document of the world bank · pne national education program (programa nacional de educación) pme...

Document of The World Bank

Report No: ICR0000776

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-72490)

ON A

LOAN

IN THE AMOUNT OF US$300.0 MILLION

TO THE

UNITED MEXICAN STATES

FOR A

BASIC EDUCATION DEVELOPMENT PROJECT IN SUPPORT OF THE THIRD PHASE OF THE BASIC EDUCATION DEVELOPMENT PROGRAM

June 25, 2008

Human Development Sector Management Unit Colombia and Mexico Country Management Unit Latin America and the Caribbean Regional Office

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CURRENCY EQUIVALENTS (Exchange Rate Effective 06/20/2008)

Currency Unit = New Peso (MXN$)

US$ 1.00 = 10.29

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AGE School Management Support (Apoyo a la Gestión Escolar) APF Parents’ Association (Asociación de Padres de Familia) APL Adaptable Program Loan ATR Technical Rural Assistants (Asesores Técnicos Rurales) CEPS School Councils (Consejos Escolares de Participación Social) CTE Technical School Council (Consejo Técnico Escolar) COMPRANET Internet Procurement Mechanism (Sistema Electrónico de Contrataciones Gubernamentales) CONAFE National Board for the Development of Education

(Consejo Nacional de Fomento Educativo) COPLADE State Planning Council (Consejo de Planificación del Estado) CPS Country Partnership Strategy FBS Fixed-Budget Selection (of Consultants) FDI CONAFE’s Institutional Development Fund (Fondo de Desarrollo Institucional) FM Financial Management (Gestión Financiera) FMR Financial Monitoring Report (Informe de Monitoreo Financiero) FY Fiscal Year GOM Government of Mexico GRM Material Resources Unit at CONAFE

(Gerencia de Recursos Materiales) IADB Inter-American Development Bank ICB International Competitive Bidding ICR Implementation Completion and Results Report IPDP Indigenous Peoples Development Plan ISR Implementation Status Report LCS Least Cost Selection (for Consultants) LGE General Education Law (Ley General de Educación) NAFIN National Financing Agency (Nacional Financiera S.A.) NCB National Competitive Bidding NGOs Non-Governmental Organizations OECD Organization for Economic Co-operation and Development OM Operational Manual PAD Project Appraisal Document PARE Primary Education Project, Loan 3407-ME, 1991 (Programa para Abatir el Rezago Educativo) PAREB Second Primary Education Project, Loan 3722-ME, 1994 (Programa para Abatir el Rezago en Educación Básica) PAREIB-I Basic Education Development Project, APL I, Loan 4333-ME, 1998

(Programa para Abatir el Rezago en Educación Inicial y Básica) PAREIB-II Basic Education Development Project, APL II, Loan 7108-ME, 2002 (Programa para Abatir el Rezago en Educación Inicial y Básica) PAREIB-III Basic Education Development Project, APL III, Loan 7249-ME, 2004 (Programa para Abatir el Rezago en Educación Inicial y Básica) PIARE Integral Program of Education, IADB financed (Programa Integral para Reducir el Rezago Educativo) PDO Project Development Objectives PNE National Education Program (Programa Nacional de Educación) PME Education Modernization Program

(Programa para la Modernización Educativa, 1989-1994) Posprimaria CONAFE’s Rural Community-Based Lower Secondary Education Program PRODEI Initial Education Project, Loan 3518-ME, 1992 (Proyecto para el Desarrollo de la Educación Inicial) PROGRESA Education, Health, and Nutrition Program at SEDESOL (Programa de Educación, Salud, y Alimentación, now Oportunidades) PROSSE Program of Essential Social Services, Loan 3913-ME, 1995 (Programa de Servicios Sociales Esenciales) SA Special Account SEP Secretariat of Public Education (Secretaría de Educación Pública) SEPEs State Level Secretariats of Public Education (Secretarías Estatales de Educación Pública) SFP Secretariat for Administrative Development (Secretaría de la Función Pública) SHCP Secretariat of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) Telesecundaria Television-based Lower Secondary Education Program TOR Terms of Reference UCEs CONAFE’s State Basic Education Coordinating Units

(Unidades Coordinadoras Estatales de Educación Básica) UCEIs CONAFE’s States Initial Education Coordinating Units (Unidades Coordinadoras Estatales de Educación Inicial) UPC CONAFE’s Compensatory Programs Unit

(Unidad de Programas Compensatorios)

Vice President: Pamela Cox Country Director: Axel van Trotsenburg

Sector Manager: Eduardo Velez Project Team Leader: Ricardo Silveira

ICR Team Leader: Suzana N. de Campos Abbott

MEXICO Basic Education Development Phase III

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design............................................... 12. Key Factors Affecting Implementation and Outcomes .............................................. 73. Assessment of Outcomes .......................................................................................... 114. Assessment of Risk to Development Outcome......................................................... 215. Assessment of Bank and Borrower Performance ..................................................... 216. Lessons Learned ....................................................................................................... 237. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 25Annex 1. Project Costs and Financing.......................................................................... 26Annex 2. Outputs by Component ................................................................................. 28Annex 3. Economic and Financial Analysis................................................................. 31Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 33Annex 5. Beneficiary Survey Results ........................................................................... 35Annex 6. Stakeholder Workshop Report and Results................................................... 36Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 37Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 38Annex 9. List of Supporting Documents ...................................................................... 39

MAP

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A. Basic Information Country: Mexico Project Name:

MX Basic Education Dev Phase III

Project ID: P085851 L/C/TF Number(s): IBRD-72490 ICR Date: 06/26/2008 ICR Type: Core ICR

Lending Instrument: APL Borrower: UNITED MEXICAN STATES

Original Total Commitment:

USD 300.0M Disbursed Amount: USD 298.4M

Environmental Category: C Implementing Agencies: CONAFE Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 01/29/2004 Effectiveness: 12/15/2004 12/15/2004 Appraisal: 03/24/2004 Restructuring(s): Approval: 07/01/2004 Mid-term Review: 01/09/2006 01/09/2006 Closing: 12/31/2007 12/31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project No Quality at Entry None

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at any time (Yes/No): (QEA): Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 5 5 Pre-primary education 20 20 Primary education 50 50 Secondary education 20 20 Sub-national government administration 5 5

Theme Code (Primary/Secondary) Education for all Primary Primary Indigenous peoples Secondary Secondary Participation and civic engagement Secondary Secondary Rural services and infrastructure Secondary Secondary E. Bank Staff

Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Axel van Trotsenburg Isabel M. Guerrero Sector Manager: Eduardo Velez Bustillo Ana-Maria Arriagada Project Team Leader: Ricardo Rocha Silveira Harry Anthony Patrinos ICR Team Leader: Suzana Nagele de Campos Abbott ICR Primary Author: Suzana Nagele de Campos Abbott F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The APL supports the Government's compensatory education program, as outlined in the National Education Program (PNE) 2001-2006 and the Education Development Program 1995-2000. Specifically, the objectives of Phase III focus on fine-tuning the delivery mechanisms while extending the successful components of Phase II.

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The Project is the final phase of a the three-phase APL program. The Project aimed to fine tune the delivery mechanisms based on a more fully developed decentralization model. The objectives of Phase III were as follows: (a) to consolidate and expand quality improvements in initial and basic education (preschool, primary and lower secondary), covering, inter alia, infrastructure improvements, didactic materials provision, teacher training, school supervision, and implementation of school-based management strategies; (b) to strengthen management of the education system through support for the Government's ongoing strategy to consolidate the organization and management of basic education (preschool through lower secondary), and to integrate the operation of the compensatory education program; and (c) to continue strengthening states: institutional capacity to plan, program and evaluate the delivery of basic education services. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Parents of children in initial education reached Value quantitative or Qualitative)

373,253 496,800 373,208

Date achieved 06/30/2004 12/30/2007 12/31/2007 Comments (incl. % achievement)

Indicator 2 : Completion rates in indigenous primary education Value quantitative or Qualitative)

81.6% 83.9% 82.8%


Indicator 3 : Completion rates for non-indigenous primary schools Value quantitative or Qualitative)

85.6% 86.1% 90.1%


Indicator 4 : Completion rates for primary education

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Value quantitative or Qualitative)

85.3% 86.0% 88.8%


Indicator 5 : Completion rates for telesecundaria education Value quantitative or Qualitative)

80.6% 82.1% 81.4%


(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Construct and rehabilitate 17,805 educational facilities and technical and administrative offices

Value (quantitative or Qualitative)

17,805 18,708

Date achieved 12/30/2007 12/31/2007 Comments (incl. % achievement)

Indicator 2 : Execute 62,951 interventions for school management Value (quantitative or Qualitative)

59,978 62,951 62,858


Indicator 3 : Complete impact evaluation of CONAFE's compensatory program on the learning achievements of preschool and primary school students

Value (quantitative or Qualitative)

evaluation completed

Preliminary evaluation of ECD completed but found unsatisfactory.

Date achieved 12/30/2007 12/31/2007 Comments

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(incl. % achievement)

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 11/29/2004 Satisfactory Satisfactory 0.00 2 04/27/2005 Satisfactory Satisfactory 46.78 3 12/22/2005 Satisfactory Satisfactory 127.87 4 09/20/2006 Satisfactory Satisfactory 246.42 5 10/19/2006 Satisfactory Satisfactory 254.34 6 01/30/2007 Satisfactory Satisfactory 262.75 7 05/12/2007 Satisfactory Satisfactory 278.08 8 04/27/2008 Moderately Satisfactory Satisfactory 298.39

H. Restructuring (if any) Not Applicable

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal At the time the Third Phase of the Basic Education Development Project was appraised Mexico had made significant progress in expanding education access. The Project’s Project Appraisal Document (PAD) reported that at the time 90 percent of school aged children attended primary school with a completion rate of 86 percent. However, universal coverage was yet to be achieved, and the quality of education was well below international standards, especially applicable in Mexico’s poorer states and among indigenous peoples. The Government of Mexico (GOM) had begun to address the challenge of educational disadvantage by placing greater emphasis on compensatory programs that provided extra support to education for disadvantaged groups. The main issues facing the GOM’s compensatory education programs were: (a) low access to the initial and preschool education levels; (b) limited access to lower and upper secondary education; (c) low quality throughout the education system; (d) lack of critical input in schools located in poor, rural, indigenous communities and marginal urban areas; and (e) weak managerial and administrative capacity at the state level. These issues were being addressed under the GOM’s compensatory education program, as outlined in its National Education Program (PNE) which included the Education Development Program 1995-2000 – Programa de Desarrollo Educativo 1995-2000 and the National Education Program 2001-2006 – Programa Nacional de Educación 2001-2006. The PNE intended to raise the level and quality of schooling in Mexico, bringing the country’s education indicators substantially closer to those of other OECD countries. The compensatory education programs were being implemented by CONAFE (Consejo Nacional de Fomento Educativo), which targeted under-served communities. For the period 2001-2006, CONAFE focused on improving the quality of education for students in the poorest areas by ensuring minimum operational standards for all targeted schools, developing innovative programs to address the needs of students, involving schools and communities in the decision making process at the school level and developing the institutional capacity of states to design and implement national education policies and compensatory programs. The World Bank had been, since 1991, providing technical and financial support for the implementation of the GOM’s compensatory education strategy. Several Bank-financed projects in the sector had targeted underserved areas in the poorest states---Loan 3407-ME (PARE, 1991); Loan 3518-ME (PRODEI, 1992); and Loan 3722-ME (PAREB, 1994)—and had been instrumental in supporting the GOM’s compensatory strategy. The state-by-state targeting mechanism under those projects evolved into a better-integrated program of national scope and coverage, which the three-phase APL Basic Education Development Program was supporting. The first phase of the APL, supported by a US$115.0 million Bank loan (Loan 4333-ME) was approved on June 4, 1998, and closed

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on December 31, 2001. The second phase of the APL, supported by a US$300.0 million Bank loan (Loan 7108-ME) was approved on March 21, 2002, and closed on June 30, 2004. The US$300.0 million loan for the Basic Education Project, Phase III (the Project) approved on July 1, 2004 represented the natural continuation of Bank support to the implementation of the GOM’s compensatory education program. Bank involvement was justified not only because the Project was the final phase of the APL program, but also because it would continue the strong and productive association that had been established between the GOM and the Bank on this important program.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The first phase of the APL sought to improve quality in preschool, general secondary and technical secondary, telesecundaria, and initial education at schools serving the poorest 50 percent of rural students and the poorest 25 percent of students in urban marginal areas in 14 states. During implementation of APL I, coverage of lower secondary education had been extended to 244,998 poor rural students through telesecundaria and posprimaria modalities. The strategy evolved to emphasize the coverage of rural lower secondary education, particularly through distance education (telesecundaria). Program activities in other levels were carried out on a reduced scale. This realignment of priorities was a result of a sharp increase in demand for lower secondary education resulting from higher completion rates in primary school and the impact of education incentives provided by Oportunidades, the conditional cash transfer program formerly known as PROGRESA (Programa de Educación, Salud y Alimentación). The second phase of the APL was implemented in 31 states covering initial, preschool, primary and lower secondary education levels. It sought to consolidate and expand quality improvements in education in initial and basic education, strengthen management of the education system integrating the operation of the compensatory education program nationwide, and continue strengthening the states’ institutional capacity to plan, program and evaluate the delivery of basic education services. As the final phase of the three-phase APL program, the Project aimed to fine tune the delivery mechanisms based on a more fully developed decentralized model. The Project aimed to consolidate and expand quality improvements in initial and basic education (preschool, primary and telesecundaria), covering, inter alia, infrastructure improvements, provision of didactic materials, teacher training, school supervision, implementation of school-based management strategies, and continued strengthening of the institutional capacity of the states to plan, program and evaluate the delivery of basic education services. The Project’s Development Objective (PDO) was to support the Government’s compensatory education program, which aims to increase schooling opportunities for children aged 0-14 years in the poorest rural, most educationally disadvantaged communities, through the expansion of educational opportunities and improvements in the quality of education. The following key indicators were included in the PAD to measure progress towards this objective:

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Table 1: Key Indicators % Points Change Baseline PAREIB PAREIB PAREIB

Indicator I,II,III I,II,III III 1997-1998 1998-2007 1998-2007 2004-2007

Initial Education Coverage of 0-4 year old children 365,328 545,361 49.3

(% change) 33.1

(% change) Parents of young children trained 304,440 496,800 63.2

(% change) 33.1

(% change) Primary Education Failure Rate 10.2 6.8 3.4 0.5 Repetition Rate 9.5 6.1 3.4 1.0 Dropout Rate 3.4 1.9 1.5 0.2 Completion Rate 77.4 86.0 8.6 0.5 Indigenous Primary Education Failure Rate 14.0 9.3 4.7 1.1 Repetition Rate 12.6 8.3 4.3 1.0 Dropout Rate 7.3 2.8 4.5 0.3 Completion Rate 63.1 83.9 20.8 1.2 Non-Indigenous Primary Education

Failure Rate 9.4 5.9 3.5 1.0 Repetition Rate 8.8 5.7 3.1 0.8 Dropout Rate 3.8 1.9 1.9 0.2 Completion Rate 80.1 86.1 6.0 0.3 Telesecundaria Failure Rate 6.7 3.7 3.0 0.4 Repetition Rate 0.4 0.5 -0.1 0.1 Dropout Rate 8.2 4.9 3.3 0.3 Completion Rate 75.5 82.1 6.6 1.1 Source: World Bank, Project Appraisal Document, Basic Education Development Project in Support of the Third Phase of the Basic Education Development Program, June 10, 2004

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The Project’s PDOs were not revised.

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1.4 Main Beneficiaries (original and revised, briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The direct beneficiaries of the APL program included all children who were to be reached by inputs and through training of their teachers and principals under the program. More broadly, all children in preschool and basic education were to benefit indirectly from more efficient education services as the result of institutional strengthening and decentralization activities. The program targeted children in rural and marginalized urban areas with the highest incidence of poverty, including handicapped, migrant and indigenous children who were disproportionately represented among the disadvantaged groups. In broad terms, out of the potential beneficiaries of the compensatory programs, the program sought to reach 100 percent of all initial education and preschool indigenous children, the poorest 50 percent of rural preschool and lower secondary students, and the poorest 25 percent of children in urban marginal areas. Indirect beneficiaries of the Project also included parents and other adults involved in raising small children, teachers who were to receive training to improve their pedagogical skills, and economic incentives to compensate them for teaching in rural primary schools, and the State Secretariats of Public Education (SEPEs) that were to be strengthened to enable them to carry out their responsibilities more effectively.

1.5 Original Components (as approved)

The Project included three components, as follows:

Component 1: Initial Education (US$82.6 million total project cost with contingencies) provided out-of-school training for parents and other adults directly involved in raising small children, with the objective of contributing to the child’s comprehensive development and to a smooth transition to preschool. The training was to be targeted to families in indigenous or low-income rural communities with 0-4 year old children or expecting their first child. The objectives of the component were to be achieved through the following five subcomponents:

(a) Training in initial education for promoters, supervisors and coordinators to strengthen their knowledge of early childhood development and improve the quality and efficiency of service delivery;

(b) Community participation to mobilize community support for the program, directed at public and private social service professionals and community organizations that could complement the work of educational promoters (EPs);

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(c) Training for parents of 0-4 year old children to strengthen family understanding of early childhood development and to demonstrate how the family could best stimulate the process;

(d) Educational materials (development, design, printing, reproduction and distribution of educational and dissemination materials for the program) to be used in training sessions; and

(e) Monitoring and evaluation systems development and implementation. Component 2: Support for Basic Education (US$358.2 million total project cost with contingencies) aimed to help improve basic education indicators in isolated, rural communities, by providing for a package of interventions comprising material, pedagogic and school management actions in selected preschools, in primary and in lower-secondary telesecundaria schools. In addition, support was to be provided to rehabilitate and equip teachers’ centers (Centros de Maestros y Recursos, CMRs). The objectives of this component were to be achieved through six subcomponents, as follows: (a) Educational infrastructure and equipment to raise the physical conditions of the schools to a minimum operational level, on the basis of needs assessments prepared by the SEPEs. Construction was to be carried out by the community, represented by parents’ associations, school councils, or ad hoc community groups, and was to be supervised by the states; (b) Didactic materials to improve the learning conditions at targeted preschools, primary and telesecundaria schools by providing them with materials appropriate to the curriculum at each level of education; (c) Training and technical assistance to the technical school councils (Consejos Técnicos Escolares—CTEs) to strengthen pedagogic skills of primary teachers, particularly those working in multi-grade and indigenous schools; (d) Support and training for parent associations (Asociaciones de Padres de Familia—APFs) to consolidate and strengthen the APFs focusing on: (i) management of school funds transferred by CONAFE to the APFs; (ii) participatory skills to increase parents’ involvement in school activities; and (iii) information on the achievement of students and ways in which parents could help improve their learning achievements; (e) Performance incentives for primary school teachers to contribute to retaining teachers in rural primary schools located in isolated communities with difficult access, to increase teacher attendance rates, to reduce teacher turnover, to promote the use of after-school hours for tutoring students that fall behind and to encourage teachers to participate in school planning activities. The incentives consists of monthly stipends linked to the schools and supervised by the APFs, that represented 27 percent of the average primary teacher salary; and

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(f) Support for School Supervision to strengthen supervision at the primary school level. This was to be achieved through support provided to members of the school supervision team to enable them to visit schools more often, with the aim of transforming supervision into a vehicle for pedagogical support and not merely on administrative matters. Component 3: Institutional Strengthening (US$56.2 million total project cost with contingencies) aimed to continue strengthening the capacity of SEPEs to plan, program and evaluate basic education service delivery. This objective was to be achieved through four subcomponents, as follows: (a) Strengthening of the pedagogical capacity of the SEPEs to contribute to service quality improvements by helping develop the pedagogic capacity of the technical-pedagogic staff in each state. Workshops were to focus on multi-grade education, in-service teacher training, education evaluation, inter-cultural and bilingual education, effective use of education technology and education planning; (b) Strengthening of the administrative capacity of the SEPEs to continue strengthening the states’ capacity to administer and efficiently deliver basic education services. Technical assistance tailored to the needs of each state would focus on school supervision, administrative staff development, human resource management, management of physical resources, financial management, monitoring and evaluation systems, and coordination between regular and compensatory education programs; (c) Monitoring and evaluation of the Project to consolidate the systems for CONAFE’s compensatory programs; and (d) Administration of the Project to consolidate achievements made in the two previous phases of the program with respect to program operational norms and procedures that ensure efficient implementation.

1.6 Revised Components The Project’s description and its components were not revised during implementation.

1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) There were two cancellations of funds under the Bank’s loan, and a reallocation of funds among expenditure categories. US$1.5 million were cancelled under the loan, effective October 1, 2004, to reflect a 50 percent waiver of the front-end fee on the Bank’s loan. Subsequently, US$105,675.51 was cancelled effective August 9, 2005, to reflect the misprocurement of goods under the previous, second APL in support of the Basic Education Project. When the issue was resolved, the loan account in support of that project had been closed, and instead of requesting a refund on the amounts previously disbursed under that loan for the misprocured goods (which would have required special

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approval by the Government), the Bank agreed to compensate by cancelling the corresponding amounts from the loan for this project. Finally, on July 18, 2006, the Bank agreed to a reallocation of funds among the loan’s expenditure categories to reflect actual and remaining project expenditures. As a result of these two cancellations, and the reallocation of funds, the Bank loan in the end financed a larger amount for goods (US$23.3 million more), teacher incentives (US$1.0 million more) and incremental operating costs (US$0.4 million more), and a lesser amount for each of works, consulting services and training, support for school supervision, and packages of school materials.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) A formal Quality at Entry Assessment was not carried out for this Project. Project preparation, design and quality at entry are rated satisfactory for the following reasons: (i) Project Design - This third project in the APL series provided continuing support to fine-tune and consolidate an existing, successful program of expanding basic education coverage and quality with equity. The Project’s design was in line with the Government’s implementation capacity, as had been demonstrated in the two earlier phases of the APL. Risks were identified well in the PAD, along with mitigating measures. Perhaps in retrospect, and with the hindsight of current practice, the PAD could have highlighted fiduciary risks and proposed appropriate mitigation measures, as procurement and financial management issues demanded attention of the Bank’s Task Team during the initial years of implementation. The risk of delays in counterpart funding, which surfaced as an issue on occasion during implementation, could also have been highlighted. Although the Bank’s loan contained three non-standard effectiveness conditions, it became effective about five months after its approval, and implementation started expeditiously, giving continuation to the Program’s earlier phase. The Project’s objective, as agreed with the Bank and defined in the body of the PAD was very broad and did not address the objective of strengthening CONAFE’s institutional capacity which was supported under Components 3 (C) and 3 (D). The Project’s ISRs included slightly more elaborated objectives, which were presented in Annex 1 of the PAD, and appeared to be a carry-over from the Project’s second phase. A more appropriate formulation of the Project’s objectives, supported by all of the Project’s activities, would have been to: (a) consolidate and expand quality improvements in initial and basic education (preschool, primary and lower secondary), covering, inter alia, infrastructure improvements, didactic materials provision, teacher training, school supervision, and implementation of school-based management strategies; and (b) continue strengthening CONAFE’s and states’ institutional capacity to plan, program and evaluate the delivery of compensatory basic education services. More careful

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formulation in and consistency of presenting the objectives would have been useful to monitor progress, although in the end the Project’s defined outcome indicators together with its intermediate results indicators allow measurement of progress towards these two objectives. (ii) Strategic Relevance and Approach. The Project was firmly rooted in the GOM’s National Education Program and consistent with the Bank’s Country Partnership Strategy (CPS, Report No. 28141-ME dated March 18, 2004) which proposed to support the Government’s efforts to reduce poverty and inequality. Board approval of the Bank’s loan was required because there was an increase in the loan amount from the US$210 million reflected in both the Phase I APL and the CPS. (The official confirmation of the Government’s request for an increase in the loan--to expand the program particularly the compulsory pre-school attendance--came after the Board’s discussion of the CPS.) The Project built on over a decade of continuous experience by CONAFE in compensatory education programs, and following the earlier phases of the APL, allowed for implementation flexibility, promoting continuous improvements and fostering the active participation of the states in project planning and implementation. Project design was guided by a number of studies, such as: Evaluación del Modelo Pedagógico del Programa de Educación Inicial no Escolarizada (February 2004); Impacto del Apoyo a la Gestión Escolar en las Relaciones de la Comunidad Escolar (February 2004); Reorientación de los Programas Compensatorios del CONAFE: Bases para una Nueva Generación de Acciones (February 2004); Fortalecimiento de la Capacidad de Gestión Institucional (February 2004); Resumen del Estudio Cualitativo de la Red de Asesoría para la Calidad Educativa (February 2004); Políticas Educativas Compensatorias para Población Urbano Marginal (February 2004); Evaluación Cualitativa del Impacto de los Programas Compensatorios (PAREIB) del CONAFE: Oaxaca y Michoacán (February 2004), among others. It also incorporated lessons learned during implementation of the APL’s two earlier phases, including the need to: (a) combine in-service teacher training with classroom-based technical assistance; (b) direct technical assistance at key policy reforms; (c) provide incentives at the state level to generate innovation that will allow adapting a national program to each state’s context; and (d) continue to support parent associations in primary schools as an instrument to strengthen school autonomy. (iii) Poverty, Social Development and Environmental Aspects – Following earlier phases of the APL Program, the Project continued to focus on compensatory programs for disadvantaged children aged 0-14 years (children living in rural or marginal urban areas, and handicapped, migrant and indigenous children) to increase their schooling opportunities and improve the quality of education they receive. As part of project preparation, CONAFE carried out extensive consultations with key stakeholders on the future of its compensatory programs with the aim or reorienting the design of the Project and forming the basis for the next stage of its compensatory education programs. The results of these consultations, including lessons from state level program coordinators, state education planning authorities and national and international education specialists and academics are presented in Annex 10 of the PAD, along with CONAFE’s proposal to incorporate these lessons in project design. The social assessment confirmed that indigenous peoples held quite positive opinions of CONAFE’s compensatory programs.

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The IPDP prepared and consulted in the context of project preparation found that an effective program with extensive consultation and responsiveness to indigenous peoples was already operating and that the successful prior performance of CONAFE bode well for the future education of indigenous students. The Project’s Operational Manual included environmental rules for contractors and basic design specifications and project screening criteria to guide rehabilitation and/or expansion of existing facilities, to comply with appropriate environmental standards as required by the Bank’s OP 4.01, Environmental Assessment.

2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Given the Government’s strong track record in implementation of the Project’s earlier phases, implementation in all aspects was considered satisfactory throughout, and the Project was completed by the original loan closing date. The loan agreement was subject to two cancellations, and a reallocation of funds among expenditure categories (see Para 1.7). The mid-term review, in January 2006, concluded that the Project was well on track towards successful implementation of each of its components and the accomplishment of its development objectives, and discussed progress on the program’s impact evaluation and reviewed the Project’s fiduciary aspects. The participation of state level authorities, SEPEs and CONAFE’s Unidades Coordinadoras Estatales, or UCEs, facilitated incorporating lessons of experience from the implementation of the Program’s two earlier phases. By design, UCEs had a more active involvement in implementation in the third phase. They presented technical proposals as input to the design of the Project’s components and were more involved in the targeting process. Government commitment varied from state to state, as reflected in the states’ financial contribution to the Project (as counterpart). One of the main implementation issues at the state level was the occasional conflict of interest that confronted UCE Coordinators. This was because UCEs’ coordinators reported directly to CONAFE’s central authorities and to the respective State-level Secretary of Education. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Building upon the M&E system developed for the APL’s earlier phases, the Project outlined in the PAD the detailed arrangements for monitoring of its results. These arrangements specified not only responsibilities for monitoring among the implementing agencies, but also sources of data collection, frequency of monitoring, and baseline and target values for outcome indicators associated with each of initial education, preschool education, indigenous primary education, non-indigenous primary schools, primary education and telesecundaria education. It also included this information for the 32 results indicators selected to monitor progress in the implementation of the Project’s three components.

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Implementation of this M&E system went smoothly, as reflected in the availability of data in the results monitoring section of the Project’s Implementation Status Reports, from mid-term onwards. Project Monitoring. The Project’s operations were monitored by an efficient system that CONAFE had already been using in monitoring project implementation of the first two APL phases. Under the Project, funding was provided to update and improve this system to: (a) cover all subcomponents and activities of the Project in the same system; and (b) establish efficient feedback mechanisms that permit timely adjustments during implementation. Project monitoring was carried out routinely, based on information provided by the information system. Occasionally there were concerns about data consistency as progress was reported either on a calendar or school year basis. Also, since lessons and experience with the Program’s earlier phases fed in to the design of the second phase and also to this Project, indicators were adjusted to reflect actual progress and new information. This complicated the compilation of data across all of the APL’s phases, initially raising concerns about the quality of the data but that were in reality more a problem of the consistency in the format in which the information was presented. Monitoring of CONAFE’s Compensatory Programs. Support for monitoring and evaluation of CONAFE’s programs was an integral part of the Project’s design, which provided funding for: (a) developing effective monitoring and evaluation systems for the initial education program (the only program for which CONAFE is fully responsible for service delivery); (b) improving the social accountability of its programs through public dissemination, data collection and analysis of beneficiaries’ perceptions and mechanisms to strengthen social participation; and (c) carrying out several impact evaluation and other studies aimed at improving compensatory programs. In this final phase of the APL program, these evaluations have been important to measure the program’s impact and results, in order to define the Government’s future strategy of compensatory programs. (These studies are described in Section 3.2.) 2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable)

With the exception of the procurement issue described in Section 1.7 above (and that reflected procurement under the previous phase of the APL), there were no major issues with safeguard and fiduciary compliance under the Project. The Government reports some interesting findings with respect to the delivery of education to indigenous groups that are worth highlighting. First, the cultural practices of the indigenous affected participation in the parental training for the Initial Education program. In some cases the women’s role in the family does not allow them to participate in this type of activity. Also, the UCE in the State of Quintana Roo, reported an improvement in the attention to teachers, supervisors and parents because services were delivered in Maya.

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2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) The Project’s post-completion operation/next phase is described in Section 4, Risk to Development Outcome.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The Project’s objectives were relevant at the time it was prepared, continue to be relevant today, and are fully consistent with the CPS’ focus supporting the Government in its efforts to reduce poverty and inequality. Mexico’s achievement of universal primary school enrollment is not sufficient to achieve those goals. It was necessary to ensure that the poorest segments of the population have access to an efficient basic education of improved quality. Achieving this was and continues to be a challenge, particularly in the poorest states, in rural areas, and in indigenous communities, where dropout and repetition rates are high, and preschool coverage, cognitive achievement, and enrollment in secondary education are low. As the final phase of an APL program, the Project’s design aimed to fine tune the delivery mechanism based on the decentralized model that had been implemented successfully in the APL’s earlier phases, and continue to improve the education of Mexico’s poorest groups to meet the standard of the rest of the country. The Project was designed to help disadvantaged groups emerge from poverty while raising the average level and quality of schooling in the population as a whole. These objectives continue to be relevant today, as the demand for an educated and skilled labor force takes on added importance in Mexico’s competitiveness.

3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 2) The Project made strong progress towards its Development Objectives, surpassing many of its original physical targets. Progress towards the achievement of its expected outcomes (and that of the previous two phases of the APL), as per the key outcome indicators highlighted in the PAD, is presented in Table 2 below. Sustained progress was made towards meeting Phase III’s expected outcome indicators. The outcome of the Initial Education Program was affected in part by problems in targeting and by the problems in attracting and retaining agents for implementing the program. Again, this latter issue was the result of competition not only with Oportunidades but also with other economic incentive programs that cater to the same population, which provided higher wages to attract agents.

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Table 2: Basic Education Program Phase III: Outcome Indicators

Target Achieved Achieved Achieved Baseline PAREIB PAREIB PAREIB PAREIB

Indicator III I II III 1997-1998 End 2007 End 2001 End 2004 End 2007

Initial Education Coverage of 0-4 year old children

365,328 545,361 593,802

412,557 411,890

Parents of young children trained

304,440 496,800 503,057 374,248 373,208

Primary Education Failure Rate 10.2 6.8 8.6 8.1 6.2 Repetition Rate 9.5 6.1 8.2 7.9 6.1 Dropout Rate 3.4 1.9 2.7 2.4 1.8 Completion Rate 77.4 86.0 83.9 85.3 88.8 Indigenous Primary Education

Failure Rate 14.0 9.3 12.0 11.6 8.4 Repetition Rate 12.6 8.2 10.8 9.9 8.2 Dropout Rate 7.3 2.8 3.4 3.2 2.8 Completion Rate 63.1 83.9 77.5 81.6 82.8 Non-Indigenous Primary Education

Failure Rate 9.4 5.9 7.9 7.4 5.8 Repetition Rate 8.8 5.7 7.6 7.2 5.6 Dropout Rate 3.8 1.9 2.7 2.3 1.5 Completion Rate 80.1 86.1 85.3 85.6 90.1 Telesecundaria Failure Rate 6.7 3.7 5.4 4.6 1.7 Repetition Rate 0.4 0.9 0.6 0.6 0.8 Dropout Rate 8.2 4.9 6.1 5.4 5.6 Completion Rate 75.5 82.1 77.9 80.6 81.4

Objective: To support the Government’s compensatory education program, which aims to increase schooling opportunities for children aged 0-14 years in the poorest rural, most educationally disadvantaged communities, through the expansion of educational opportunities and improvements in the quality of education. Coverage of Compensatory Education Components 1 (Initial Education) and 2 (Basic Education) of the Project were designed to respond directly to this first objective. The intermediate indicators of the Project’s

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investments under these components are presented in Annex 2, and discussed briefly below. At the end of the 2006-2007 school year, CONAFE’s Initial Education Program was reaching about 373,000 parents, benefiting about 411,000 children aged 0-4 in 22,660 localities. Although these numbers fell short of the target of 496,800 parents benefiting about 545,361 children aged 0-4, the Project made expected progress in training promoters, supervisors and coordinators, engaging participation of the communities in the delivery of parental training programs, providing packages of educational and promotional materials for parents, promoters, supervisors and coordinators, and conducting workshops to monitor and evaluate the results of this innovative program (Annex 2). Among the reasons explaining the shortfall in the number of parents trained in initial education are the following: (a) the program was focused in remote areas with less population, thereby reducing the number of beneficiaries in each group; (b) the high rotation of staff due to low salaries; (c) staff and parental migration for economic reasons; (d) a gradual decline in the birth rate; and (e) the parents’ preference to participate in other, similar and competing social programs that offered greater economic and/or material benefits. At the end of Phase III, for Basic Education, CONAFE’s program was reaching 46,574 localities in 2,426 municipalities, or 98.86 percent of all of Mexico’s municipalities. The Project covered all of the basic education schools located in 250 microregions in 476 municipalities of 17 of Mexico’s federal units that had been identified as priority by the Government due to their comparatively high drop-out rates. In all, CONAFE supported more than 106,840 school units, of which 33,412 preschool, 62,858 primary and 10,570 telesecundarias, including almost all of the country’s indigenous preschool and primary schools. Table 3: Coverage Targets for PAREIB 1998-2007

Phase I Phase II Phase III Program

Baseline 1997-1998

Target 1998-2001

Actual 1998-2001

Target 2002-2004

Actual 2002-2004

Target 2004-2007

Actual 2004-2007

Initial – Children 545,361 411,890 Initial – Families NA NA 508,860 1,048,455 869,004 496,800 373,208 Preschool Total 627,000 656,500 31,413 487,957 403,178 530,000 885,717 o/w School Indigenous 304,979 Primary NA NA NA 4,215,473 4,761,708 3,500,000 4,489,282 o/w Indigenous Primary NA NA NA 779,274 792,070 792,762 836,382 Telesecundaria 217,000 231,000 236,298 652,105 678,912 300,000 902,057

Source: CONAFE (2007) “Informe de Terminación del Proyecto, Programa para Abatir el Rezago en Educación Inicial y Básica (PAREIB) Fase III; World Bank (2004) Report No. 30964 “Implementation Completion Report for Basic Education Development Porject in Support of the Second Phase of the Basic Education Development Program” and World Bank (2004) Report No. 29091-ME “PAD for Basic Education Development Project in Support of the Third Phase of the Basic Education Development Program" For telesecundaria, the intermediate indicator specified “4,681 telesecundaria schools provided with supplementary packages of didactic materials (benefiting about 300,000 students).” At completion, the Project had benefitted 10,570 schools and around 902,000 students of telesecundaria.

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The Borrower’s Project Completion Report dated December, 2007 reports the achievements discussed below. At the preschool level, the Project benefited 54.5 percent of rural students and 44 percent of teachers in about 39 percent of all rural schools (of which 76 percent were multi-grade). At the primary level, the Project covered around 4.6 million students, or about one-third of the country’s total primary school enrollment. At this level, the students and teachers that counted on support from the Project accounted for about 90 percent of rural enrollment and about 88 percent of the teachers in these schools. About 82 percent of all rural schools were supported, of which about 72 percent were multigrade. CONAFE provided support to 26.7 percent of all rural telesecundarias, of which 82 percent were schools with less than five teachers. About 29 percent of total rural enrollments and 28 percent of teachers in telesecundaria were supported by CONAFE. As shown in Table 3 above, the Project exceeded its original coverage targets for preschool education, primary education and telesecundaria. Coverage was expanded, and quality improved (see below) through the provision of packages of school supplies and didactic materials at the various levels, construction, rehabilitation and/or equipping of educational facilities and administrative and technical centers, delivery of training and technical assistance to the CTEs and APFs, provision of performance incentives for primary school teachers and of support for school supervision. Although not all of the intermediate results were achieved at project completion (Annex 2), this did not preclude sustained progress towards the achievement of the Project’s expected development outcomes (Table 2). Intermediate results for support and training for the APFs and performance incentives for primary school teachers were a bit below target, although both of these are considered to have produced important results. Several UCEs mentioned that the limitation of providing school management support only to schools with more than 20 students precluded supporting schools in remote areas. Overall, however, the impact on parental involvement in school activities appears positive as reported by an UCE: “the training of parents produced important modifications in practices of rural families, their childrens’ benefit, including: helping children with homework, making space available at home for children to study, and review of children’s notebooks to provide positive feedback. It also brought about stronger ties between parents and teachers….”. Although quantitative information to show the impact of these incentives is not available, several UCEs agree that linking the monthly economic incentives to the schools, supervised by the APFs, has increased stability and continuity of teachers in those schools. While the monthly stipends appear to have had a positive influence on the ability to retain teachers in schools, the arrangements for distributing the stipends have evolved over time and among different schools. In some schools, for instance, the economic incentives were used as an extra bonus and the school director distributed the amount evenly so that all teachers received a bonus. Finally, this activity has now been fully institutionalized, and several states now fund these economic incentives fully out of their own resources.

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Quality, Efficiency and Equity Improvements CONAFE’s compensatory program has led to important improvements in the educational indicators of covered schools. An update of the impact of CONAFE’s program on educational achievements of different groups and at different educational levels has not been carried out. Still, previous evaluations of CONAFE’s programs1 have shown that: (a) they reduce the inequality in learning achievements between students in schools with and without compensatory education programs both at the primary level and in telesecundaria; (b) there is greater relative efficiency in reducing the achievement gaps in mathematics at the primary level and in Spanish in telesecundaria; (c) compensatory education programs at the primary level do not have a significant impact on learning achievement in Spanish; and (d) the differences in learning achievements between indigenous and non-indigenous students, in similar conditions, are reduced with compensatory programs, but this is less so in more isolated groups. Compensatory programs do not have a significant impact on Spanish learning achievements in indigenous schools. In addition, the above evaluation concluded that: (a) at the primary level, students in schools with compensatory programs improve their mathematics achievement by between 4.8 and 5.6 points a year, but not in Spanish; the compensatory programs reduce overall achievement differences by between 9 and 30 percent a year; (b) at the primary level, the compensatory programs have an insignificant impact on Spanish achievement which is not explained by the existence of indigenous students in the schools with compensatory programs; (c) at the primary level, the compensatory programs produce an overall increase in learning achievement of 3.7 points or 0.8 percent annually; however it is not possible to infer the number of years that would be required to eliminate inequality in learning achievements; (d) in mathematics at the primary level, indigenous students in schools with compensatory programs scored 6.5 points above the non-indigenous students in schools without compensatory programs, and by 5 points above the non-indigenous in schools with compensatory programs. However, the compensatory programs did not result in evident and consistent impact on the Spanish learning achievement of indigenous students; and (e) at the secondary level, compensatory programs have been more effective in improving learning achievements in Spanish, with an improvement of 0.8 to 3.4 points per year, against a learning achievement of only 0.2 to 1.4 points per year in mathematics. This represents an annual reduction of differences in earning achievements between students in schools with and without compensatory programs of 24 percent in mathematics achievements and 38 percent in Spanish. The Project has continued to promote improvement in the efficiency of basic education in CONAFE-supported schools by shortening the time it takes students to complete

1 (Shapiro, Joseph and Jorge Moreno Trevino (2003). “Compensatory Education for Disadvantaged Mexican Students: An Impact Evaluation Using Propensity Store Matching” World Bank) and CONAFE (2006) Tomo 1 Análisis Crítico de las Evaluaciones de los Programas Compensatorios 1994-2004 from the Serie Política Compensatoria en Educación: Evaluación y Análisis.

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preschool, primary and lower secondary and by increasing completion rates, as shown in Table 2 above. The results at the end of the three-phase program reveal important achievements as follows: (a) the failure rate in schools with CONAFE’s program came down by 12.1 percentage points, dropping from 18.8 percent in the 1991-92 school year to 6.7 percent in the 2005-06 school year. During the same period, schools not supported by CONAFE witnessed a reduction of only 6.4 percentage points in the failure rate, dropping from 9.7 percent to 3.3 percent; (b) the repetition rate in schools with CONAFE’s program came down by 11.5 percentage points, dropping from 18.1 percent in the 1991-92 school year to 6.6 percent in the 2005-06 school year. During the same period, schools not supported by CONAFE witnessed a reduction of only 5.7 percentage points, dropping from 9.0 percent to 3.3 percent; (c) the dropout rate in schools with CONAFE’s program came down by 12.6 percentage points, dropping from 15.4 percent in the 1991-92 school year to 2.8 percent in the 2005-06 school year. During the same period, schools not supported by CONAFE witnessed a reduction of only 3.5 percentage points, dropping from 4.3 percent to 0.8 percent; and (d) the terminal efficiency, or the percent of students that complete a cycle in the expected number of years, has increased by 68.7 percentage points for CONAFE-supported schools during the program’s existence, while schools not supported by CONAFE have increased their terminal efficiency by only 19.8 percentage points during the same period. Strengthening of SEPEs’ and CONAFE’s Institutional Capacity Component 3 of the Project (Institutional Strengthening) addressed several activities that were aimed at strengthening the SEPEs’ and CONAFE’S institutional capacity to coordinate and manage the delivery of a quality compensatory education program. The intermediate indicators of the Project’s investments under this component are presented in Annex 2, and discussed briefly below. The Project was successful in supporting the pedagogical and administrative strengthening of the SEPE’s and their and CONAFE’s efforts at monitoring and evaluating its compensatory program. CONAFE played a catalytic role in promoting dialogue and information sharing workshops among states, aimed at sharing experiences, lessons and recommendations, all of which has resulted in greater ownership of this program at the state level and cross-fertilization among SEPEs. Training programs for SEPEs’ pedagogical teams, on subjects selected in consultation between CONAFE and each of the SEPEs, prioritized the following topics that were considered highly relevant to compensatory programs: (a) multi-grade teaching; (b) in-service teacher training; (c) educational evaluation; (d) intercultural education; and (e) use of new technologies, among other topics. Specific areas for strengthening the SEPEs’ administrative capacity were selected on the basis of diagnostics of weaknesses, annual technical assistance plans, and a list of priority activities, selected by CONAFE in consultation with the SEPEs. Early on, in 2004, CONAFE carried out a diagnostic of the SEPEs’ technical assistance and training needed to improve their administrative capacity. This diagnostic was carried out with a group

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that included two representatives from, and the staff responsible for institutional strengthening in, each of 14 SEPEs. This was followed by a second stage of the diagnostic, in which 12 SEPEs were represented (out of 17 invited to participate). Technical assistance and training was provided based on these diagnostics, tailored to the state SEPE’s needs, but focused on the following main themes: school supervision, training of administrative staff, human resource management, financial management, equipment and materials management, monitoring and evaluation systems and coordination between regular and compensatory programs. As a result of this assistance several states that counted on technical assistance and training under the Project have reorganized the structure of their SEPE, have established integrated information and monitoring systems, have elaborated state-wide education plans, and/or put in practice operational manuals that guide the work of their SEPE. The earlier Phase II Project had placed a strong emphasis on designing and implementing systems for monitoring of educational data, education evaluation and learning achievements, as well as the defining SEPEs’ responsibilities for these activities, and strengthening their capacity where needed. As the final phase of a three-stage APL, the Project placed an important focus on monitoring and evaluation of the Program as a whole. CONAFE published an extensive series of studies, in nine volumes, in which its experience with compensatory education programs in Mexico is analyzed. These include: (a) A Critical Evaluation of the Evaluations of Compensatory Programs, 1994-2004; (b) An Analysis of Targeting in Compensatory Programs; (c) The Social Contexts of Primary Schools in Mexico; (d) Evaluations by Legislative Sessions: Operations and Results; (e) Beneficiaries’ Views of Compensatory Programs; (f) Emerging Practices in the Use of Computers in Telesecundaria; (g) The Impact of Promoting Parental Involvement in Schools; (h) School and Teaching Practices in Multi-grade Primary Schools; and (i) The Evaluation of Compensatory Programs: Notes for an Equitable Education Policy. Shortly before completion of the Project, CONAFE promoted an exchange of lessons learned among participating states, to guide the program in the future. There were two weak aspects of these activities: the impact evaluation of the initial education program and the system to improve education planning. Although the evaluation of the initial education program was eventually completed, it was not considered of acceptable quality, and therefore of no value to guide implementation of this program in the future. Problems involved the selection of the survey sample for collecting baseline data and its design, and lack of adherence to the original terms-of-reference. Because of the importance of this evaluation, the Government has requested that the Bank provide assistance in identifying alternative sources of funding to carry it out satisfactorily. Finally, SEP did not create and implement an information system, based on data available in the national information system, to support the implementation of CONAFE’s compensatory programs in each state.

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3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) The Project included a detailed economic and financial analysis that looks at the potential impact on learning outcomes, enrollment rates, and education financing. The economic analysis in the PAD depends on both qualitative and quantitative arguments. Rates of Return. The analysis in the PAD did not include a direct calculation of the potential rates of returns as these were calculated for the first phase of the Project and estimated at around 18 percent. The first PAD used a standard methodology to calculate the rates of returns. Although data is not available to recalculate the rates of return, the initial results included a sensitivity analysis. Terminal efficiency rate at the primary level is sufficiently high to guarantee a high rate of return (the terminal efficiency was in 2004-05 is 90 percent compared to 84 percent needed). The terminal efficiency rate for lower secondary education is approximately 79 percent, the minimum needed for a 10 percent rate of return. The targets have been achieved or exceeded. In sum, the rate of return estimates were realistic. Investing in preschool. The Project put special emphasis on improving the coverage of early childhood interventions and at the same time in improving the impact of these interventions. The economic analysis in the PAD makes some strong but credible arguments about the potential contribution of early childhood development that have been supported in the broad literature. Nationally, preschool enrollment increased from 3.7 million (59 percent) in 2003-2004 to 4.7 million (80 percent) in 2006-2007. The states that the Projects have given special attention, such as Chiapas, have coverage that continues to exceed the national average. The Project has met its goal for coverage in indigenous schools. Investing in basic education. The Project largely met its quantitative targets for supporting increase in enrollment at the primary and lower secondary levels. The Project came at a time of high coverage in both primary and lower secondary levels. Mexico saw the coverage rate in primary education steady at about 93 percent and slightly increasing at the lower secondary level to around 90 percent. At the national level, there have been small gains in the internal efficiency and terminal efficiency of both systems as more students stay in school and progress through school without repetition. Studies carried out during the course of project implementation show that AGEs (school based-management grants to Parent’s Associations) had a significant impact on increasing terminal efficiency through the reduction of drop outs and grade repetitions2.

2 Taken from studies done under the Quality of Education AAA, phase I and II.

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Learning achievements. The economic analysis draws attention to a study showing the performance of CONAFE-supported schools compared to other schools and it also analyzes recent trends in learning outcomes. These analyses generally show that the gap between CONAFE and non-CONAFE schools is decreasing. However, as there is no control for selection into (and desertion out of) the CONAFE program, it is hard to draw strong conclusions about the impact of the CONAFE programs on learning outcomes. Since the approval of the Project, there were several studies that looked at the determinants of quality of learning in Mexico3. While these studies did not directly focus on CONAFE, several of them showed that increasing the role of parents would have a positive impact on learning. Getting parents involved in basic education was one of the accomplishments of the Project. Financial Sustainability. Education is the single largest Secretariat (government department) at the federal level and is also one of the biggest expenditures for state governments. In total, Mexico spends betweens 5 to 5.5 percent of its GDP on education, which is one of the highest proportions in Latin America. Since the Project was approved, annual increases in public expenditures for public education have exceeded GDP growth. The government has indicated that it will continue its support to the activities in the Project through CONAFE, confirming the assumptions made in the economic analysis. Given the small size of the project as a percentage of total education spending4 and given that World Bank financing goes directly to the national treasury as opposed to the executing agency, sustainability entirely depends on the government. The annual increase in education spending is more than sufficient to cover additional expenditures.

3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Moderately Satisfactory The third phase of the Basic Education Project’s overall outcome is considered moderately satisfactory based on the Program’s and Project’s continued relevance in improving access to quality schooling for children aged 0-14 years in the poorest rural, most educationally disadvantaged communities, the substantial achievement of its expected outcomes with only moderate shortcomings, including the increased educational efficiency, and the efficiency with which it was implemented.

3 Alvarez, Garcia, and Patrinos (2007), “Institutional Effects as Determinants of Learning: Exploring State Variation in Mexico” focus on the results from the 2003 PISA (taken before the approval of Phase III of the Project.

4 The total cost of the three phases of PAREIB is 0.5 percent of total national education spending.

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3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development By definition, compensatory programs such as PAREIB are targeted at lower income groups in rural and marginal urban areas. The Project supported the implementation of PAREIB in the poorest rural, most economically disadvantaged communities in all of Mexico. It was not considered a targeted poverty alleviation program, and as such the Government did not compile information on the Project’s impact on poverty. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) CONAFE is a well-established and well-staffed institution, with a well-defined mandate. The Project provided training for CONAFE in financial management, procurement and monitoring and evaluation, to strengthen already existing capacity. CONAFE’s Compensatory Programs Unit, responsible for project coordination, has operative units—one each for initial education and basic education--in each state (Unidad Coordinador Estatal, UCE) that work closely with the SEPEs in the coordination of compensatory programs. Project activities supported not only the strengthening of CONAFE, and the SEPEs as described in Section 3.2, but also provided training and assistance to Technical School Councils, APFs and the teachers themselves, all of which have a fundamental role in improving the delivery of educational services. The UCEs are now stronger, and count on staff responsible for administrative, operational and pedagogical aspects of the program. They are now capable of planning, monitoring and continuously evaluating the programs in their respective states. An important feature mainstreamed by CONAFE under this Project was the information sharing and dissemination of lessons among SEPEs, which provides a forum where different states can learn of pilots, implementation issues, results from others. The impact of this cross-fertilization, coordinated by CONAFE in its catalytic role, and complemented by a strong focus on program evaluation, bodes well for Mexico’s ability to continue to make progress on reducing inequities in access to high quality education. (c) Other Unintended Outcomes and Impacts (positive or negative)

N/A

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes) CONAFE held a workshop to receive feedback from all UCEs and UCEIs on December 10-15, 2007. The proceedings and findings of this workshop, in Spanish, are available in project files.

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4. Assessment of Risk to Development Outcome Rating: Moderate It is difficult to judge the risk to the Project’s Development Outcome, but on balance it is considered moderate. Several factors bode well for sustaining the Project’s benefits over time, and Mexico’s ability to continue to make progress in ensuring that the poorest segments of its population have access to high quality basic education, in an efficient manner. These are: (a) the activities supported by the Project continue to be fully consistent with the national education policy, and have support from the SEP at the central level and the state SEPEs; (b) CONAFE is a mature, strong institution, with well-qualified staff, capable of coordinating the implementation of a complex program efficiently; (c) a strong culture of monitoring and evaluation, including the need to submit yearly evaluations to the National Congress, has led to constant adjustments to the program based on lessons during implementation; and (d) the stronger capacity that the state-level SEPEs working with UCEs now have for implementing compensatory programs, in coordination with communities and parents. CONAFE's Initial Education Program offers an interesting alternative to conventional early childhood development programs designed to care for children in institutional settings. By focusing on training parents to care for their children at home, the Program is inexpensive on a per child basis. It is an attractive low cost alternative which has awaken the interest of many countries. The low cost of the Program and the pressing mandate to provide universal preschool services combine to ensure that it will be maintained by the Government. However, although the Program appears to provide many lasting benefits to the target population, a thorough assessment of its impact on children's development, on their health status, and learning abilities still has not taken place. It is, therefore, urgent that a sound impact evaluation be carried out at the earliest.

5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues)

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory The Bank’s performance in ensuring quality at entry was satisfactory for the following reasons. As the third phase of an APL which continued to be relevant to the country context and assistance priorities, the Project incorporated as needed lessons from implementation during earlier phases, adjusting and adapting the Project’s design as justified (See also Section 2.1). For example, the mechanism for delivering technical assistance to states under Component 3 was modified under the Project. During implementation of the APL Program’s earlier phases there was a certain amount of resources for technical assistance allocated by state, but this did not produce the desired results. Under the Project, resources for technical assistance were allocated to 14 states that had just undergone elections and a change in administration. Priorities were defined

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by the states themselves during an initial seminar where issues and corresponding technical assistance needs were defined. The collaboration between the Government and the Bank was excellent, reflecting a strong relationship with a sophisticated middle-income client that valued the technical expertise that the Bank brought to guide the Project’s design (and eventually implementation). The Bank’s preparation team could have been more careful in defining the Project’s objectives and relevant indicators, although this did not in the end impact implementation of the final phase of a successful APL. The preparation effort could also have described adjustments to the Project’s relevant outcome and output indicators that were made to reflect lessons and results from the APL Program’s earlier phases. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory The quality of the Bank’s supervision effort was also satisfactory. The supervision team included the appropriate mix of skills, and specialized support for procurement and financial management was provided to address issues that affected implementation in the Project’s early phases. Supervision missions were carried out at routine intervals, but supervision reporting could have been a bit more explicit in focusing on results and in discussing the status of implementation of the Project’s many activities, as well as issues it confronted. Continuing efforts begun in the APL’s earlier phases, the team continued to assign importance to monitoring and evaluation, and engage in dialogue with the Government on the importance of being able to focus on the program’s development impact. The Bank’s supervision team promoted a cross-fertilization of experiences with compensatory programs among CONAFE and similar programs in both Brazil and Uruguay by promoting visits of CONAFE officials to these countries and vice-versa. Towards the final year of implementation of this final phase of the APL, the team became very engaged in dialogue with the Government on promoting a cross-fertilization of experiences among different states, and on discussing priorities for follow-up to the next level of compensatory programs. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory Given its performance in ensuring quality at entry and in supervision, the rating for the Bank’s overall performance is considered satisfactory.

5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The Borrower’s performance is considered satisfactory, from preparation through completion. Priority to the program was sustained through a change in Presidential administration, which had no effect on the pace of implementation. Sporadically, the Project faced issues with lack of counterpart funding for certain activities, but these were largely addressed, albeit with some delay. Coordination with SEP could be strengthened

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somewhat, especially since the one main activity that was to be implemented by SEP (the design and implementation of a national information system to support the implementation of CONAFE’s compensatory programs in each state), and that addressed this very issue, was not carried out. (b) Implementing Agency or Agencies Performance Rating: Satisfactory CONAFE’s performance is also considered satisfactory. It continued to manage this final phase of the APL with high technical and administrative standards, and to strive to further a process of consultation and dialogue with all of the relevant actors: the parents, the teachers, and the education authorities at the state and federal level. It also intensified efforts to promote an interchange of new experiences, problems and ideas between different states, incorporating or adjusting their program as required to address the findings. Although CONAFE has administered the Project and most processes required by the Bank loan extremely well, procurement processes continued to be slow, and coupled with requirements to follow ICB for Bank-financed inputs, often caused delays in delivery which impacted their timeliness for the school year. Finally, in seeing the final phase of this program come to a close, CONAFE began early to attempt to define a next stage, that would refine it focus to the most needy groups and levels, taking into account experience acquired throughout it coordination of the Basic Education APL. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The Overall Borrower Performance is considered satisfactory, in view of the Government’s and especially the Implementing Agency’s performance.

6. Lessons Learned (both project-specific and of wide general application)

• APL Instrument – The choice of the APL instrument was appropriate. It provided an overall framework for implementation of a Government program over time, while allowing adjustments throughout implementation. The existence of good systems for monitoring and evaluation appears even more important in an APL program than for a stand-alone investment project.

• Teacher Incentives – Focusing teacher incentives not only on the teachers

themselves, but on the school, and involving parents in the process, appears to have produced better results than if these were linked to teachers alone. The Government reports in its Completion Report that this system of incentives contributed to retaining teachers in primary schools in isolated communities with difficult access, increased the teachers’ attendance, reduced turnover and relocation, allowed for students with difficulties in learning to have access to teachers after school hours, and motivated the teachers to participate in school planning activities. Some UCEs are recommending that, as a next step, teachers’

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incentives could be linked to educational achievement of their students. On the other hand, despite the preliminary positive impact of these incentives, there is some concern that because the Teachers’ Union has become involved in their distribution they will be seen as a salary increase and in the end lose their incentive effect. It would be very important to evaluate systematically the effectiveness of this incentive on the teachers’ mobility, and, if possible on learning achievements, and to focus efforts on maintaining the incentive aspect of these monthly stipends.

• Dropout Rates - The dropout rates for telesecundaria appear to be the most

resistant to change. The causes of this are not clear, but it would be worth looking into the distribution of these programs, and background information on the students. CONAFE is addressing the supply issues of education to a target group that would otherwise not be provided quality education. But it would seem that the students to which telesecundaria programs are targeted would be those that could most benefit from incentives to demand, especially those provided under other Government programs. On the other hand, while these students have incentives to enroll they may likely also be those children with a higher likelihood of eventually dropping out of school. In any event, such resistance in the dropout rate at this level merits further investigation.

• Coordination with other Government programs – The less-than-expected

participation of parents of 0-4 year olds in training under the Initial Education Program appears to be influenced in part by preference for participation in other Government programs. Before continuing to expand this program, it would be important to identify further the causes behind shortfalls in parental participation, and, if necessary, ensure coordination and complementarities with other programs. Also, the ability to attract and retain agents to implement this program also appears to have been affected, in part, by other Governmental programs that catered to the same pool of potential agents.

• Initial Education, Impact on Achievement in Primary – Although the programmed

Impact Evaluation of the Initial Education Program was not completed in a satisfactory manner, the Government’s Completion Report highlights initial feedback from a survey carried out by Fundación Este País in April 2006 that found promising results for this program. The survey reports that 86.6 percent of the parents that participated in training found them to be of value, and a similar percent of parents felt that their children had an easier-than-expected transition to preschool as a direct result of the training they received. Further, it found that 76 percent of the school directors and 80 percent of the teachers reported perceiving greater parental attention and support to children by parents who had attended the training in initial education.

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7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies (b) Cofinanciers N/A (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) N/A

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal

Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

1. INITIAL EDUCATION 82.60 79.60 96.4 1.1 Training in Initial Education for Promoters, Supervisors and Coordinators 22.00 19.00 86.4

1.2Community Participation 0.90 0.00 0.0 1.3 Training for Parents of 0-4 year old Children 51.30 46.20 90.1

1.4 Education Materials 7.20 12.60 175.0 1.5 Monitoring and Evaluation 1.20 1.80 150.0 2. SUPPORT FOR BASIC EDUCATION 358.20 350.5 97.9 2.1 Educational Infrastructure and Equipment 104.70 98.20 93.8

2.2 Didactic Materials 88.90 96.90 109.0 2.3 Training and Technical Assistance for the CTEs 24.70 17.40 70.4

2.4 Support and Training for Parents Associations (APFs) 89.00 83.10 93.4

2.5 Performance Incentives for Primary School Teachers 42.90 47.80 111.4

2.6 Support for School Supervision 8.00 7.20 90.0 3. INSTITUTIONAL STRENGTHENING 56.20 66.30 118.0

3.1 Strengthening the Pedagogical Capacity of the SEPEs 2.00 0.50 25.0

3.2 Strengthening the Administrative Capacity of the SEPEs 3.40 3.60 105.9

3.3 Monitoring and Evaluation of the Project 4.10 2.90 70.7

3.4 Administration of the Project 46.70 59.40 127.2 0099.9

Total Baseline Cost 497.00 496.40 99.9

Physical Contingencies 0.00

0.00

Price Contingencies 0.00

0.00

Total Project Costs 497.00 496.40 Front-end fee PPF 0.00 0.00 Front-end fee IBRD 3.00 1.5

Total Financing Required 500.00 497.90 99.6

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(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 200.00 199.5 99.8 International Bank for Reconstruction and Development 300.00 298.4 99.5

TOTAL 500.0 497.9 99.6

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Annex 2. Outputs by Component

Intermediate Result Target Actual Component 1, Initial Education • Training in Initial Education for

Education Promoters, Supervisors and Coordinators

• Approximately 27,000 promoters, 2,700 supervisors and 820 coordinators will be trained annually

• 26,600 promoters, 2,754 supervisors and 834 coordinators annually

• Community Participation • 10,560 annual visits to the communities that operate initial education programs, with a total of 31,680 visits by the end of the program

• 31,314 visits by the end of the program

• Training the parents of 0-4 year old children

• Training for 496,800 parents of children, benefiting 545,361 children 0-4 years of age

• Training for 374,248 parents of children (75 percent of target), benefiting 412,557 children 0-4 years of age (76 percent of target)

• Educational Materials • Provision of 527,933 packages of educational and diffusion materials for parents of children, promoters, supervisors and coordinators

• 527,933 packages provided

• Monitoring and Evaluation • 15 regional workshops and 2 national workshops will be held annually, with a total of 51 workshops during the program

• 17 workshops annually. 51 by the end of the program

Component 2, Support for Basic Education • Educational Infrastructure and

Equipment • 17,805 educational facilities and

administrative and technical centers constructed and rehabilitated

• 5,936 educational facilities and administrative and technical centers equipped by the end of the program

• Teacher Resource Centers, rehabilitated and equipped by end of the program

• 18,708 educational facilities and administrative and technical centers constructed and rehabilitated

• 7,261 educational facilities and administrative and technical centers equipped

• No Teacher Resource Centers were rehabilitated and equipped

• Didactic Materials • 530,000 preschool children provided with school supplies each year

• 15,322 packages of didactic materials provided to preschools (53.2 percent of which are indigenous)

• 3.5 million students in 36,000 primary schools each year (including all indigenous schools) provided with school supplies

• 36,000 packages of supplementary didactic materials provided to primary schools, including all indigenous schools

• 4,681 telesecundaria schools provided with supplementary packages of didactic materials (benefiting about 300,000 students)

• The packages of school supplies were substituted by packages didactic materials for schools

• 33,412 packages of didactic materials provided

• 4.5 million packages of school

supplies provided to primary school students each year

• 42,707 packages of didactic material

provided to primary schools • 10,570 supplementary packages of

didactic materials provided to telesecundaria schools (benefiting about 902,000 students)

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Intermediate Result Target Actual • Training and technical

assistance to the Consejos Técnicos Escolares (CTEs)

• Pedagogical technical training provided to the CTE of 33,000 primary schools with multi-grade and indigenous classrooms

• Pedagogical technical training provided to the CTE of 33,492 primary schools by the end of the program

• Support and Training for Parent Associations (APFs)

• 62,951 interventions of school management: 15,322 for preschools and 47,629 for primary schools

• Training on efficient management of schools provided to APFs of 62,951 schools

• 62,858 interventions of school management: 16,964 for preschools and 45,894 for primary schools

• 62,531 APFs trained on efficient

management of schools

• Performance Incentives for Primary School Teachers

• 12,600 Incentives provided to teachers yearly

• 12,547 incentives provided

• Support for School Supervision • 5,150 interventions for school supervision; 4,440 for supervisors and 710 for sector chiefs

• 5,107 supervisors and sector chiefs supported: 4,395 for supervisors and 712 for sector chiefs

Component 3, Institutional Strengthening • Strengthening of the

Pedagogical Capacity of the SEPEs

• Training programs delivered to 31 states: 3 technical and pedagogical teams in each state

• 36 programs delivered

• Strengthening of the Administrative Capacity of the SEPEs

• Provide 31 technical assistance sessions of 2 training sessions each, to operational teams of SEPEs

• 29 technical assistance session provided

• Monitoring and Evaluation of the Project

• Create a comprehensive follow-up system to monitor the program and provide support through compensatory strategies

• Continuation of the modernization of the school mapping system through the consolidation of the national school mapping system of DGPPP of SEP

• Create a social accountability mechanism that includes an effective communication strategy for the dissemination of project information to the beneficiaries and encourage social participation

• Completion of studies

• Monitoring system expanded and improved

• Not carried out • The Programa de Contraloría

Social began operating in 2005.

• 12 evaluation Studies were completed5

5 The Studies completed under the Project were: 1) Evaluación de los Programas Compensatorios 2004 (BUAP), 2) Evaluación de los Programas Compensatorios 2005 (BUAP), 3) Estudio diagnóstico sobre las estrategias de focalización de las políticas y programas compensatorios del CONAFE, 4) Uso pedagógico de las computadoras proporcionadas por los programas compensatorios del CONAFE a escuelas / Prácticas emergentes en la inserción de computadoras en telesecundaria, 5) Impacto de la educación inicial no escolarizada en el desarrollo infantil, 6) Impacto de los Programas Compensatorios del CONAFE en los logros de aprendizaje en los estudiantes de las escuelas a nivel preescolar y primaria, 7) El impacto del Apoyo a la Gestión Escolar en las relaciones entre la comunidad escolar, 8) Los preescolares apoyados por CONAFE: habla la comunidad escolar sobre la nueva normatividad de preescolar y sobre el PEINE / La comunidad educativa del preescolar y los apoyos compensatorios del CONAFE: los expertos opinan, 9) La heterogeneidad de las primarias públicas / Escenarios sociales de las escuelas primarias en México, 10) El impacto de asistencia técnica y administrativa proporcionada por las SEPEs/ Impacto de las acciones de fortalecimiento técnico administrativo a las SEPE/Estado del desarrollo administrativo de los sistemas de educación básica de las entidades federales, 11) La evaluación de los Programas Compensatorios. Nota sobre una política educativa, and 12) Evaluación de los Programas Compensatorios 2006 (BUAP)

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Intermediate Result Target Actual • Administration of the Project • Continuation of the support of the

administration of the project in PAREIB III, consolidating all the achievements of PAREIB I and II with respect to the operating standards of the program and the procedures that ensure its efficient administration

• FMRs were completed and submitted regularly

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Annex 3. Economic and Financial Analysis (including assumptions in the analysis) The Project included a detailed economic and financial analysis that looks at the potential impact on learning outcomes, enrollment rates, and education financing. The economic analysis in the PAD depends on both qualitative and quantitative arguments. Rates of Return. The analysis in the PAD did not include a direct calculation of the potential rates of returns as these were calculated for the first phase of the Project and estimated at around 18 percent. The first PAD used a standard methodology to calculate the rates of returns. Although data is not available to recalculate the rates of return, the initial results included a sensitivity analysis. Terminal efficiency rate at the primary level is sufficiently high to guarantee a high rate of return (the terminal efficiency was in 2004-05 is 90 percent compared to 84 percent needed). The terminal efficiency rate for lower secondary education is approximately 79 percent, the minimum needed for a 10 percent rate of return. The targets have been achieved or exceeded. In sum, the rate of return estimates were realistic. Investing in preschool. The Project put special emphasis on improving the coverage of early childhood interventions and at the same time in improving the impact of these interventions. The economic analysis in the PAD makes some strong but credible arguments about the potential contribution of early childhood development that have been supported in the broad literature. Nationally, preschool enrollment increased from 3.7 million (59 percent) in 2003-2004 to 4.7 million (80 percent) in 2006-2007. The states that the Projects have given special attention, such as Chiapas, have coverage that continues to exceed the national average. The Project has met its goal for coverage in indigenous schools. Investing in basic education. The Project largely met its quantitative targets for supporting increase in enrollment at the primary and lower secondary levels. The Project came at a time of high coverage in both primary and lower secondary levels. Mexico saw the coverage rate in primary education steady at about 93 percent and slightly increasing at the lower secondary level to around 90 percent. At the national level, there have been small gains in the internal efficiency and terminal efficiency of both systems as more students stay in school and progress through school without repetition. Studies carried out during the course of project implementation show that AGEs (school based-management grants to Parent’s Associations) had a significant impact on increasing terminal efficiency through the reduction of drop outs and grade repetitions6. Learning achievements. The economic analysis draws attention to a study showing the performance of CONAFE-supported schools compared to other schools and it also analyzes recent trends in learning outcomes. These analyses generally show that the gap

6 Taken from studies done under the Quality of Education AAA, phase I and II.

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between CONAFE and non-CONAFE schools is decreasing. However, as there is no control for selection into (and desertion out of) the CONAFE program, it is hard to draw strong conclusions about the impact of the CONAFE programs on learning outcomes. Since the approval of the Project, there were several studies that looked at the determinants of quality of learning in Mexico7. While these studies did not directly focus on CONAFE, several of them showed that increasing the role of parents would have a positive impact on learning. Getting parents involved in basic education was one of the accomplishments of the Project. Financial Sustainability. Education is the single largest Secretariat (government department) at the federal level and is also one of the biggest expenditures for state governments. In total, Mexico spends betweens 5 to 5.5 percent of its GDP on education, which is one of the highest proportions in Latin America. Since the Project was approved, annual increases in public expenditures for public education have exceeded GDP growth. The government has indicated that it will continue its support to the activities in the Project through CONAFE, confirming the assumptions made in the economic analysis. Given the small size of the project as a percentage of total education spending8 and given that World Bank financing goes directly to the national treasury as opposed to the executing agency, sustainability entirely depends on the government. The annual increase in education spending is more than sufficient to cover additional expenditures.

7 Alvarez, Garcia, and Patrinos (2007), “Institutional Effects as Determinants of Learning: Exploring State Variation in Mexico” focus on the results from the 2003 PISA (taken before the approval of Phase III of the Project.

8 The total cost of the three phases of PARIEB is 0.5 percent of total national education spending.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Lending Harry Anthony Patrinos Senior Education Economist, TTL LCSHE Mark Hagerstrom Country Sector Leader LCSHD Vicente Paqueo Lead Economist LCSHS Victor Manuel Ordoñez Financial Management Specialist LCOAA Claudia Macias Operations Officer LCSHH Raja Bentaouet Kattan Education Specialist HDNED Anna Sant’ Anna Consultant (Sociologist) LCSHH Lea D. Braslavsky Lead Procurement Specialist LCOPR Jorge Moreno Trevino Junior Professional Associate LCSHD Mariangeles Sabella Legal Counsel LEGLA Joseph Shapiro Junior Professional Associate LCSHS Alina Garduño Lozano Language Team Assistant LCSHD Maria E. Colchao Senior Program Assistant LCSHE Tania Carrasco Social Development Specialist LCSEO Rosa Valencia Estrada Procurement Analyst LCOPR

Supervision/ICR Ricardo Silveira Senior Operations Officer, TM LCSHE Erik A. Bloom Senior Economist LCSHE Maria E. Colchao Senior Program Assistant LCSHE Alina Garduno Lozano Temporary LCSHD Paul J. Gertler Consultant HDNVP Mark V. Hagerstrom Sector Leader LCSHD Martha Belem Hernandez Junior Professional Associate LCSHD Efraim Jimenez Consultant LCSPT Claudia Macias Operations Officer LCSHH Victor Manuel Ordonez Conde Sr Financial Management Specia LCSFM

Harry Anthony Patrinos Lead Education Economist HDNED Gabriel Penaloza Procurement Analyst LCSPT Felix Prieto Arbelaez Sr Procurement Spec. LCSPT Alexis Roach Temporary LCSHD Anna Maria Sant'Anna Consultant LCSHE Luz A. Zeron Consultant LCSFM Suzana Abbott Lead Operations Officer LCSHD

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(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs)Lending

FY04 28 129.91 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 28 129.91 Supervision/ICR

FY04 0.00 FY05 18 78.08 FY06 32 137.56 FY07 35 169.67 FY08 9 36.79

Total: 94 422.10

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Annex 5. Beneficiary Survey Results (if any) N/A

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Annex 6. Stakeholder Workshop Report and Results (if any) CONAFE held a workshop to receive feedback from all UCEs on December 10-15, 2007. The proceedings and findings of this workshop, in Spanish, are available in project files.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR The Borrower sent its Project Completion Report dated to the Bank on December 21, 2007. Additionally, the Borrower provided detailed comments on a marked-up draft of the Bank’s ICR that was sent for comment on May 7, 2008. These comments related mostly to requesting the inclusion of the source of data and providing updated data. The Borrower’s comments have been included in this final version of the Bank’s ICR. A copy of the Borrower’s marked-up comments received on June 13, 2008, are available in the Project file.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A

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Annex 9. List of Supporting Documents World Bank, Project Appraisal Document, Report No. 17535-ME dated May 7, 1998, Basic Education Development (PAREIB) Project World Bank, Project Appraisal Document, Report No. 23295–ME dated February 21, 2002. Second Basic Education Development Phase II Project. World Bank, Project Appraisal Document, Report No.29091–ME dated June 10, 2004 Basic Education Development Project in Support of the Third Phase of the Basic Education Development Program World Bank, Implementation Completion Report, Report No. 24347-ME dated May 31, 2002. Phase I of a Basic Education Development Project World Bank, Implementation Completion Report, Report No. 30964-ME dated December 23, 2004. Second Phase of the Basic Education Development Project in support of the Basic Education Development Program. Rodolfo Ramírez Raymundo and Patricio Chaves Zaldumbide, Los Programas Compensatorios. Notas para una política dirigida a la equidad educative, Diciembre 2006 World Bank Policy Research Working Paper 3334, Joseph Shapiro and Jorge Moreno Trevino, Compensatory Education for Disadvantaged Mexican Students: An Impact Evaluation Using Propensity Score Matching, June 2004 CONAFE, Informe de Terminación del Proyecto, Programa para Abitir el Rezago en Educación Inicial y Básica (PAREIB) Fase III, Diciembre, 2007

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MAP