front-line or street level workers (say the teachers, the nurses, the
general practitioners and the promoter who represents Juntos at these levels) play a
major role for policy implementation. Howlett and Ramesh remark that “studies
conducted in bottom-up fashion have shown that the success or failure of many
programmes often depends on the commitment and skills of the actors at the bottom
directly involved in implementing programs” (1995: 157).
Some employees, whose actions contribute to achieve Juntos’ objectives, do not
dependent on the programme itself. They are solely accountable to their respective
sectors who are members of Juntos’ task network. The ministries of Health,
Education, and Women and Social Development have a high proportion of workers
permanently appointed, who generally are not well trained and their performance is
not assessed; therefore productivity, efficiency and effectiveness are not concepts
embedded in their mindsets. The control and incentives for them are different to the
ones who are appointed for performing specific tasks and their level of productivity is
assessed. Abusada et al. in a study on efficiency of the public expenditure, argue
that most of the workers (82%) are permanent, corresponding to the State payroll.
The principal feature of this group is “the stability they enjoy, so it is difficult to
remove them even though there might be valid reasons. Therefore, workers have no
incentives or penalties tied to performance, as there is a flat wage policy and a
system of almost unbreakable stability” (2008: 12).
4.6. Capacity Constraints
As mentioned in section 2.1., capacity is “…the ability to perform appropriate tasks
effectively, efficiently, and sustainably” (Hilderbrand and Grindle 1997: 34). The
following table is built considering that effectiveness is referred to the achievement of
the intended results; efficiency is reached when the organisation works or operates
quickly in a coordinated way; and sustainability is attained when the effects of the
actions undertaken are able to continue over a period of time.
According to the table, the institutional context of the public sector, and the task
network have relative high capacity constraints, followed by human resources. The
other dimensions, as seen, do not affect negatively the programme’s performance.
52
Table 10. Ranking of Capacity Constraints Capacity Dimensions Constraints Total
Effectiveness Efficiency Sustainability
The action environment 0 1 1 0.6
• The economic context
• The political context
• The social context
Institutional context of the public
sector
3 3 2 2.7
• The budget cycle in the public
sector
• The procurement and
acquisition systems
Task network 3 3 2 2.7
• The Ministry of Education
• The Ministry of Health
• The Ministry of Women and
Social Development
• The INEI
Organisation 1 1 1 1
• The governance structure
• The Board of Directors
• The Executive
• The Transparency and
Oversight Committee
Human resources 2 3 2 2.3
• The contract scheme
• Promoter’s lack of neutrality for
monitoring compliance
• Front-line employees and their
accountability
Indicators:
High level of constraint: 3
Moderate level of constraint: 2
Low level of constraint: 1
Absence of constraint 0
53
Chapter Five: Conclusions
The implementation of Juntos, revealed the differentiated influence of each
dimension on the overall performance of the programme. In particular, the highest
capacity constraints were related to the institutional context of the public sector, and
the task network.
Evidence suggested that the action environment did not hinder capacity; conversely
the economic conditions allowed the government to have fiscal resources for funding
the programme and to have an increasing budget. The political context was a key
factor for the continuity of the programme by the recent administration and it offered
opportunity for its openness. And the social conditions did not represent a serious
limitation for Juntos.
Concerning the institutional context of the public sector, the evidence points at this
being the source of the main constraints. The low absorption capacity of the budget
had its roots in the rules and regulations for budgeting and the procurement system
in the public sector. The attainment of the objectives and fulfilling the mandate were
endangered for delays in the disbursement of the budget and for the long process for
purchasing goods and services. This constraint created the most serious problem
faced by Juntos: the shortage of supply of public services. Under this condition,
Juntos might be merely a cash transfer programme and not one which boosts human
development.
In the context of the public sector, generally reluctant to multi-stakeholder
implementation approaches, the task network represented a challenge because
Juntos required the intervention of other organisations for accomplishing its
objectives. These organisations included, among others, the ministries of Education,
Health, Women and Social Development and the Institute of Statistics and
Informatics. Juntos struggled to control of the activities carried out by these public
agencies. It appeared that the weak performance of the task network’s organisations
54
affected the overall functioning of the programme; therefore it was another source of
capacity constraint. Juntos seemed to be fairly effective transferring cash to the
beneficiaries, which was one of the objectives, but the other objective, advancement
in human development, required coordination activities with other public bodies
which was a daunting task.
On the topic of organisation, Juntos’ governance structure stood out due to its mixed
composition in the Board of Directors with representatives of the key sectors
involved in delivering services for achieving the programme’s objectives, and
because of the power-sharing feature with active and positive participation from the
civil society organisations and the private sector. Despite these advantages, the
organisation’s performance was restricted because of the action of other dimensions
such as the human resources, the task network, and the institutional context of the
public sector. However it was facilitated by the economic and political conditions,
namely the action environment.
With regard to human resources, the programme faced constraints in terms of
having short-term contract employees and staff that did not enjoy the same social
benefits as their peers in the public sector. Also, the lack of neutrality of the
promoters for monitoring the compliance of conditionalities generated a false sense
of achievement of targets. Furthermore, as natural consequence of the multi-
stakeholder intervention, Juntos did not have influence on employees who belong to
the organisations of the task network, and the majority of those employees benefited
from having permanent status without incentives or penalties tied to performance.
Finally, further research can be carried out in order to address the two major
capacity constraints. First, it has been indicated that the supply-side weaknesses
were due to the institutional context of the public sector. More specific research can
be done about the bottlenecks in the existing normative framework, and the
operational processes which are contributing to a less effective and inefficient state
intervention. Second, how to achieve smooth inter-organisational coordination and
collaborative work among the operating partners may be useful for shedding lights
into the task network dimension. Further, how to generate a sense of ownership of
Juntos’ objectives by the other implementing agencies may be an interesting area of
study.
55
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Appendixes
Appendix 1. Dimensions of capacity
Source: Hilderbrand and Grindle, 1997: 36
60
Appendix 2. Basic information on selected programmes
Country Peru Juntos
Mexico Oportunidades
Brazil Bolsa Familia
Jamaica Program of Advancement through Health and Education - PATH
Paraguay * Tekopora/ ProPais II
Colombia Familias en Accion
Year of the data (introduced)
2009 (2005) 2002 (1997) 2005 (2001) 2004 (2002) 2008 Tekopora (2005), ProPais II (2006)
2005 (2000)
Number of beneficiaries
2.3 Million (8.2% pop.) **
4.2 million (20% pop.)
8.7 million (22% pop.)
63,000 (8% population)
nd 340,000 (4.6 % pop)
Average unit transfer (US$ PPP 2003/month)
$30 total $62 education $21 health-nutrition
$64 total $27 education $27 health- nutrition
$ 18-36 $53 education $31 health-nutrition
Annual Budget (US$)
$ 235.1 million
$ 2.6 billion $ 3.0 billion $ 18.3 million $ 9.6 million $ 100 million
% of GDP 0.06 *** 0.32 0.36% 0.32 0.08% (2007)
0.12
Education benefits
• Education grant • School materials • Supply and quality strengthened
• Education grant • School materials • Supply and quality strengthened • Savings account for graduates
• Education and nutrition grant
• Education grant
• Education grant
• Education grant
Health and nutrition benefits
• Health check-ups • Basic healthcare • Nutrition and health education • Nutrition supplements • Improved supply
• Food grant • Basic healthcare • Nutrition and health education • Nutrition supplements • Improved supply
• Health grant • Health education
• Vaccination. • Health Check-ups. Health and • Nutrition grant
• Health and nutrition grant • Nutrition and health education
Other benefits Participation in the My Name programme by families with children who lack birth certificates and/or are older than 18 years and have no identification card.
nd nd nd nd nd
61
Country Peru Juntos
Mexico Oportunidades
Brazil Bolsa Familia
Jamaica Program of Advancement through Health and Education - PATH
Paraguay * Tekopora/ ProPais II
Colombia Familias en Accion
Grant periodicity
Monthly Bi-monthly Monthly Bi-monthly Bi-monthly Bi-monthly
Target group for education grants
Poor households with children between 6 and 14 years who have not completed primary school
Poor households with children 8-18 enrolled in primary and up to 20 years old in secondary school
Extreme poor and poor households with children 6-15 years old
Poor households with children 6-17
Extremely poor families with children aged 0–14 and pregnant women. Rural areas only
Poor households with children 7-17 enrolled in school (2nd to 11th grades)
Target groups for health and nutrition grants
• Poor households • Children between 6 months and 3 years old.
• Poor households • Nutrition supplements to pregnant and lactating women, children 4-24 months and malnourished children 2-5 years old
• Extreme poor households and poor households with children 0-15 years old, pregnant and lactating women
• Poor households with children 0-5, pregnant and lactating women, people over 65, persons with disabilities, destitute adults under 65.
• Poor households with children 0-6 not participating in other programs
Source: Adapted from de la Brière and Rawlings (2006).
nd: No data.
* Information taken from: http://go.worldbank.org/TVDSMZ23C0
** Juntos (2009) Performance indicators.
*** Banco Mundial (2007: 14) Data for 2006.
62
Appendix 3. Social indicators of targeted regions
Region Number of
targeted
districts
% of extreme
poverty in the
targeted
districts (2005)
HDI in the whole
region
(2005) (*)
Amazonas 12 49.9 0.553
Ancash 66 42.2 0.577
Apurimac 60 61.5 0.520
Ayacucho 69 51.6 0.528
Cajamarca 77 37.6 0.540
Cusco 44 19.0 0.537
Huancavelica 76 71.0 0.492
Huánuco 67 61.6 0.531
Junín 39 23.9 0.592
La Libertad 42 56.6 0.604
Loreto 11 37.8 0.566
Pasco 8 30.5 0.575
Piura 16 27.7 0.571
Puno 51 67.4 0.546
TOTAL 638 42.6 -
Source: Adapted from Juntos (nd)
(*) Taken from PNUD (2006)
63
Appendix 4. HDI in not-targeted regions
Regions HDI 2005
Lima y Callao 0.703
Tacna 0.668
Ica 0.648
Moquegua 0.643
Lambayeque 0.627
Tumbes 0.618
Madre de Dios 0.599
Ucayali 0.576
San Martín 0.573
Source: PNUD (2006)
64
Appendix 5. Matrix of the Logical Framework, 2008-2011
End Purpose Outputs Main Activities To contribute to the reduction of poverty and break the intergenerational transmission of extreme poverty
Building human capital in households in extreme poverty by providing incentives for access and use of health services, nutrition, education and for improving the consumption capacity.
To ensure the availability and access to a package of health services, nutrition and education according to the life cycle of the beneficiaries, in co-responsibility with the sectors of the national regional and local governments.
To coordinate the intervention with other social programmes, regional and local governments within the framework of the National Strategy “CRECER” (Growing). To measure the gaps in supply of health and education services. To monitor the service provision (health and education) and to ensure its quality and timeliness. To create the alert system in conjunction with the Intersectoral Commission for Social Affairs (CIAS) on the supply capacity of health and education services. To promote the realisation of counselling and training workshops on nutrition. To affiliate the entire target population to the Comprehensive Health Insurance (SIS). To promote the implementation of healthy housing according to the regional customs. To promote literacy among women beneficiaries through the Ministry of Education. To establish partnership with public and private organisations for financial and technical assistance for capacity development.
To provide cash transfers to households which meet their responsibilities.
Identify and incorporate households in extreme poverty. Make the institutional arrangements with RENIEC for the issuance of national ID’s for the target population. To transfer the conditional economic incentives to the beneficiary households, through saving accounts. To train women beneficiaries through their leaders in the fulfilment of their responsibilities. To strengthen a system of individual monitoring for assuring the compliance of conditionalities related to health, nutrition and education.
Source: Juntos Programme, Board of Directors. 2008a: 5) Minutes of the Meeting 18
November, 2008.
The Board of Directors has only approved the end, purpose, outputs and main activities of
the Logical Framework. In July 2009 there has been reduction in the list of main activities.