College of Social Sciences School of Government and Society International Development Department IDD

Dissertation Capacity Issues in the Implementation of a Conditional Cash Transfer Programme: The Case of Juntos in Peru

Dissertation submitted in Partial Fulfilment of the degree of Master of Science (MSc) in Governance and Development Management (2008-2009)

Student: ID: Supervisor: Word count:

Abel Canchari de la Cruz 0961771 Andrew Nickson 13,471

September 2009

Acknowledgements

I would like to express my gratitude to Professor Andrew Nickson, my personal tutor and supervisor at the University of Birmingham, for his mentoring, guidance and immense support. My appreciation also goes to Richard Batley for getting me interested in public management and capacity development. I am also indebted to the Ford Foundation International Fellowships Programme (IFP). Thanks to all the team in Peru. My warm thanks go to James Conder and Richard Gidwaney for their overwhelming hospitality and friendship when I was a new arrival. Also, many thanks to Wan Ching Chen, Karen Sunahara, Emily Tsuo, and all my friends at the University of Birmingham.

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Acronyms
CCT CAS CGTP CIAS CONADES CONFIEP DNPP ENNIV FONCODES GDP HDI IADB INEI MEF PATH PACFO PCM PRONAA RENIEC SIS UNDP WB Conditional Cash Transfer Contratacin Administrativa de Servicios [Temporary Contract] Confederacin General de Trabajadores del Per [General Confederation of Workers of Peru] Intersectoral Commission for Social Affairs Conferencia Nacional sobre Desarrollo Social [National Conference on Social Development] Confederacin Nacional de Instituciones Empresariales Privadas [National Confederation of Private Business Institutions] Direccin Nacional de Presupuesto Pblico [National Directorate of Public Budget] Encuesta Nacional de Niveles de Vida [National Survey of Living Standards] Fondo de Cooperacin y Desarrollo Social [Fund for Cooperation and Social Development] Gross Domestic Product Human Development Index Inter American Development Bank Instituto Nacional de Estadstica e Informtica [National Institute of Statistics and Informatics] Ministerio de Economa y Finanzas [Ministry of Economy and Finance] Program of Advancement through Health and Education Programa de Complementacin Alimentaria para Grupos de Mayor Riesgo [Programme of Food Supplements for Groups at Highest Risk] Presidency of the Council of Ministers Programa Nacional de Asistencia Alimentaria [National Food Assistance Programme] Registro Nacional de Identificacin y Estado Civil [National Agency for Identification and Civil Status] Seguro Integral de Salud [Comprehensive Health Insurance] United Nations Development Programme. World Bank

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Executive Summary
This dissertation analyses capacity issues in the implementation of Juntos, which is a conditional cash transfer (CCT) programme, by taking into account five dimensions of capacity as an analytical framework. The study is underpinned by the literature on capacity developed by Hilderbrand and Grindle (1997). Therefore, the implementation of Juntos is analysed in the light of the five interconnected dimensions of capacity: the action environment, the institutional context of the public sector, the task network, the organisation itself and the human resources. The research question addressed is: in which of the five capacity dimensions are the constraints greatest and affect the performance of Juntos? Evidence suggested that the action environment did not hinder capacity; conversely, the economic conditions allowed the government to have fiscal resources for funding the programme and to have an increasing budget. The political context, also, was a key factor for the continuity and the openness of the programme. Concerning the institutional context of the public sector, the evidence points at this being the source of the main constraints. The low absorption capacity of the budget led to the shortage of supply of public services which undermined the attainment of one of the programmes objectives: to boost human development. The task network represented a challenge because Juntos required the intervention of other organisations for accomplishing its objectives. Juntos struggled to control the activities carried out by these public agencies. It appeared that the weak performance of the task networks organisations affected the overall functioning of the programme.

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Regarding organisation, Juntos governance structure stood out due to its powersharing feature of the Board of Directors, with representatives of the State the civil society organisations and the private sector. It makes the programme more transparent and accountable. On the topic of human resources, the programme faced constraints in terms of having short-term contract employees. Also, the lack of neutrality of the promoters for monitoring the compliance of conditionalities generated a false sense of achievement of targets. Finally, Juntos did not have influence on employees who belong to the organisations of the task network, and the majority of those employees benefited from having permanent status without incentives or penalties tied to performance. Therefore, the implementation of Juntos revealed that the highest capacity constraints were related to the institutional context of the public sector, and the task network.

Contents
Acknowledgements ................................................................................................... ii Acronyms .................................................................................................................. iii Executive Summary .................................................................................................. iv Chapter One: Introduction ........................................................................................ 9 1.1. Research objective ........................................................................................... 9 1.2. Research question ........................................................................................... 9 1.3. Methodology ................................................................................................... 10 1.4. Organisation of the dissertation...................................................................... 10 Chapter Two: Theoretical Framework.................................................................... 11 2.1. Defining capacity ............................................................................................. 11 2.2. Dimensions of capacity ................................................................................... 12 2.2.1. The action environment ............................................................................ 12 2.2.2. Institutional context of the public sector .................................................... 13 2.2.3. Task network ............................................................................................ 14 2.2.4. Organisation ............................................................................................. 15 2.2.5. Human resources ..................................................................................... 16 2.3. Policy implementation and capacity constraints .............................................. 17 Chapter Three: Principal Features of Juntos ........................................................ 18 3.1. Juntos Objectives ........................................................................................... 18 3.2. The rationale ................................................................................................... 19 3.2.1. Poverty...................................................................................................... 19 3.2.2. Human Development ................................................................................ 20 3.2.3. Inequality .................................................................................................. 21 3.2.4. Market Failure ........................................................................................... 22 3.3. Coverage ......................................................................................................... 22 3.4. The budget ...................................................................................................... 23 3.5. Targeting mechanisms .................................................................................... 25 3.6. The beneficiary and the amount of the transfers ............................................. 26 3.7. The conditionalities and services delivered by the government ...................... 27

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3.8. Organisational arrangements for implementation ........................................... 28 3.8.1. The Primary Organisations ....................................................................... 29 3.8.2. The Secondary Organisations .................................................................. 29 3.8.3. The Supporting Organisations .................................................................. 30 Chapter Four: Implementation of Juntos and Capacity Issues ........................... 31 4.1. The action environment ................................................................................... 31 4.1.1. The economic context............................................................................... 31 4.1.2. The political context .................................................................................. 32 4.1.3. The social context ..................................................................................... 33 4.2. Institutional context of the public sector .......................................................... 33 4.2.1. The budget cycle in the public sector ....................................................... 34 4.2.2. The procurement and acquisition systems ............................................... 39 4.3. Task network ................................................................................................... 40 4.3.1. The Ministry of Education ......................................................................... 42 4.3.2. The Ministry of Health ............................................................................... 42 4.3.3. The Ministry of Women and Social Development ..................................... 43 4.3.4. The National Institute of Statistics and Informatics - INEI......................... 43 4.4. Organisation .................................................................................................... 44 4.4.1. The governance structure ......................................................................... 44 4.4.2. The Board of Directors.............................................................................. 45 4.4.3.The Executive ............................................................................................ 47 4.4.4.The Transparency and Oversight Committee ............................................ 48 4.5.Human resources ............................................................................................. 49 4.5.1. The contract scheme ................................................................................ 49 4.5.2. Promoters lack of neutrality for monitoring compliance ........................... 50 4.5.3.Front-line employees and their accountability ........................................... 51 4.6. Capacity Constraints ...................................................................................... 51 Chapter Five: Conclusions ..................................................................................... 53 References................................................................................................................ 55 Appendixes............................................................................................................... 59 Appendix 1. Dimensions of capacity ...................................................................... 59 Appendix 2. Basic information on selected programmes ....................................... 60 Appendix 3. Social indicators of targeted regions .................................................. 62 Appendix 4. HDI in not-targeted regions ................................................................ 63 Appendix 5. Matrix of the Logical Framework, 2008-2011 ..................................... 64

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Tables
Table 1. Peru: Human Development Index, 2007 ................................................................... 20 Table 2. Coverage of the Programme, 2005-2009 .................................................................. 22 Table 3. Conditionalities and outcomes ................................................................................... 28 Table 4. GDP growth, real annual variations (%) .................................................................... 32 Table 5. Phases of the budget process ................................................................................... 34 Table 6. The process of budget transference to sectors, 2005-2007 ...................................... 35 Table 7. Budget transference to sectors and level of execution .............................................. 37 Table 8. Members of the Board of Directors ............................................................................ 46 Table 9. Members of the Transparency and Oversight National Committee........................... 48 Table 10. Ranking of Capacity Constraints ............................................................................. 52

Graphs
Graph 1. Peru: evolution of poverty and extreme poverty, 1985-2008 .................................... 19 Graph 2. Evolution of Juntos Budget ...................................................................................... 23 Graph 3. Budget distribution according to expenditure categories (%) ................................... 25 Graph 4. Overall level of budget execution of Juntos, including sectoral expenditure ............ 38

Chart
Chart 1. Governance structure ................................................................................................ 45

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Chapter One: Introduction

The Programme of Direct Support to the Poorest - Juntos, which means together, is a conditional cash transfer (CCT) programme being implemented in Peru since August 2005. Juntos represents a new generation of social protection programme, therefore a new approach for poverty reduction and fostering human development, and it is placed among the principal ones within the social policy framework. This programme has been designed taking into account the lessons learnt from the implementation of CCT programmes across Latin America such as Oportunidades in Mexico, Bolsa Familia in Brazil, Familias en Accion in Colombia, Puente-Chile Solidario in Chile, among others. However, there is not enough research regarding capacity issues in the implementation of CCT programmes, because the existing literature mainly focuses on the effectiveness of this kind of intervention.

1.1. Research objective To analyse capacity issues in the implementation of Juntos, by taking into account five dimensions of capacity as an analytical framework: the action environment, the institutional context of the public sector, the task network, the organisation, and the human resources.

1.2. Research question In the light of the objective it is legitimate to ask the following research question: In which of the five capacity dimensions are the constraints greatest and affect the performance of Juntos.

1.3. Methodology This is a qualitative study with a case-study approach because it will analyse the implementation of a specific social programme. The information has been collected using documentary analysis of secondary sources such as evaluation and monitoring reports, minutes of the Board of Directors meetings, and official web pages. The theoretical framework has been developed from the existing literature.

1.4. Organisation of the dissertation Besides the introduction, the second chapter develops the theoretical framework with regard to capacity; then it elaborates on the five dimensions of capacity, and at the end it briefly analyses the relationship between capacity issues and policy implementation. The third chapter analyses the main features of Juntos: its objectives, rationale, coverage, the budget, targeting mechanisms, the beneficiaries and the amount of the transfers, the conditionalities and services delivered by the government, and the organisational arrangements for implementation. The fourth chapter presents the empirical evidence with regard to the five capacity dimensions, and highlights the constraints, if any, in the implementation of Juntos. The final chapter concludes highlighting the findings related to the five dimensions of capacity.

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Chapter Two: Theoretical Framework

2.1. Defining capacity At the outset it is important to define what it is understood by capacity in the public sector. A straightforward definition of capacity is provided by Hilderbrand and Grindle, as ...the ability to perform appropriate tasks effectively, efficiently, and sustainably (1997: 34). Appropriate tasks can be seen as those suitable or right for a particular situation or occasion. In other words, those tasks required according to the particularity of the country in terms of development. Tasks are the work or actions to be done regularly by the governmental organisation. Effectiveness is referred to the achievement of the intended results; efficiency is reached when the organisation works or operates quickly in a coordinated way; and sustainability is attained when the effects of the actions undertaken are able to continue over a period of time. Batley and Larbi, offer a complementary definition: capacity is the factor that explains human performance within a given organisational framework and institutional environment (2004: 18). Thus capacity comprises three interplaying levels: the micro level - individuals, the intermediate level organisations, and the macro level institutions (Brinkerhoff, 2008; Grindle 1997: 9). Those three levels take into account the supply side of capacity, which is concerned with the government or organisation itself, and the demand side of capacity which is referred to the broad political, social and economic context or institutional underpinnings in which the government performs or implement programmes or policies (Grindle, 1997: 6-7).

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2.2. Dimensions of capacity The framework provided by Hilderbrand and Grindle (1997), identifies five interconnected dimensions for capacity analysis: the action environment, the institutional context of the public sector, the task network, the organisation itself and human resources. This framework is useful for analysing the capacity issues because of its systematic approach which takes into account factors located at different levels. Consequently this study takes these five dimensions of capacity as an explanatory model (see Appendix 1).

2.2.1. The action environment The action environment stands for the contextual factor existing in the country. Generally it considers the background of economic, social and political factors which influence the functioning of public sector organisations. As a result, the implementation of projects, programmes or policies is directly affected by the outer conditions, such as the economic performance of the country, political stability or the level of human development (Hilderbrand and Grindle, 1997: 35). Evidence of the effect of the action environment on the performance of government organisations is supported by research carried out by Hilderbrand and Grindle in six developing countries (Bolivia, the Central African Republic, Ghana, Morocco, Sri Lanka, and Tanzania). With regard to economic conditions, in these countries factors such as fiscal crisis, falling real income levels, governments inability to pay for supplies, equipment, and vehicles, affected seriously the overall performance. For instance, it was thought that the Ghanaian economy, in the 1960s had stagnated, in the 1970s had declined and in the late 1970s and early 1980s was reaching crisis proportions (Larbi, 1998: 172-173). As a result, in the early 1990s there was poor performance in the annual Gross Domestic Product - GDP growth (3.3% and 3.8% in 1990 and 1994, respectively). The inflation rate was in double digits (10% in 1992, reaching 60% in 1995). And Ghana was also dependent on aid: from 1998 to 1992, 10% of the GDP was contributed by international aid (Larbi, 1998: 187). On the other hand, there were numerous political aspects which had impact on the performance, such as instable, illegitimate and ineffective political institutions in the Central African Republic. Instability and volatility are the words that summarise the

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process of sudden change in the government that had taken place in Ghana. For example from 1957 to 1997, there were four military coups, two palace coups and only five elections for President (Larbi, 1998: 173). Consequently there had been a pendulum effect shifting from a centrally planned economy to a market oriented economy and vice versa. In relation to human resource development, the research have found that in some countries there was a poorly funded and ineffective investment in human development and high levels of conflict were extremely detrimental to capacity, as evidenced by the case of Sri Lanka, in which long-existing capacity was undermined (Hilderbrand and Grindle, 1997: 40). To sum up, the authors point out that low growth, political instability, and low human resource development were found in those countries with the weakest overall performance and the best performers had much more positive profiles along all these dimensions (1997: 41). Policies oriented to work on the action environment are likely to have results in the long run because modifying economic, political, and social structures is a daunting task for governments. Bringing about change at this level might require long lasting reforms, beyond a single government.

2.2.2. Institutional context of the public sector This dimension involves the set of rules of the game which shapes public sector behaviour. It may include the legal framework for employment in the public sector, salaries, rewards, qualifications, promotion patterns and so on. Furthermore, the institutional context considers the financial resources, the governmental mandate and existing national policies (Hilderbrand and Grindle, 1997: 37). This dimension encompasses what Douglass North calls institutions: the rules of the game in a society (1990: 3). Having a suitable institutional context implies reforms such the development of legal systems, policy regimes, mechanisms of accountability, regulatory frameworks, and monitoring systems which are the framework for the government actions (Grindle, 1997: 19). These conditions may enable or constrain the achievement of the tasks performed by the government.
!the impact of rules, regulations and procedures on supporting or constraining performance is two-edged. On the one hand effective rules and procedures for

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getting things done and getting them done right are essential for day to day functioning and for being able to confront longer-term development challenges ! On the other hand, these rules and procedures can lead to inflexibility and unduly complicated requirements that actually stand in the way of accomplishing important tasks (Hilderbrand and Grindle, 1997: 43).

For instance Bolivia had a deficient regulatory system and legal framework which influenced negatively in the public sector operation. On the contrary, Morocco had abundant rules and regulations which slowed down the public administration and therefore affected the effectiveness and efficiency of service delivery. The prescription provided by the authors are two pronged: regarding the basics, they suggest having salaries enough to attract competent public servants, and having comprehensive structures and process (job descriptions, hiring procedures, reporting relationships, supply lines, and information system) in order to enhance predictability in the procedures and reduce the scope for discretion which may allow rent-seeking behaviour. Complementary to these basics, the improvement of the organisational autonomy is suggested; this may include meritocratic mechanisms, capacity for hiring and firing, transparency, accountability, and so on (Hilderbrand and Grindle, 1997: 45).

2.2.3. Task network This comprises the array of organisations which are involved directly or indirectly in the execution of a given task. Hence, performance may be affected in a positive or negative way for the level of communication and interaction with other organisations, namely other public sector agencies, non-governmental organisations, and the private sector. Again, Hilderbrand and Grindle have found that Weaknesses in these networks that constrained performance came from two sources: the absence of organisations to fill needed roles for any given task, or inadequate performance of those roles; and the lack of effective interactions among organisations in the network (1997: 46). They recognise three kinds of organisations within the network: primary organisations which play the central role in completing the task; secondary organisations are critical to the task carried out by the primary organisations; and supporting organisations supply complementary services in order to sustain the tasks (1997: 37).

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Larbi provides an example of the importance of the task network for successful contracting-out processes in Ghana. He points out that the most important constraint was not in the domain of the public sector organisations. The constraints were mainly in the market, i.e. the private sector: the lack of private firms willing and able to take on contracted-out services is a major limitation on the ability to ensure that there is competition among contractors, and that competition leads to efficiency (1998: 314-315). The private sector was not developed enough; therefore it was difficult to find room to manoeuvre for a competitive tendering. Effective interaction and strong coordination are key factors for good performance in the whole task network. Interaction may comprise the exchange of information, linkages for collaborative work. Coordination is achieved when different organisations perform the task effectively as a whole generating synergy. Special attention is placed to the coordination between bodies in charge of the policy-making process and those concerned with policy-implementation. Interventions aiming to build capacity in the task network should be directed at the weak spots, targeting the weakest organisations in the task network avoiding the negative effect on the performance of the whole task network (Hilderbrand and Grindle, 1997: 47).

2.2.4. Organisation The organisation itself is regarded as the core dimension when it comes to analysing capacity. The structure, processes, resources, and management styles of organisations affect how they establish goals, structure work, define authority relations, and provide incentives structure. These factors promote or constrain performance because they affect organisational output and shape the behaviour of those who work within them (Hilderbrand and Grindle, 1997: 37). In this context, concepts such as organisational culture, ethos, leadership style, mission, objectives, equipment, monetary and non-monetary rewards influence global organisational performance. For analysing constraints within this dimension it is important to consider the different aspects within the label of organisational culture. One of them is the commitment to a mission and results-oriented performance [which is] fundamental to establishing these positive interactions and enabling some organisations to be productive despite constraints at other levels indicated in the framework (1997: 48). Another is the structure of work, authority relationships, communications, and behavioural norms

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(49): concepts such as equity, participation, and flexibility are highlighted in the dayto-day organisational management. To sum up a mission-focused mystique, mission-driven activities and a management style are important elements for an enhanced and functional organisational culture. For illustrating a case of capacity constraint, Larbi, points out that in Ghana when the reforms for introducing elements of New Public Management, specifically contracting out had been implemented there were a range of limitations: i) lack of coordination between the central level and the agencies which deliver the service, or point of implementation, ii) difficulties for monitoring and supervising the service contracted out, which can lead to poor service delivery, and iii) organisational resistance for contracting out ancillary services that were seen as core functions, and therefore there were doubts about the capacity of the private sector for providing such services Almost all of them are related to the organisational culture, structure and practices (1998: 282).

2.2.5. Human resources This dimension is perhaps the most important, because it constitutes the basis which supports the organisational performance. Therefore it is determined by the level of education of employees, their technical skills, their motivation and their trajectory influence on the organisational level and on the capacity for delivering services. The workforce is the foundation for every organisation; it is the lifeblood of the public sector. This dimension may represent a constraint if there are limitations in the capacity of individuals for carrying out the everyday activities due to educational and skill inadequacies in the personnel. As the dimensions interplay and influence each other, the limitations in human resources may be caused by the institutional context of the public sector and their policies related to employment. Further, !poorly performing officials and organisations may only be symptoms of dysfunctions rooted more deeply in political, social and economic contexts (Grindle, 1997: 11). In the case studies, Hilderbrand and Grindle conclude that employee performance is related to competitive recruitment procedures. Without exception, the organisations that were best able to recruit appropriate talent were those that had public announcements and competitions for applicants; rigorous examinations or interviews,

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or both; and some kind of review board to ensure objectivity (1997: 53). Furthermore, the authors argue that the main problem related to human resources is a problem of utilisation, in other word what jobs individuals are assigned and what kinds of incentives shape their behaviour in those jobs (1997: 54). Finally, street-level bureaucrats as named by Lipsky (1980) ultimately have influence on the organisational capacity and might re-shape a policy in the stage of the implementation. Parsons also talks about these actors: professionals have a key role in ensuring the performance of a policy...Teachers, for example, may develop ways of teaching or implementing government policy which actually result in outcomes which are quite different to those intended or desired by policy-makers (1995: 469).

2.3. Policy implementation and capacity constraints If capacity is considered as fundamental for implementing public policies in developing and developed countries alike, constraints are understood as the external or internal factors which control what an organisation does by keeping it within particular limits. Therefore, capacity constraints may be one of the factors which explain the policy-implementation failure or poor performance of social programmes. Ultimately capacity constraints are overcome through holistic capacity-building processes targeting key dimensions. Hilderbrand and Grindle, in order to demonstrate that capacity-building activities should not be narrowly designed, argue that organisations and trained individuals do not perform in a vacuum; their ability to carry out assigned responsibilities is deeply affected by the broader contexts within which they operate... In some countries performance problems diagnosed at the organisational or individual level may be so deeply embedded in economic, social, and political deficiencies that efforts to improve performance most focus primarily on these conditions. (1997: 32-33). Notwithstanding that the importance of the environment is acknowledged as sine qua non for capacity-building, the reality shows that the efforts are restricted to the streamlining of the organisation itself or to the enhancement of professional skills of the human resources.

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Chapter Three: Principal Features of Juntos

This chapter examines the programme Juntos, highlighting its principal features. This conditional cash transfer (CCT) programme was introduced in August 2005, during the government of President Alejandro Toledo. Juntos provides a monthly benefit of S/.100 soles (about US$ 30) to poor families with children under 14 years old, who have to go to health centres for preventive check-ups, improve their nutrition levels, attend school and obtain birth certificates and identity documents. These are the conditionalities or commitments that are agreed by the family in return for the monthly cash transfers. The programme started in the 110 poorest rural districts in the regions of Ayacucho, Apurimac, Hunuco and Huancavelica and was expanded to cover 638 districts in fourteen regions by 2008.

3.1. Juntos Objectives The objectives of Juntos are twofold: in the short run, to reduce the level of poverty and extreme poverty (through cash transfers), and in the long run, to foster human development, particularly for future generations in order to break the intergenerational transfer of poverty through economic incentives to promote and support access to education, health, nutrition and identity1 (Juntos, 2009). Juntos' foundations are based on three main policy documents. The first one at the international level is the Millennium Declaration and the Millennium Development Goals which consider poverty reduction, access to health and education among their eight objectives. At country level the National Accord, which contains twenty eight policy objectives, states as priorities actions regarding poverty reduction, promotion of equal opportunities, universal access to education, universal access to health
1

CCT programmes share the particularity of having dual objectives, similarly to Juntos (de Janvry and Sadoulet, 2006; Fiszbein, et al., 2009; Son, 2008). See Appendix 2 for basic information on selected CCT programmes in Latin America.

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services, food security and nutrition. Finally the National Plan for Overcoming Poverty and the Charter of Social Policy (2001-2006) consider a three pronged strategy: i) development of human capabilities, ii) the promotion of economic opportunities and skills for the poor, and iii) the establishment and strengthening of social safety nets.

3.2. The rationale 3.2.1. Poverty The rationale behind the creation of the programme is to overcome long lasting poverty and extreme poverty conditions. Peru is a country of 28 million inhabitants, with almost half of its population living below the poverty line (two dollars per day), even though the figures for the last three years seem to be dropping, and around 15% of the population live under conditions of extreme poverty (one dollar per day).
Graph 1. Peru: evolution of poverty and extreme poverty, 1985-2008
70 Poverty
58 54 51 45 42 44 54 48.6 48.7 44.5 39.3 36.2

60

Extreme poverty

50

40

%
30
27 19 18.5 19 18.5 14.5

20

15

17.1

17.4

16.1 13.7 12.6

10

0 1985 1991 1994 1995 1996 1997 2000 2004 2005 2006 2007 2008 Years

Source: INEI 2009. Data from National Survey: ENNIV 1991, 1994, 1997, 2000. ENAHO 1985, 1995, 1996, 2004 and 2008.

These national averages, however, do not show the extreme cases in rural areas: 69.3% of poverty and 37.1% of extreme poverty in 2006 (Instituto Nacional de Estadistica - INEI, 2009). Further, in the districts of the targeted regions, extreme

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poverty may affect to 71% of the population, as happens in Huancavelica. For more details see Appendix 3. It is important to mention that the figures shown above correspond to the headcount measure which is an indicator of the number of people falling below the poverty line, but it is not sensitive to the severity of the condition. Thus, poverty gap is the additional amount of ! income that must be generated by a country to bring all the poor above the poverty line! It is measured as a percentage of a ! countrys total current percentage of income that must be created and received by the poor! to bring each familys income above the poverty line (Cyper and Dietz, 2009: 7-8). According to figures of the World Bank, the poverty gap at national poverty line in 2004 was 18%, which is below the indicator for Bolivia in 2002 (31.2%), but above Mexico in the same year (6.3%), (World Bank, 2009).

3.2.2. Human Development The Human Development Index (HDI) is a composite indicator which measures three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by income) (UNDP, 2009). In the case of Peru, the HDI for 2007 is 0.806, which places the country within the category of High Human Development. As shown in the table below, the position in the ranking is the 78th among 182 countries (Idem, 2009). Table 1. Peru: Human Development Index, 2007

Source: Human Development Report 2009 (UNDP, 2009).

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In 2005, Peru was considered to be a country with low human development, with a HDI of 0.597. While these figures indicate that has been experiencing significant improvements in quality of life in recent years, it still has regions and provinces which are lagging behind or are far from the national averages. Instances of the uneven development across the country can be seen in the following regions: Huancavelica with the lowest HDI (0.492) and Apurimac with 0.520; and the capital city area Lima and Callao with the highest indicator (0.703). Going beyond the regional averages, it is possible to find districts with even lower indicators: i.e. Quillo with 0.410, a district located in the province of Yungay, Region of Ancash (PNUD, 2006). See Appendixes 3 and 4.

3.2.3. Inequality Another enduring problem related to poverty is inequality which is measured by the Gini coefficient. This indicator attempts to capture the degree of income inequality or the overall income distribution (Cyper and Dietz, 2009: 42). In 2006, this value was 49.6 (World Bank, 2009). This is below the average of Latin America which has one of the highest levels of inequality.2 This indicator reveals the wide gap within the society. For instance, according to data of the United Nations Development Programme - UNDP, in Peru in 2005, 20% of the richest populations earned 51.2% of the total national income. Merely 4.4% of the national income was earned by 20% poorest of the population (UNDP, 2005). This is so because, in general the richest populations are involved in trade, manufacture, service and other economic activities located in the main cities or the countrys capital. Whereas 20% poorest are isolated in the hinterlands, involved in agriculture of subsistence, or they are in the urban informal sector. These are indicators of a dualistic3 and unequal society which is acting as a barrier for a sustainable and homogeneous development.

Colombia had 58.5 and Chile had 52 in 2006. However Japan had 24.9 in 1993, Pakistan 30.6 in 2002, and Korea 31.6 in 1998, to mention a few. 3 Since the independence from Spain, in 1821, Peru has remained as a dualistic society -in words of Sir Arthur W. Lewis- with a traditional low productivity rural and predominantly agriculture sector (producing what they consume) specially located in the highlands and the Amazon, and an incipient modern capitalist sector, where production [is] more technologically driven and worker productivity [is] higher, generally in the main cities, which is due to the centralised pattern of growth (Cyper and Dietz, 2009: 153).

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3.2.4. Market Failure Under these conditions, and in the context of neo-liberal economic and social policies, CCT programmes, also attempt to deal with the causes of market failures such as externalities and equity issues. Externalities are important because the consumption decision of a single agent affects the welfare of others. By forcing individuals to consume more of a good more than they would like, conditional cash transfer schemes serve to reconcile societal preferences with individual choices! Children are unable to make their own human capital investment decisions and rely on their parents instead. Since the returns to education or health are typically felt in the long run while the benefits of, say, child labour are immediate! (Das et al. 2004: 2-3). In this case the government intervenes on the grounds that individual consumers, namely children and parents, may fail to take externalities into account when making consumption decisions. The second market failure is the equity issues which is referred to the existing poverty conditions, social exclusion and problems of income distribution. Under this condition economic growth and social welfare may fail to reconcile since sustained economic growth in the country has not been translated into welfare for the poorest social groups by means of trickle down. Therefore, the government intervention is by subsidy to poor families for purchasing goods and services, provision and finance of public and merit goods such as health, education, and nutrition. When consumed, merit goods create positive externalities; and when equity issues are addressed, these may lead to maximised economic growth and social welfare (Muller, 2003).

3.3. Coverage The coverage figures of households have increased almost tenfold from the pilot phase in 2005 to July 2009. In the next table, the same pattern can be seen for the number of districts and regions. Table 2. Coverage of the Programme, 2005-2009
2005 (Pilot phase) Regions Districts Households 4 110 32,000 2006 (Dec) 9 321 159,224 2007 (Dec) 14 638 353,067 2008 (Dec) 14 638 420,491 2009 (July) 14 638 416,191

Source: Juntos, 2009. Available from: http://www.juntos.gob.pe/expansion-programa.php (Accessed: 10 August, 2009)

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By July 2009, the programme covered: 416,191 households in extreme poverty, out of 757,949 total rural households4 (54.9%). 638 districts, out of 1810 districts across the country (35.2%). 14 regions out of 24 in the whole country (58.3%).

More information about the number of beneficiaries of other programmes in Latin America can be found in Appendix 2.

3.4. The budget Facilitated by the favourable economic environment, the total budget of the programme has increased exponentially due to the improved fiscal performance. In the past the increment of the budget of other social programmes was modest and incremental, but in Juntos it seems to be overwhelming. In 2005 the Programmes resources were US$ 28 million, and by 2009 this amount had rocketed to US$ 235.1 million5. Graph 2. Evolution of Juntos Budget
250 206.5 200 170.7 150 235.1

US $ m

97.8 100

50

36.3

0 2005 2006 2007 Years 2008 2009

Source:

(Juntos,

2009)

Economic

Transparency.

Available

from:

http://www.juntos.gob.pe/transparencia_informe_economico.php [Accessed 14 July 2009]

Information taken from: http://www.juntos.gob.pe/expansion-programa.php (Coverage of the Programme). 5 The exchange rate is as follows: 2005 US$1 = S/.3.30; 2006 US$1 = S/. 3.27; 2007 US$1=S/.3.12; 2008 US$1 = S/.2.94; and 2009 US$1 = S/. 2.90.

23

The total budget is spent according to the following categories: Cash transfer or subsidy: this is for the direct transfer to the beneficiaries in order to achieve one of the core objectives. In the first three years it had a tendency to increase (see Graph 3). Extra information found in the minutes shows that the 2008 budget was fairly similar; and in 2009 this category accounts for 88% of the total budget (Juntos Programme, Board of Directors, 2009: 4). Transfer to other sectors or public bodies: Ministry of Health, Education, and Women and Social Development. This is for fostering the supply of public services. These sectors expenditures are directly linked to the achievement of the objectives of Juntos. In 2008 the category transfer to other sectors was eliminated; since then this budget has been directly transferred to every sector (Farfan, 2009). Recurrent expenditure or administrative cost: This is for funding the functioning of the programme itself. It includes the amount of money paid to the employees of the organisations itself, and the expenditure for the services provided by the National Bank and the INEI. From 2005 to 2007 this category accounted for 18% of the total budget; however, the budget devoted to funding the payroll was only 11%, which distinguishes Juntos from other programmes across Latin America (Juntos, 2009).

24

Graph 3. Budget distribution according to expenditure categories (%)

Source: Minutes of the Board of Directors 2005 - 2008. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 12 September 2009]. Economic Transparency. Available from: http://www.juntos.gob.pe/transparencia_informe_economico.php [Accessed 14 July 2009].

3.5. Targeting mechanisms The targeting process is carried out in three stages, which is similar to Oportunidades in Mexico: i) geographic targeting, ii) evaluation of households based on a statistical simulation model (proxy means test), and iii) community validation.

First stage: the geographic targeting. The total number of districts (1828) in the country was sorted using a composite poverty index (extreme poverty and poverty gap). So, the output is a number of districts from the poor regions. The program excludes the sparsely populated regions or heterogeneous in terms of poverty, so as to avoid dispersion of efforts and save administrative costs. Further, the other variables taken into account were child malnutrition, unmet basic needs, and degree of affectation by the political violence6 (civil war).

These variables came from the Final Report prepared by Truth and Reconciliation Commission.

25

Second stage: Assessment of households. The Programme selects the beneficiaries by using a statistical simulation model (proxy-means test). Eligibility is determined on the ground of the data collected which includes demographic variables (presence of children under 14 years and pregnant mothers), education, housing characteristics, assets, livestock and agricultural equipment. The output is a score for every household, which is compared to the cut-off point established by the programme.

Third stage: Community validation. A village meeting is organised to validate the list of beneficiaries. At this stage, households which meet the following conditions, may be excluded: i) households whose members are public sector employees, pensioners, recipients of alimony, business owners, lenders and relatives of local authorities, and ii) owners of livestock, large vehicles or other assets.

3.6. The beneficiary and the amount of the transfers The Programmes direct beneficiaries are: children under 14 years old and the mother of those children living in extreme poverty. The indirect beneficiaries are the other members of the household.

The strategy adopted by Juntos was to transfer the female head of the beneficiary household, under the assumption that they can use the resources to improve the welfare of the whole family and especially the children. It is assumed that the male head of the household may mismanage the resources (Hoddinott and Bassett, 2008). This positive gender bias is an important feature shared by the CCT programmes (Son, 2008). Consequently the payees names are included in the data base, and they will receive a debit card for withdrawing the money every month from the nearest branch of the National Bank. In the rural areas where there is no National Bank branch, the payment is by private agencies which transport the money.

The benefit given by the programme is S/. 100 per month. This is equivalent to US$ 30. The assumption behind the benefit of US$ 30 is that this amount is enough for overcoming the status of extreme poverty, defined by income of one dollar a day. In the case of Juntos the amount of the transfer is the same regardless of household

26

size or number of children. Therefore Juntos differs from other similar programmes in Mexico, Brazil and Colombia, whose benefits vary depending on the number of children in the family (Banco Mundial; 2007: 37). Only Chile Solidario, considers benefits that gradually decrease as the time goes by.

The Programme has considered the graduation or exit of the beneficiary after four years. Limited public resources is one of the reasons, and the other one is the fact that throughout the four years the direct beneficiaries receive the cash transfer plus a package of services (health, education) which are aimed to contribute to tackle the causes of extreme poverty (lack of income) and low human development (access to health and education services). Precisely in 2009 there should be 32,000 households ready for the graduation or exit.

3.7. The conditionalities and services delivered by the government Juntos has a complex and ambitious set of conditions for the eligibility of beneficiaries: i) children under 14 years must be enrolled in primary school and keep a record attendance rate of 85%, and to visit health centres for regular check-ups; ii) mothers have to attend antenatal and postnatal clinics; iii) adults should have national identity and ensure that their children have birth certificates. Recipients are required to sign a voluntary agreement which contains the conditionalities. However there is a concern about the sustainability of the effects and changes in the behaviour of the beneficiaries, for instance, going to the school or to the health centres for their wellbeing without being paid or compensated with US$ 30 for doing so. The following table contains the link between the conditionalities and the outcomes of the Programme for every sector:

27

Table 3. Conditionalities and outcomes

Sector Education Conditionalities For children between 6 and 14 years who have not completed primary school: Attendance of 85% on average in educational activities that take place in the school. To decrease the dropout rate To increase the coverage of primary education To decrease the cases of child labour. Health Participation beneficiaries between training). Identity Participation in the programme Mi Nombre (My Name) of all those families who have children without birth certificates and / or more than 18 years without a national identification cards. Source: (Juntos, 2009) 6 in who months a have and nutritional children 3 years And to increase institutional delivery. Identity for parent and birth To reduce child malnutrition, maternal To rate. Outcomes increase the attendance

programme (PACFO) of all those

infant

mortality,

mortality and anaemia.

(receiving slurry and participation in

certificates for children.

3.8. Organisational arrangements for implementation These arrangements seek to involve key sector sectors in the decision-making process, increase transparency and avoid political interference. The Presidency of the Council of Ministers - PCM is responsible for monitoring the programme. The action plan is monitored and evaluated by the Board of Directors headed by a President and comprising the Ministers of Education, Health, Women and Social Development, and Economy and Finance, representatives of trade unions and civil society. Juntos has the status of an executive agency, has its own budget and is responsible for the cash transfer to the final beneficiaries. The Chief Executive manages the day-to-day operations. The supply of services is the mandate of other organisations which work in partnership with Juntos. For ensuring social monitoring

28

and transparency, an ad-hoc supervisory body has been adopted, comprising representatives of the Church, the private sector, regional and local governments, and the Roundtable for the Fight against Poverty. Details about the coordination and linkages with other stakeholders in the task network are provided in the following sections.

3.8.1. The Primary Organisations The programme itself and the social ministries (Education, Health, Women and Social Development) are among the primary organisations which play the central role in completing the tasks. Juntos transfers an important part of their budgetary resources to them in order to improve and expand the supply of services and reach the selected families in the targeted areas. This is in fact an innovative element compared to similar experiences across Latin America because the rationale behind this strategy is that if a programme aims to improve human capital among the poor, this will be achieved only if there is enough supply of health and education services, and not merely by a cash transfer (Francke and Mendoza, 2006: 399).

3.8.2. The Secondary Organisations Additionally, Juntos coordinates with secondary organisations, which are critical to the activities carried out by the primary organisations. Those agencies have the following mandates: The Ministry of Economy and Finance (MEF), is in charge of the budget disbursement for Juntos and other sectors, and plays a decisive role in the Board of Directors. The National Bank (Banco de la Nacin), is the entity in charge of the opening of bank accounts and carrying out the payments to the final beneficiaries in a monthly basis. This Bank has the most extensive networks of agencies or branches. The National Food Assistance Programme (Programa Nacional de Asistencia Alimentaria PRONAA), provides training and guidance to the mothers for preparing nutritive food for children between six months and three years old. The National Campaign for the Right to a Name and Identity ("My Name") is an initiative of the Ministry of Women and Social Development in coordination with the RENIEC to regularise the legal status of minors and adults who are not registered.

29

The National Agency for Identification and Civil Status (Registro Nacional de Identificacion y Estado Civil - RENIEC), supports the identification and registration of beneficiaries, provides identification cards to those who are undocumented.

The National Institute of Statistics and Informatics (INEI), participates in the cycle of collecting data from households and analysing it in order to select potential beneficiaries.

The Programme of Food Supplements for Groups at Highest Risk (Programa de Suplemento Alimentario para Grupos de Alto Riesgo - PACFO), aims to prevent malnutrition in children between six months and three years old.

The Comprehensive Health Insurance (Seguro Integral de Salud SIS), is a Programme of the Ministry of Health which aims to provide health coverage to lower income sectors, and is in charge of immunizations, vitamin supplements, health checks, prenatal and postnatal controls.

The National Programme of Glass of Milk, aimed at improving food and nutritional levels of vulnerable groups such as children, pregnant and nursing mothers.

The Fund for Cooperation and Social Development (Fondo de Cooperacion y Desarrollo Social - FONCODES), aims to develop social and productive projects to improve the living conditions of the poorest populations.

3.8.3. The Supporting Organisations The following are among the supporting organisations which supply complementary services in order to sustain the tasks: Regional Governments. In the targeted areas these are supposed to coordinate the effort of Juntos, since it has de-concentrated branches in the regions where the Regional Government has as its mandate the coordination of the social programmes and policies. Local Governments. One of the roles of local governments is to coordinate the actions within their territory. But generally speaking these just let the programme be implemented. Governors. As representatives of the President of the Republic at the local level, these support the programme especially at the outset. During the implementation these oversee the programme for assuring its integrity.

30

Chapter Four: Implementation of Juntos and Capacity Issues

This chapter will analyse the implementation of Juntos from August 2005 up to July 2009, using empirical evidence for each dimension of capacity presented in chapter two. 4.1. The action environment In the last few years, the broad environment, i.e. the economic, political and social conditions of the country, has been favourable. Juntos has been created in the context of an unprecedented economic growth, democratic consolidation and relative social stability. A logical assumption regarding the conditional cash transfer programmes is that those programmes are created during periods of economic crisis, namely recession and hyperinflation, where important sectors of the population suffer from a number of hardships such as unemployment, loss of savings and devaluation of assets, preventing them from meeting their needs, including the most basic ones (Francke and Espinoza, 2006). However, this was not the case for creating Juntos.

4.1.1. The economic context The Peruvian economy is experiencing the longest expansion phase in its history. Domestic demand, led by private consumption and private investment, is the most important source of growth. Another factor that is speeding up economic growth is the increasing international demand for minerals which has contributed to a balanced budget, but which is relatively dependent on commodities traded internationally. However, the risk of a growth contraction is a possibility due to the international market conditions.

31

According to official figures, the economic growth in the last decade has been sustainable in real terms7, as shown in the following table. Table 4. GDP growth, real annual variations (%) 1997 6.86 2002 5.02 2005 6.83 2006 7.74 2007 8.86 2008(*) 6.2

Source: Inter American Development Bank (2009). (*) Data from the Ministry of Economy and Finance.

This positive action environment allowed the government to have fiscal capacity to increase the budget of Juntos from US $ 36.3 in 2005 to US$ 235.1 in 2009, as shown in Graph 2 (evolution of Juntos Budget). Moreover, in the context of a developing country, social programmes like Juntos are often financed by international donors or by official loans. But in the case of Peru, international funding represents only a small proportion. For instance, in 2009 it represents 8.9% of the total budget. The main donors are multilateral agencies such as the United Nations Development Programme, the Inter American Development Bank, and the World Bank. The first one also provides technical assistance regarding targeting, monitoring, evaluation, and training to the personnel.

4.1.2. The political context In the political arena, there was a process of democratic consolidation after the period 1992-2000, which started with a constitutional crisis the 5th of April 1992. The presidential coup dtat led by Alberto Fujimori closed the National Congress, suspended the Constitution of 1979, and enacted another Constitution in 1993, among other actions. His government remained as a dictatorship until September 2000 when he resigned in the third period of his presidency amidst the most notorious political scandal of the last years. From 2001 onwards, there have been political stability, free elections, open competition, and attempts to reform the State. Such efforts have been translated into a decentralisation process, citizen participation, and open budget initiatives, aimed at making the government more responsive to citizen demands. This broad context allowed the programme to have

Complementary, the inflation rate was almost controlled. It fluctuated from 1.1% in 2006, 2.5% in 2007 and 2.0% in 2008 (MEF, 2009).

32

openness and transparency in the financial management and power sharing in the governance structure of the organisation.

4.1.3. The social context In the social aspect, the context of poverty and extreme poverty have been the driving forces for the establishment of a cash transfer programme intended to contribute to social inclusion and poverty reduction. However there have been recurrent social conflicts, especially in the regions, away from the capital city. In December 2006 the Ombudsman reported thirteen ongoing conflicts nationwide; in December 2007, this figure rose to twenty-six and to 134 in December 2008. (Defensoria del Pueblo [Ombudsman], 2009). Most of these conflicts involved opposition to new mining project concessions and conflicts at local level between communities and municipalities. After the revision of the minutes of the Board of Directors, no evidence was found that the social conflicts affected the performance of Juntos, however there were minor problems, such as delays, in the scheduled activities at local level. To sum up the issues around the action environment, the contextual conditions did not constrain the capacity of this new organisation in charge of the most important policies of the last two governments. On the contrary, it allowed Juntos to have sufficient room to manoeuvre. The economic situation permitted it to have the start up budget which increased in the following years, as shown above. In the social aspect, notwithstanding the conflicts, there were no serious threats to democracy and social stability, such as the interruption of the government due to coups d'tat. Most importantly, the administration of President Alan Garcia, from July 2006 onwards, has continued and enhanced Juntos as a flagship programme for overcoming poverty and attaining the Millennium Development Goals.

4.2. Institutional context of the public sector Juntos as a public sector agency is governed by rules and regulations; as a result its behaviour is shaped by the existing legal and institutional framework. Particular relevance has the budget cycle and the procurement and acquisition systems.

33

4.2.1. The budget cycle in the public sector The budget cycle for every State agency involves many decisions, procedures, bargaining and negotiation. The rules of the game about the budgetary process prescribe that the cycle is as follows: Table 5. Phases of the budget process
The previous fiscal year Programming -Expenditure forecast. -Outlining of the agency priorities and objectives. Formulation -Preparation of the budget itself considering the agencys priorities objectives. -It considers the budget categories, classification, goals and the respective funding sources. The first semester. The second semester. Approval -The Congress enacts the Law of Public Sector Budget. -Juntos budget is included within the Presidency of the Council of Ministers PCM. December. From the 1 of January until the 31 of December. Source: General Law of National Budget System
st st

The fiscal year Execution -Throughout the fiscal year the agency carries out the activities. -It may include a period of adjustment until the 31 March. Audit -Financial statement or
performance

The next fiscal year Evaluation -In order to assess progress with regard to established goals. -This is the input for the next budget process.

audits. -If there are findings, they are reported to the Congress or the Judiciary.

Throughout the fiscal year, or afterwards.

When the execution has finished.

The Presidency of the Council of Ministers - PCM goes through this process, but Juntos, as an agency embedded within this public body, does not follow this cycle. Instead, Juntos has to follow the procedures and red tape inside the PCM. The process for getting the resources is bottom-up in the first part: In theory, the sectors have to submit a proposal of activities for boosting the availability of health

34

and education services for the targeted population; then the Board of Directors has to approve the blueprint of the activities and budget for the next fiscal year, and finally the PCM consolidates this information for sending it to the Ministry of Economy and Finance - MEF. These steps correspond to the stage of programming and formulation, which have to be carried out the previous year. After that, the Congress enacts the whole public sector budget. The next steps are top-down because the MEF transfers the resources directly to the executing unit which is Juntos, and then this agency transfers these resources to every sector (Health, Education, Women and Social Development8) for funding the supply of public services which are sine qua non for achieving the programmes objectives. In the execution stage every sector has to follow the process of public procurement for purchasing the good and contracting the services. However, in practice, the budget cycle does not follow the prescription. To have an idea, the next table attempts to capture the dimension of the delay in the budget transference to the sectors: Table 6. The process of budget transference to sectors, 2005-2007
Events Discussion and approval of the Institutional Operating 9 Plan / Budget Transference from the MEF to Juntos Budget availability for the sectors 2005 31 August
10

2006 16 March
11

2007 23 April
12

28 December 27 January 2006

24 July 27 October

June According to the minutes it was due by October or November Unavailable information

Budget execution

February 2006 November 2006 onwards onwards Source: Juntos Programme, Board of Directors (2007: 31).

In 2007, Juntos transferred resources to the National Agency for Identification and Civil Status - RENIEC, which provides identity cards. 9 This document is important because it states the activities for the fiscal year. The budget is the financial dimension of that plan. The budget is the instrument which allows organizations to achieve their objectives and targets contained in their Institutional Operating Plan - IOP. Article 8 of the General Law of National Budget System (Congress of the Republic, 2004: 5). 10 Minutes of the meeting 31 August 2005. 11 Minutes of the meeting 16 March 2006. 12 Minutes of the meeting 23 April 2007.

35

Within Juntos, the budget decision-making process suffers delays because key documents such as the Institutional Operating Plan and the Institutional Budget, which contain the activities, goals and the resources needed by the Programme, are discussed by the Board of Directors around March or April of the same fiscal year, when these documents should be discussed the year before. When these documents are sent to the PCM, the MEF is allowed to disburse the resources, and Juntos has to transfer these resources to the sectors.

The Chief Executive of the Programme acknowledged that in practice it appeared that the 2005 budget had been used in 2006, and the resources of 2006 had been used in 2007 (Juntos Programme, Board of Directors (2007: 31). No clear explanation has been found for this delay in the budget cycle. The minutes of the meetings reveal only that there were discussions about the effects generated by this delay. However, it is clear that Juntos as a new Programme was facing what can be named as inefficiency of the transition. It results in a not satisfactory, not organised, or not skilled performance which lasts the first stage or period when an organisation starts working or undertakes changes.

The consequence was the low level of budget execution, or low absorption capacity in these sectors which affects the expected outputs such as teachers, nurses and general practitioners adequately trained, text books distributed, schools and clinics built, drugs and vaccines ready to be used, etc. 13 As shown in the next table education is the sector with poor performance (36.7% of budget execution), followed by women and social development (59.6%). The health sector stands out as a good performer sector with almost all the budget executed (96.7%).

13

The Health sector, according to the information had 96.7% of budget execution; however that was not the case in 2005, 2006 and 2007, when absorption capacity was a serious problem for every sector in the task network.

36

Table 7. Budget transference to sectors and level of execution

Sectors Budget transference US$ m 2005 2006 2007 3.9 4.0 2.0 0.0 9.9 9.0 9.0 9.0 0.0 27.0 6.3 19.2 6.1 3.2 34.8 Total transference to sectors 19.2 32.2 17.1 3.2 71.7 Total Executed Level of execution (%) 36.7 96.7 59.6 78.6 67.9 Remaining balance to be executed (*) 12.2 1.1 6.9 0.7 20.9

Education Health Women and Social Development RENIEC Total (*) Until May 2009.

7.0 31.1 10.2 2.5 50.8

Source: Farfan, H. (personal communication), (10 September 2009).

However it is worthwhile considering the opinion of the MEFs representative with regard to this problem: He remarked that not being able to spend with the need speed, having available resources to improve the provision of public services, is a serious concern. But the timing of the transference is something to take into account for understanding this problem. For example, in 2005 the transfer took place a few days before the end of the fiscal year. So, try to blame the ministries as inefficient would be unfair because there are other factors beyond the control of the sectors. The situation has improved somewhat, now (2007) the transference is taking around the end of the first semester allowing the sectors to have from 5 to 7 months to execute the budget, however it would be convenient to have 12 months for a proper budget expenditure (Juntos Programme, Board of Directors, 2007: 10). The next graph shows the overall result of budget execution per year, including the budget for the subsidies to families and the transfers to the sectors. A report elaborated by the National Directorate of Public Budget - DNPP, a specialised body of the Ministry of Economy and Finance, concluded that from 2005 to 2008, the level of execution was approximately 80% of the budget (DNPP, 2009).

37

Graph 4. Overall level of budget execution of Juntos, including sectoral expenditure

Source: Juntos and MEF Economic transparency. Adapted from DNPP (2009).

The same report also concluded that in 2006, the problem of low level of budget execution (54.2%) was mainly explained by the low level of expenditure in the budget earmarked for the transfer of US$ 30 a month to households i.e. the cash transfer. From out of US$ 42 million only US$ 24.5 million was disbursed (DNPP, 2009: 1). The cause of this problem is analysed in section 3.3 because it is related to the failure of the activities carried out by one organisation within the task network, which is the INEI. However, from 2007 onwards, no evidence was found regarding the low level of expenditure in the budget for subsidies (cash transfer). In an attempt to resolve this problem, the Board of Directors was able to manage to introduce two institutional arrangements: from 2008, the MEF is transferring the budget directly to the sectors avoiding unnecessary steps in the whole process; and the sectors are allowed to spend the remaining balance in a timeframe beyond the fiscal year, which prevents the sectors returning resources to the treasury. For that reason, so far the budget of 2006 and 2007 is being spent in 2009.

38

4.2.2. The procurement and acquisition systems In addition to the delays in the budget cycle, there is evidence that the State procurement system slows down the execution of the expenditure. According to the Assessment Report of the Country Procurement System, developed by the World Bank and the IADB in late 2005, "the general perception, supported by empirical evidence is that the persistent weakness of the procurement system is the product, among other things, of complex rules for budget planning and execution, and deficient logistics which cause delay in the service delivery" (cited in Abusada, 2008: 12-13). The empirical evidence provided by the study is that the time for procurement of medical supplies from the approval process until the delivery takes 450 days. For instance, when the budget was transferred to the Ministry of Education, this agency was not able to absorb such amount of resources. The representative of the Ministry of Education informed the Board of Directors of Juntos, that in 2006 the level of budget execution was low because two major activities such as the purchase of educational materials (textbooks, basically) and teachers training received 78% of the total budget. Such activities showed the lowest level of performance because of the amount of the budget (over US$ 150,000) which necessarily has to involve public tenders which take on average five to six months for the award and the execution itself (Juntos Programme, Board of Directors, 2006: 2). A study carried out by Ramon et al. suggests that, in the sample of seven districts visited 14 , poor infrastructure and lack of teachers and teaching materials is still evident, and the transference to the Ministry of Education, has not been translated in an observable improvement in the quality of education (2009: 39). Abusada, also identifies the excessive formalism, rules and tight control exercised by the Comptroller General of the Republic which in recent years has gone beyond controlling almost all the procedures and questioning the actions of many agencies: this has resulted in a high level of inaction and lack of initiative on the staff of the government, fearing that their decisions may be sanctioned by the Comptroller (2008: 12). To illustrate this constraint, in the same meeting of the Board of Directors,
14

Umari and Molino, in the province of Pachitea, region of Hunuco; Yauli and Acoria, province of Huancavelica, region of Huancavelica; San Pedro de Cachora and Huanipaca, province of Abancay, and Curpahuasi, province of Grau, region of Apurmac.

39

it has been reported that "the level of budget implementation for 2006 was 0.24% (as of that date) because the budget has been enabled for execution in the third week of October 2006, and given the time the public procurement takes for awarding the public contracts (minimum five months), the decision was not to take risk by scheduling the execution of new activities, since in two months remaining for finishing the fiscal year it would have been impossible to successfully execute the budget (Juntos Programme, Board of Directors, 2006: 2). To attempt to carry out these activities, bypassing the rules and regulations may imply administrative or criminal sanctions for the individual who made the decision. To conclude, the result is that the budget is not being spent efficiently, the problems remain and therefore the demand is not being attended properly, raising concerns about the achievement of the Programmes objectives. These findings about the education sector are representative and reveal what happens in other sectors such as health, women and social development. These also show the reality about the effectiveness and efficiency of public expenditure which ultimately is the States ability to achieve the policy objectives and the way public resources are used.

4.3. Task network Traditionally, poverty has been tackled using a one-dimensional approach, or with a multidimensional but overlapping strategies. For that reason in the past decade there have been a plethora of social programmes in Peru aiming to reduce poverty, but in most of the cases they were unsuccessful. In this context Juntos is an innovative approach for integrating different interventions and achieve both poverty reduction and human development: the CCT programmes sometimes are catalysts of such a move, and sometimes are forerunners in a larger explicit strategy to improve integration. That move toward coordination or integration has two facetsthe increased coordination of actors and the integration of benefits (Fiszbein et al. 2009: 97). Therefore, for achieving the goals, the programme emphasises horizontal interlinkages with other partners, especially at the national level, and vertical coordination with either de-concentrated or decentralised agencies at regional and local levels. However, the main constraint in the task network is that implementing the programme is not the solely responsibility of Juntos. In fact there are other agencies involved directly or indirectly, for instance, the different ministries, the sub-national governments, and so on. Hogwood and Gunn, remind us that a perfect

40

implementation requires that there is a single implementing agency which need not to depend on other agencies for success, or if other agencies must be involved, that the dependency relationships are minimal in number and importance (1984: 202). In this case, the nature of the intervention allows Juntos to have an extended dependency relationship. This being one of the strengths of the programme, ultimately this relationship, however, becomes a constraint for the programme itself due to the weaknesses of these organisations in the task network. To date, however, the social ministries are struggling to use the additional resources effectively to meet gaps in supply in areas where Juntos operates. The coordination and integration is a positive feature of the programme, but the lack of absorptive capacity is generating serious difficulties which affect the overall impact of the programme (Banco Mundial, 2007: 38-39). In December 2005, when the absorption capacity was identified, the Board of Directors, decided to set up a task force or short term committee in order to improve the supply of services. Its members, with multiple skills and expertise, were brought together to build linkages among the social sectors (Juntos Programme, Board of Directors, 2005). However, from the minutes it may be concluded that this task force could not accomplish its mandate. At the regional level similar committees have been created, but they lacked effectiveness in the first years, and to date they do not operate any more. Also, another attempt to solve this problem was to delegate to local governments the execution of activities in the field of education, health and nutrition. Transfer of budget from Juntos to local governments and transfer of management responsibilities were considered in the proposal. The institutional arrangements for this endeavour included agreements between the parties containing deliverables, targets, and procedures. However, this proposal has not gone beyond the blueprint stage because, according to the minutes of the meeting, it lacked the conditions of feasibility such as local government capacity for service delivery, standardised administrative and operational procedures, and grassroots organisations able to oversee the implementation process (Juntos Programme, Board of Directors, 2006a). Good examples of the problems in coordination and networking are the cases of the social sectors and the INEI, which are explained in the following paragraphs.

41

4.3.1. The Ministry of Education Education is one of the most important components for attaining the long term objectives such as human capacity development. Juntos intermediate goal is to significantly increase school attendance. Thus, the conditionality for beneficiaries is that children must attend at least 85% of the classes. Due to this conditionality, during the implementation of Juntos, there has been an increase in the demand for education, but at the same time there have been shortages in the supply of this service. In the rural areas, this sector tends to face problems such as the lack of teachers, infrastructure, school furniture, training materials, texts, and so on. For being responsive with the increased demand for education, the initial hypothesis of the policy-makers was to transfer economic resources to the sector so as to boost investment in key areas in order to provide the service assuring certain level of quality. In the light of the findings, it seems that the education sector did not foresee the increased demand and the increased resources which reveal problems of coordination between the sector and Juntos.

4.3.2. The Ministry of Health This sector is facing the same problem. Human resources seem to be still insufficient. The lack of qualified personnel to meet the growing demand is an indicator of the deficient coordinated planning in the context of the programme implementation. However this sector has tried to attend the new demand generated with personnel under the scheme of medical rural service Serum who generally do not have necessary experience and skills. This topic when discussed in the Board of Directors, raised questions about the quality of the services provided, and the labour conditions of those employees who have their workplace in the rural districts, far away from the cities. In this point, it is important to mention that the health sector earmarked resources for the personnel and other activities, which at the end were very useful for absorbing the resources transferred from Juntos. This decision, among others, has been influential for having a good performance among other organisations in the task network (Juntos Programme, Board of Directors, 2007a).

42

4.3.3. The Ministry of Women and Social Development This Ministry faces the challenge of coordinating with other organisations. For instance the campaign My Name, which provides identification documents to children and adults, has to be implemented with tight coordination with RENIEC, local governments and the health sector (clinics) in every district. From 2005 to 2006, this sector provides the resources, the identity card is provided by the RENIEC, and the records are provided by the local government and the clinics. However, this action generated overlapping functions with the RENIEC itself, for that reason from 2007 onwards, as can be seen in Table 6, the resources for this action are transferred directly to the RENIEC (Juntos Programme, Board of Directors, 2007a). In this regard, the Programme was able to take the correct decisions when problems of execution such as bottlenecks and overlapping functions were detected.

4.3.4. The National Institute of Statistics and Informatics - INEI In 2006 there was a low level of expenditure in the category of subsidies for the beneficiaries. Although this problem seems to concern to Juntos itself (since the responsibility of transferring the cash is an activity carried out by Juntos), the real causes are outside the programme. The problem of low expenditure was originated by failure in the secondary organisations, in this case the INEI. According to the minutes of the meeting held on the 7th of December 2005, the INEI failed to provide timely and accurately the data base containing the potential beneficiaries who fulfil the conditions for being included in the programme. This technical error had its effect in 2006s budget expenditure. It was not feasible to reach the goal in terms of number of beneficiaries due to poor work done by the INEI. Only 20,000 beneficiaries were identified when the target was 60,000. When the census was conducted, there were problems in identifying the beneficiaries, there were errors in the quality of information, and there were incomplete surveys (Juntos Programme, Board of Directors, 2005a: 4). Finally, Juntos had the essential guidelines for actions which should be executed. But Juntos, as a new and dynamic programme, is being shaped and reshaped constantly. For that reason recently, in 2008, a logical framework (see Appendix 5) and an Operational Manual have been issued which is important for overcoming loopholes and overlapping actions among the organisations which intervene in the stage of implementation. Juntos struggled since 2005 for having a Logical

43

Framework and a Base Line because of the complexity of the problems being addressed, the two pronged objectives (poverty reduction and human development), the lack of agreement about the main activities and indicators.

4.4. Organisation From the outset, Juntos has been designed taking into account the experience of identical programmes such as Mexico (Oportunidades), Brazil (Bolsa familia), Colombia (Familias en Accion), Chile (Puente-Chile Solidario) and Costa Rica (Superemonos). External organisations such as the UNDP and the World Bank have played a supportive role in the revision and analysis of experiences of conditional cash transfer programmes. Consequently Juntos sought to avoid errors and shortcomings in similar experiences, and to highlight and promote the strengths already identified in previous cases (Francke and Mendoza, 2006: 397). Oportunidades of Mexico stands out particularly because of the existence of partnership with Juntos, which allows permanent cooperation and exchange of experiences. So far, senior managers and specialists have visited Mexico to see the experience in the field and gather information relevant to the implementation of Juntos. With the Brazilian programme there is also an agreement which allows interorganisational learning and cooperation.

4.4.1. The governance structure Juntos is an agency with a structure which aims to have capacity for cross-sectoral coordination and cooperation, vertical coherence or unity of command, and to some extent centralised and decentralised functions. Therefore the governance structure of the programme has three main components: i) the Board of Directors, ii) the Executive, and iii) the Transparency and Oversight Committee. The next chart illustrates the governance structure highlighting the most important bodies.

44

Chart 1. Governance structure

Board of Directors President Chief Executive The Transparency and Oversight Committee Local Committees of Transparency

Manager Legal Advisory Deputy Chief Executive Administration

Manager Planning and Budgeting

Technology and Information

Manager Coordination and sectoral services

Manager Operations, affiliations & liquidations

Manager Monitoring and Evaluation

Manager Regional Coordination

Manager Promotion and communication

Regional Coordinators Regional Coordinators Source: (Juntos, 2009)

4.4.2. The Board of Directors This is the governing body of the Agency. Its functions are to establish policies, strategies and objectives, to review the overall performance of the organisation and to oversee the financial issues during its monthly basis meetings. One noteworthy element is that there is a power sharing element between the State and the civil society.15 The Board of Directors includes key stakeholders from civil society who have the same power as the State representatives, as can be seen in the next table.
15

In 2001, the transitional government of Valentin Paniagua established the National Roundtable for the Fight against Poverty, which is a multi-stakeholder forum with actors from the State, the civil society and the private sector, in order to promote and facilitate dialogue and participation in the formulation and implementation of poverty reduction policies. This model of participation and decision-making is being applied by Juntos in the Board of Directors. More information at: www.mesadeconcertacion.org.pe.

45

This is something that differentiates Juntos from other social programmes where the decision-making process remains as a monopoly of the State, with the member of civil society reduced to passive witnesses (Francke and Mendoza, 2006: 398; Juntos: 2009). Table 8. Members of the Board of Directors
President: 1. Representative of the President of the Republic Members: State 2. Minister of Education 3. Minister of Health 4. Minister of Women and Social Development 5. Minister of Economy and Finance Members 1. Representative of the National Confederation of Private Business Institutions [Confederacion Nacional de Institutiones Empresariales Privadas CONFIEP] 2. Representative of the National Conference on Social Development [Conferencia Nacional sobre Desarrollo Social CONADES] 3. Representative of the General Confederation of Workers of Peru [Confederacin General de Trabajadores del Per CGTP] 4. Representative of the Churches: The Catholic Church represented by the Non-governmental Organisation Caritas Source: (Juntos, 2009)

Civil Society

It is worthwhile mentioning that the current structure, and more specifically, the composition of the Board of Directors, has been labelled by the Chief Executive and the Monitoring and Evaluation Manager, in August 2008, as complex because of its multi-stakeholder composition: the Board of Directors composed of a President, representatives of State and civil society lead to a difficult coordination process (Juntos Programme, Board of Directors, 2008: 11). However this may be seen as a natural consequence of an organisation which interacts and coordinates with other stakeholders. The acknowledgment of this complexity, made in the Institutional Management Report (January-July 2008), is also a call for a clear definition of

46

mandates, roles and functions. However, the Board of Directors did not agree with this statement and asked for its removal from the official document (Idem, 2008). However, the composition of the Board of Directors represented and asset for the programme. According to the meetings held from 2005, until 2009, the civil society representatives were the ones who participated actively in the meetings, especially in the outset when the State representatives only sent deputy representatives or they missed meetings. Proposals and participation from both sides were interesting, but those from the civil society were particularly interesting, as explained below: Webpage of the programme displaying key information for transparency and accountability (23 October, 2005). Modification of the base-lines terms of reference, for making its indicators more representative of the programmes objectives (11 November, 2005). Concerns about problems in the supply of services (7 December, 2005). Evaluation of the candidates for the position of Chief Executive (28 February, 2007; and 18 June 2008). Participation in the task force for improving the supply of public services (20 June 2007) Streamlining the logical framework (throughout 2007, 2008 and 2009)

Representatives with experience in social programmes management (CARITAS and CONADES) had outstanding participation and technical proposals regarding the supply of services, the base-line, and the logical framework. CONFIEPs delegates was important for particular issues related to their background, for instance for allowing the programme to have partnership with private companies and shape the proposal of income generation for beneficiaries. CGTPs representative was mostly interested in issues around transparency and political independence of the programme (information from the minutes, available from: www.juntos.gob.pe).

4.4.3.The Executive This is headed by the Chief Executive, and depends on the Presidency of the Council of Ministers PCM. This is the body that deals with the day-to-day activities for accomplishing the mandate. Currently, Juntos has a central agency in Lima and has deconcentrated offices in 14 regions.

47

As mentioned before, Juntos is a fairly centralised organisation, since the key decisions are taken at the centre; however these decisions at the top level take into consideration the flow of information from below. The danger of having a decentralised system would be the potential inconsistency of the decisions made at lower level, having differentiated strategy for tackling the problem, and scope for discretion which may increase the possibility of corruption or rent-seeking. However the deconcentrated structure seems to be advantageous since the activities are performed coherently under the direction of the centre. 4.4.4.The Transparency and Oversight Committee Juntos has a supervisory body composed by member from civil society and the State. The Catholic and Evangelical Churches play a major role. This Committee is devoted to monitoring the proper functioning of the programme, so as to avoid a recurrent problem of social programmes, such as corruption, mismanagement, political interference, problems of targeting, etc. This body has 14 regional coordinators and local committees in almost every targeted district. From that level the problems, if any, could be raised at the regional and national level. At the national level, as it can be seen in the table below, four members out of six are from the civil society, with the exception of representatives of the local and regional governments. Table 9. Members of the Transparency and Oversight National Committee
President: 1. Representative of the President: former Archbishop Members: Civil Society 2. Two representatives of the churches: 2 priests representing the National Interfaith Committee [Comite Interconfesional del Peru] and the National Evangelical Council [Concilio Nacional Evangelico] 3. Representative of the private sector 4. Representative of the Roundtable for the Fight against Poverty [Mesa de Concertacion para la Lucha Contra la Pobreza] Members: State 1. Representative of the Regional Governments 2. Representative of the Local Governments Source: (Juntos, 2009)

48

Furthermore, it is important to mention that openness, transparency and accountability are relevant features of Juntos. The webpage www.juntos.gob.pe contains accessible information such as the minutes of the Board of Directors meetings, the financial statements, the wages of the staff and personnel, the indicators of coverage, list of beneficiaries, among others. In terms of organisation and governance structure, Juntos stands out among other programmes. The power sharing in the Board of Directors allows the programme to have voices from the civil society which contributed to the shape the programme and make it more transparent and accountable. The Transparency and Oversight Committee facilitated the programme to have report from the grassroots level about problems of implementation such as leakages, political interference at local level, shortage of public services provision, overlapping functions; and this Committee participated in the selection of the personnel in the deconcentrated agencies.

4.5.Human resources This capacity dimension is very important when implementation is seen as a process highly affected by actions carried out by the employees at different levels.

4.5.1. The contract scheme All the programme employees are within the scheme of Contratacion Administrativa de Servicios CAS, which differs greatly from the situation of permanent workers. Under the CAS scheme, personnel are hired to perform specialised services, with a pre-defined outcome. This system is suitable for hiring consultants, but not for permanent personnel. The disadvantages of the mushrooming of employees under this category are that they do not enjoy the social benefits and the stability, which are basic conditions for having highly motivated human resources. Under the CAS scheme employees have to renew their contracts quarterly or every six months. These issues have been touched on in the meetings of the Board of Directors when the reform of the programme and the issues around human resources were discussed, but no solution was found because this problem is related to the institutional settings which govern the public sector (2009a: 3; 2009b: 4). According the law on contracts in the public sector, Juntos cannot have permanent employees since the State cannot increase its payroll due to fiscal discipline policies. As it will

49

be explained later, the other organisations of the task network do not confront this problem.

4.5.2. Promoters lack of neutrality for monitoring compliance Juntos is implemented by decisions taken at the top level (Board of Directors) or by the different decision makers in the headquarters in Lima, the capital city. This management in a centralised fashion does not pay enough attention to the quality of the actions carried out at the lower level of the hierarchy, for instance in the poorest and isolated districts targeted by Juntos. The promoters are the employees who depend directly on the programme, they can be hired and fired by the administrative authority, therefore they are accountable to Juntos itself and their performance can be measured. They are in charge of one district or specific areas of it. The promoters monthly salary is US$ 500 and their contracts are renewed every three months, they do not have health insurance, only one of accident. Only in exceptional cases-for example in case of having to travel to distant places to receive additional benefits, tickets or other travel expenses in other cases the programme gives them a motorcycle, otherwise, they must fend for themselves (Ramon et al, 2009: 14). Juntos objectives are achieved when the beneficiaries meet the conditionalities. Also, this allows the beneficiary to receive the subsidy. The promoter is the person who monitors the compliance. According to the programmes rules, when the recipient household fails to meet the conditionalities, the transfer of cash has to be suspended for up to three months. A study carried out by Garret et al, identified that a promoter may sometimes overlook a gap in compliance to allow the household to keep receiving the payment during the next 3-month period. Given what appears to be a fairly personal relationship between community residents and the promoter, and understanding how difficult it might be for a household to meet all the conditions in a particular month, one can appreciate how a promoter might excuse any misses in compliance (2009: 20). The promoter may do so in order to make sure the programme works well at community-level ! Clearly the promoter has an incentive to keep up the numbers of compliant households, in order to make the programme and her own efforts look good (Idem). The consequence of this practice is the overestimation of the compliance with the conditionalities. This generates a false sense of achievement of targets and it undermines the programme impact.

50

4.5.3.Front-line employees and their accountability It is argued that front-line or street level workers (say the teachers, the nurses, the general practitioners and the promoter who represents Juntos at these levels) play a major role for policy implementation. Howlett and Ramesh remark that studies conducted in bottom-up fashion have shown that the success or failure of many programmes often depends on the commitment and skills of the actors at the bottom directly involved in implementing programs (1995: 157). Some employees, whose actions contribute to achieve Juntos objectives, do not dependent on the programme itself. They are solely accountable to their respective sectors who are members of Juntos task network. The ministries of Health, Education, and Women and Social Development have a high proportion of workers permanently appointed, who generally are not well trained and their performance is not assessed; therefore productivity, efficiency and effectiveness are not concepts embedded in their mindsets. The control and incentives for them are different to the ones who are appointed for performing specific tasks and their level of productivity is assessed. Abusada et al. in a study on efficiency of the public expenditure, argue that most of the workers (82%) are permanent, corresponding to the State payroll. The principal feature of this group is the stability they enjoy, so it is difficult to remove them even though there might be valid reasons. Therefore, workers have no incentives or penalties tied to performance, as there is a flat wage policy and a system of almost unbreakable stability (2008: 12). 4.6. Capacity Constraints As mentioned in section 2.1., capacity is !the ability to perform appropriate tasks effectively, efficiently, and sustainably (Hilderbrand and Grindle 1997: 34). The following table is built considering that effectiveness is referred to the achievement of the intended results; efficiency is reached when the organisation works or operates quickly in a coordinated way; and sustainability is attained when the effects of the actions undertaken are able to continue over a period of time. According to the table, the institutional context of the public sector, and the task network have relative high capacity constraints, followed by human resources. The other dimensions, as seen, do not affect negatively the programmes performance.

51

Table 10. Ranking of Capacity Constraints

Capacity Dimensions Effectiveness The action environment The economic context The political context The social context 3 3 2 2.7 0 Constraints Efficiency 1 Sustainability 1 0.6 Total

Institutional context of the public sector The budget cycle in the public sector The procurement and acquisition systems Task network The Ministry of Education The Ministry of Health The Ministry of Women and Social Development The INEI

2.7

Organisation The governance structure The Board of Directors The Executive The Transparency and Oversight Committee Human resources The contract scheme Promoters lack of neutrality for monitoring compliance Front-line employees and their accountability

2.3

Indicators: High level of constraint: Moderate level of constraint: Low level of constraint: Absence of constraint 3 2 1 0

52

Chapter Five: Conclusions

The implementation of Juntos, revealed the differentiated influence of each dimension on the overall performance of the programme. In particular, the highest capacity constraints were related to the institutional context of the public sector, and the task network. Evidence suggested that the action environment did not hinder capacity; conversely the economic conditions allowed the government to have fiscal resources for funding the programme and to have an increasing budget. The political context was a key factor for the continuity of the programme by the recent administration and it offered opportunity for its openness. And the social conditions did not represent a serious limitation for Juntos. Concerning the institutional context of the public sector, the evidence points at this being the source of the main constraints. The low absorption capacity of the budget had its roots in the rules and regulations for budgeting and the procurement system in the public sector. The attainment of the objectives and fulfilling the mandate were endangered for delays in the disbursement of the budget and for the long process for purchasing goods and services. This constraint created the most serious problem faced by Juntos: the shortage of supply of public services. Under this condition, Juntos might be merely a cash transfer programme and not one which boosts human development. In the context of the public sector, generally reluctant to multi-stakeholder implementation approaches, the task network represented a challenge because Juntos required the intervention of other organisations for accomplishing its objectives. These organisations included, among others, the ministries of Education, Health, Women and Social Development and the Institute of Statistics and Informatics. Juntos struggled to control of the activities carried out by these public agencies. It appeared that the weak performance of the task networks organisations

53

affected the overall functioning of the programme; therefore it was another source of capacity constraint. Juntos seemed to be fairly effective transferring cash to the beneficiaries, which was one of the objectives, but the other objective, advancement in human development, required coordination activities with other public bodies which was a daunting task. On the topic of organisation, Juntos governance structure stood out due to its mixed composition in the Board of Directors with representatives of the key sectors involved in delivering services for achieving the programmes objectives, and because of the power-sharing feature with active and positive participation from the civil society organisations and the private sector. Despite these advantages, the organisations performance was restricted because of the action of other dimensions such as the human resources, the task network, and the institutional context of the public sector. However it was facilitated by the economic and political conditions, namely the action environment. With regard to human resources, the programme faced constraints in terms of having short-term contract employees and staff that did not enjoy the same social benefits as their peers in the public sector. Also, the lack of neutrality of the promoters for monitoring the compliance of conditionalities generated a false sense of achievement of targets. Furthermore, as natural consequence of the multistakeholder intervention, Juntos did not have influence on employees who belong to the organisations of the task network, and the majority of those employees benefited from having permanent status without incentives or penalties tied to performance. Finally, further research can be carried out in order to address the two major capacity constraints. First, it has been indicated that the supply-side weaknesses were due to the institutional context of the public sector. More specific research can be done about the bottlenecks in the existing normative framework, and the operational processes which are contributing to a less effective and inefficient state intervention. Second, how to achieve smooth inter-organisational coordination and collaborative work among the operating partners may be useful for shedding lights into the task network dimension. Further, how to generate a sense of ownership of Juntos objectives by the other implementing agencies may be an interesting area of study.

54

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Farfan, Hillman (personal communication), (10 September 2009). Re: Solicitud de Informacin sobre Programa Juntos. E-mail to Abel Canchari. Fiszbein, Ariel; et al. (2009) Conditional Cash Transfers Reducing Present and Future Poverty. Washington DC: World Bank. Francke, Pedro; and Mendoza, Armando (2006) Per: Programa Juntos Cohen, Ernesto; and Franco, Rolando (ed.) Transferencias con Responsabilidad: Una Mirada Latinoamericana. Mxico: Flacso. Garret, James, et al, (2009) Designing CCT programs to improve nutrition impact: principles, evidence and examples. United Nations Food and Agriculture Organization (FAO) Working Papers. Available from: http://www.rlc.fao.org/iniciativa/wps.htm [Accessed 30 September 2009] Grindle, Marilee (1997) The good Government Imperative In Grindle, Marilee (ed). Getting good government: capacity building in the public sectors of developing countries. Cambridge, MA: Harvard Institute for International Development, Harvard University. Hilderbrand, Mary; and Grindle, Marilee (1997) Building Sustainable Capacity in the Public Sector: What can be done? In Grindle, Marilee (ed). Getting good government: capacity building in the public sectors of developing countries. Cambridge, MA: Harvard Institute for International Development, Harvard University. Hoddinott, John; and Bassett, Lucy (2008) Conditional Cash Transfer Programs and Nutrition in Latin America: Assessment of Impacts and Strategies for Improvement, Washington D.C., International Food Policy Research Institute (IFPRI). Available from: http://www.rlc.fao.org/es/prioridades/seguridad/ingreso3/pdf/ifpri.pdf August 2009]. Hogwood, Brian; and Gunn, Lewis (1984) Policy analysis for the real world. New York: Oxford University Press. Howlett, Michael; and Ramesh, M. (1995) Studying public policy: policy cycles and policy subsystems. New York: Oxford University Press. INEI [Instituto Nacional de Estadstica e Informtica] (2009) Per en Cifras. Available from: http://www.inei.gob.pe/ [Accessed 10 August 2009]. Inter American Development Bank (2009) Latin American and Caribbean Macro Watch Country 2009]. Juntos (nd) Programa Nacional de Apoyo Directo a los ms Pobres Juntos. Power point presentation. Available from: www.impactalliance.org [Accessed 20 September 2009]. Juntos (2009) Official Webpage. Available at http://www.juntos.gob.pe [Accessed 09 July 2009]. Juntos Programme, Board of Directors (2005) Minutes of the Meeting 28 December, 2005. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 18 August 2009]. Table. Available from: http://www.iadb.org/res/lmw_countrytables.cfm?country=Peru [Accessed 18 August [Accessed 19

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. (2005a) Minutes of the Meeting 7 December, 2005. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 19 August 2009]. . (2006) Minutes of the Meeting 12 December, 2006. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 19 August 2009]. . (2006a) Minutes of the Meeting 13 November, 2006. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 19 September 2009]. . (2007) Minutes of the Meeting 27 August, 2007. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 19 September 2009]. . (2007) Minutes of the Meeting 23 April, 2007. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 19 September 2009]. . (2008) Minutes of the Meeting 28 August, 2008. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 10 August 2009]. . (2008a) Minutes of the Meeting 18 November, 2008. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 10 August 2009]. . (2009) Minutes of the Meeting 31 July, 2009. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 15 September 2009]. . (2009a) Minutes of the Meeting 12 February, 2009. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 15 August 2009]. . (2009b) Minutes of the Meeting 29 April, 2009. Lima: Juntos Programme. Available from: http://www.juntos.gob.pe/actasConsejo.php [Accessed 15 August 2009]. Larbi, George (1998) Implementing New Public Management reforms in Ghana: Institutional constraints and capacity issues. Cases from public health and water services. PhD Thesis submitted to the University of Birmingham, International Development Department. Lipsky, Michael (1980) Street-level Bureaucracy: The Dilemmas of Individuals in Public Service. New York: Russell Sage Foundation. MEF [Ministerio de Economa y Finanzas] (2007) Marco Macroeconmico Multianual 20082010 (Actualizado al mes de Agosto de 2007). Available from: http://www.mef.gob.pe/ESPEC/MMM2008_2010/MMM_2008_2010_Revisado.pdf [Accessed 10 July 2009]. . (2009) Marco Macroeconmico Multianual 2010-2012. Available from: http://www.mef.gob.pe/ESPEC/MMM2010_2012/MMM_2010_2012.pdf [Accessed 10 July 2009]. . (2009b) Transparencia Econmica (online). Available from: http://transparenciaeconomica.mef.gob.pe [Accessed 12 July 2009].

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Mueller, Dennis (2003) Public Chioce III. Cambridge : Cambridge University Press. Parsons, Wayne (1995) Public policy: An introduction to the theory and practice of policy analysis. Aldershot: Edward Elgar. PCM [Presidencia del Consejo de Ministros] Plan Nacional para la Superacin de la Pobreza 2004-2006. Decreto Supremo 064-2004-PCM. Available from: http://www.unfpa.org.pe/Legislacion/PDF/Plan-Nacional-Superacion-Pobreza.pdf [Accessed 11 July 2009]. PNUD [Programa de las Naciones Unidas para el Desarrollo] (2006) Informe sobre Desarrollo Humano Peru 2006 Hacia una Descentralizacin con Ciudadana. Lima: PNUD. Available from: http://www.pnud.org.pe/frmPubDetail.aspx?id=42 [Accessed 19 September 2009] Ramn, Ludwing; et al. (2009) Anlisis de la implementacin del Programa JUNTOS en las regiones de Apurmac, Huancavelica y Hunuco. Lima: CIES, Observatorio de la Salud. Son, Hyun (2008) Conditional Cash Transfer Programs. Manila: Asian Development Bank. UNDP (2009) Human Development Report 2009. Peru. The Human Development Index going beyond income. Available from: http://origin[Accessed Available 28 from: hdrstats.undp.org/en/countries/country_fact_sheets/cty_fs_PER.html September 2009] World Bank (2009) Key Development Data & Statistics. http://go.worldbank.org/8HKVHK4HP0 [Accessed 12 August 2009].

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Appendixes
Appendix 1. Dimensions of capacity

Source: Hilderbrand and Grindle, 1997: 36

59

Appendix 2. Basic information on selected programmes

Country Peru Juntos Mexico Oportunidades Brazil Bolsa Familia Jamaica Program of Advancement through Health and Education - PATH 2004 (2002) Paraguay * Tekopora/ ProPais II Colombia Familias Accion en

Year of the data (introduced)

2009 (2005)

2002 (1997)

2005 (2001)

Number of beneficiaries Average unit transfer (US$ PPP 2003/month) Annual Budget (US$) % of GDP Education benefits

2.3 Million (8.2% pop.) ** $30 total

4.2 million (20% pop.) $62 education $21 healthnutrition $ 2.6 billion 0.32 Education grant School materials Supply and quality strengthened Savings account for graduates Food grant Basic healthcare Nutrition and health education Nutrition supplements Improved supply nd

8.7 million (22% pop.) $64 total

63,000 (8% population) $27 education $27 healthnutrition $ 18.3 million 0.32 Education grant

2008 Tekopora (2005), ProPais II (2006) nd

2005 (2000)

340,000 (4.6 % pop) $53 education $31 healthnutrition $ 100 million 0.12 Education grant

$ 18-36

$ 235.1 million 0.06 *** Education grant School materials Supply and quality strengthened

$ 3.0 billion 0.36% Education and nutrition grant

$ 9.6 million 0.08% (2007) Education grant

Health and nutrition benefits

Other benefits

Health check-ups Basic healthcare Nutrition and health education Nutrition supplements Improved supply Participation in the My Name programme by families with children who lack birth certificates and/or are older than 18 years and have no identification card.

Health grant Health education

Vaccination. Health Check-ups. Health and Nutrition grant

Health and nutrition grant Nutrition and health education

nd

nd

nd

nd

60

Country

Peru Juntos

Mexico Oportunidades

Brazil Bolsa Familia

Jamaica Program of Advancement through Health and Education - PATH Bi-monthly Poor households with children 6-17

Paraguay * Tekopora/ ProPais II

Colombia Familias Accion en

Grant periodicity Target group for education grants

Monthly Poor households with children between 6 and 14 years who have not completed primary school Poor households Children between 6 months and 3 years old.

Bi-monthly Poor households with children 818 enrolled in primary and up to 20 years old in secondary school Poor households Nutrition supplements to pregnant and lactating women, children 4-24 months and malnourished children 2-5 years old

Monthly Extreme poor and poor households with children 6-15 years old

Bi-monthly Extremely poor families with children aged 014 and pregnant women. Rural areas only

Bi-monthly Poor households with children 7-17 enrolled in school (2nd to 11th grades)

Target groups for health and nutrition grants

Extreme poor households and poor households with children 015 years old, pregnant and lactating women

Poor households with children 0-5, pregnant and lactating women, people over 65, persons with disabilities, destitute adults under 65.

Poor households with children 0-6 not participating in other programs

Source: Adapted from de la Brire and Rawlings (2006). nd: No data. * Information taken from: http://go.worldbank.org/TVDSMZ23C0 ** Juntos (2009) Performance indicators. *** Banco Mundial (2007: 14) Data for 2006.

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Appendix 3. Social indicators of targeted regions Region Number of targeted districts Amazonas Ancash Apurimac Ayacucho Cajamarca Cusco Huancavelica Hunuco Junn La Libertad Loreto Pasco Piura Puno TOTAL
Source: Adapted from Juntos (nd) (*) Taken from PNUD (2006)

% of extreme poverty in the targeted districts (2005)

HDI in the whole region (2005) (*)

12 66 60 69 77 44 76 67 39 42 11 8 16 51 638

49.9 42.2 61.5 51.6 37.6 19.0 71.0 61.6 23.9 56.6 37.8 30.5 27.7 67.4 42.6

0.553 0.577 0.520 0.528 0.540 0.537 0.492 0.531 0.592 0.604 0.566 0.575 0.571 0.546 -

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Appendix 4. HDI in not-targeted regions Regions Lima y Callao Tacna Ica Moquegua Lambayeque Tumbes Madre de Dios Ucayali San Martn
Source: PNUD (2006)

HDI 2005 0.703 0.668 0.648 0.643 0.627 0.618 0.599 0.576 0.573

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Appendix 5. Matrix of the Logical Framework, 2008-2011

End Purpose Outputs To ensure the availability and access to a package of health services, nutrition and education according to the life cycle of the beneficiarie s, in coresponsibilit y with the sectors of the national regional and local government s. Main Activities To coordinate the intervention with other social programmes, regional and local governments within the framework of the National Strategy CRECER (Growing). To measure the gaps in supply of health and education services. To monitor the service provision (health and education) and to ensure its quality and timeliness. To create the alert system in conjunction with the Intersectoral Commission for Social Affairs (CIAS) on the supply capacity of health and education services. To promote the realisation of counselling and training workshops on nutrition. To affiliate the entire target population to the Comprehensive Health Insurance (SIS). To promote the implementation of healthy housing according to the regional customs.

To promote literacy among women beneficiaries through the Ministry of Education. To establish partnership with public and private organisations for financial and technical assistance for capacity development. Identify and incorporate households in extreme poverty. Make the institutional arrangements with RENIEC for the issuance of national IDs for To provide the target population. cash transfers To transfer the conditional economic incentives to households to the beneficiary households, through saving which meet accounts. their To train women beneficiaries through their responsibilities leaders in the fulfilment of their responsibilities. . To strengthen a system of individual monitoring for assuring the compliance of conditionalities related to health, nutrition and education. Source: Juntos Programme, Board of Directors. 2008a: 5) Minutes of the Meeting 18 November, 2008. The Board of Directors has only approved the end, purpose, outputs and main activities of the Logical Framework. In July 2009 there has been reduction in the list of main activities.

To contribute to the reduction of poverty and break the intergener ational transmissi on of extreme poverty

Building human capital in household s in extreme poverty by providing incentives for access and use of health services, nutrition, education and for improving the consumpti on capacity.

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