Pwojè Asistans Teknik pou Gouvènans Ekonomik

Document of The World Bank Report No: ICR00001374 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H1660) ON A GRANT IN THE AMOUNT OF US$ 2 MILLION EQUIVALENT TO THE THE REPUBLIC OF HAITI FOR AN ECONOMIC GOVERNANCE TECHNICAL ASSISTANCE PROJECT March 30, 2010 Poverty Reduction and Economic Management Haiti Country Management Unit (LCCHT) Latin America and the Caribbean Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective January 31, 2010) Currency Unit = Special Drawing Rights 1.55419 SDR = US$1 0.643421 US$ = SDR 1 FISCAL YEAR ABBREVIATIONS AND ACRONYMS Vice President: Pamela Cox Country Director: Yvonne M. Tsikata Sector Manager: Nick P. Manning Project Team Leader: Christine de Mariz Rozeira ICR Team Leader: Jenni Pajunen 1 ABBREVIATIONS AND ACRONYMS BRH Banque de la République d’Haïti (Central Bank of Haiti) CAS Country Assistance Strategy CEFOPAFOP Centre d’Education et de Perfectionnement des Agents de la Fonction Publique (Training Center for Public Administration) CMEP Conseil de Modernisation des Entreprises Publiques (Council for the Modernization of Public Enterprises) CNIMP Commission National Intérimaire des Marchés Publics CNMP Commission Nationale des Marchés Publics (National Procurement Commission) CPAR Country Procurement Assessment Report CSCCA Cour Supérieure des Comptes et du Contentieux Administratif (Supreme Audit Institution) CSO Civil Society Organization DGB Direction Général du Budget DSNCRP Document de Stratégie Nationale pour la Croissance et pour la Réduction de la Pauvreté (Growth and Poverty Reduction Strategy Paper) EGRO Economic Governance Reform Operation EGTAG Economic Governance Technical Assistance Grant EU European Union FM Financial Management GDP Gross Domestic Product GOH Government of Haiti ICF Interim Cooperation Framework ICR Implementation Completion Report IDA International Development Association IADB Inter-American Development Bank IFMS Integrated Financial Management System IMF International Monetary Fund IGF Inspection Générale des Finances (Inspectorate General of Finance) ISR Implementation Status Report LICUS Low Income Countries Under Stress MDG Millennium Development Goals MEF Ministry of Economy and Finance MINUSTAH UN Mission for the Stabilization of Haiti NGO Non-Governmental Organization OMRH Office de Management et des Ressources Humaines PIU Project Implementation Unit PEFA Public Expenditure and Financial Accountability PEMFAR Public Expenditure Management and Financial Accountability Review PRSP Poverty Reduction Strategy Paper ROSC Reports of Observance of Standards and Codes SYSDEP Système d’Informatisation des Dépenses (Expenditure Information System) SYSGEP Système de Gestion de l’Information sur les Programmes et Projets d’Investissement (Program and Project Investment Management Information System) TOR Terms of Reference TTL Task Team Leader 2 ULCC Unité de Lutte contre la Corruption (Anti-Corruption Unit) UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme VC Video Conference Haiti Economic Governance Technical Assistance Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design............................................... 3 2. Key Factors Affecting Implementation and Outcomes .............................................. 8 3. Assessment of Outcomes .......................................................................................... 13 4. Assessment of Risk to Development Outcome......................................................... 19 5. Assessment of Bank and Borrower Performance ..................................................... 21 6. Lessons Learned........................................................................................................ 23 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 25 Annex 1. Project Costs and Financing.......................................................................... 27 Annex 2. Outputs by Component.................................................................................. 28 Annex 3. Economic and Financial Analysis ................................................................. 31 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 32 Annex 5. Beneficiary Survey Results ........................................................................... 34 Annex 6. Stakeholder Workshop Report and Results................................................... 35 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR ..................... 36 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 38 Annex 9. List of Supporting Documents ...................................................................... 39 MAP i A. Basic Information Country: Haiti Project Name: Governance Technical Assistance Grant Project ID: P093936 L/C/TF Number(s): IDA - H1660 ICR Date: 03/31/2010 ICR Type: Core ICR Lending Instrument: TAL Borrower: THE REPUBLIC OF HAITI Original Total Commitment: XDR 1.4M Disbursed Amount: XDR 1.4M Revised Amount: XDR 1.4M Environmental Category: C Implementing Agencies: Ministry of Economy and Finance Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Da te Revised / Actual Date(s) Concept Review: 02/03/2005 Effectiveness: 12/19/2005 12/19/2005 Appraisal: 04/18/2005 Restructuring(s): Approval: 06/07/2005 Mid - term Review: 12/19/2006 06/19/2007 Closing: 12/31/2007 09/30/2009 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: High Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Rat ings Quality at Entry: Moderately Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Satisfactory ii C.3 Quality at En try and Implementation Performance Indicators Implementation Performance Indicators QAG Assessments (if any) Rating Potential Problem Project at any time (Yes/No): Yes Quality at Entry (QEA): None Problem Project at any time (Yes/No): No Quality of S upervision (QSA): None DO rating before Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 100 100 Theme Code (as % of total Ba nk financing) Administrative and civil service ref or m 24 15 Other accountability/anti - corruption 25 10 Other public sector governance 13 Participation and civic engagement 13 5 Public expenditure, financial management and procurement 25 70 E . Bank Staff Positions At ICR At Approval Vice President: Pamela Cox Pamela Cox Country Director: Yvonne M. Tsikata Caroline D. Ans tey Sector Manager: Nicholas Paul Manning Ronald E. Myers Project Team Leader: Christine de Mariz Rozeira Linn A. H ammergren ICR Team Leader: Jenni Amanda Pajunen ICR Primary Author: Jenni Amanda Pajunen F. Results Framework Analysis Project Development Objectives ( from Project Appraisal Document ) The objective of the Economic Governance Technical Assistance Grant (EGTAG) is to assist the GoH in strengthening its institutional capacity in the areas of budgetary planning and execution, investment and project planning, internal and external control, procurement, accountability, participatory monitoring, and reform constituency building. Specifically the EGTAG's development objectives are to: (i) improve the central iii ministry's ability to program, execute and track use of public resources and better link them to concrete development goals, ensure an adequate performance of the external, ex- post control function by the CSCCA, and help the CNMP grow into its role as overseer of procurement practices and make open, competitive procurement the rule rather than the exception; (ii) advance the development of a human resource management plan and system, especially as regards ensuring adequate capacity in the financial management system; (iii) advance the development of the ULCC as an effective check on corruption while also encouraging the greater involvement of civil society in its own operations and as a monitor of public sector reform; and (iv) ensure as part of the project management process, an adequate system for communicating information on the reform programs and mobilizing public support for their furtherance. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Comp letion or Target Years Indicator 1 : Indicator Name: Percentage of unprogrammed budget resources Value quantitative or Qualitative) 4% 2% 2% Target achieved. According to government estimates, the unprogrammed resources in budget year 2009-2010 are estimated to be 361 million gourds, while the total budget is 88.9 milliard gourds. The unprogrammed resources are 0.4% of the budget. Date achieved 11/01/2005 11/01/2005 11/01/2007 12/10/2009 Comments (incl. % achievement) Comments: (Source: Direction Generale du Budget) However, the Bank's FM specialist has noted that while the government has made a significant effort to capture all resources some such as those collected directly by some Ministries Indicator 2 : Indicator Name: Percentage of non-salary public expenditures going through comptes courants Value quantitative or 10% <10% Eliminate the use of comptes Achieved. Currently estimated iv Qualitative) courants at less than 3% of total nonsalary public expenditures. Date achieved 11/01/20 04 11/01/2005 11 /01/200 7 12/10/2009 Comments (incl. % achievement) Indicator 3 : Indicator Name: Percentage of external financing included in public budget Value quantitative or Qualitative) TBD 100% 100% Target achieved. All external financi ng is included in the budget. Date achieved 06/30/2005 11/01/2005 12/01/2007 12/10/2009 Comments (incl. % achievement) Comments: Source: Direction Generale du Bud ge t (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target V alues (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Number of comptables designated and trained Value (quantitative or Qualitative) 0 20 15 Achieved target exceeded: 39 have been designated trained and deconcentrated in different institutions Date achieved 06/30/2005 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) Indicator 2 : Number of auditors hired, trained, and doing audits for CSCCA (cumulative) Value (quantitative or Qualitative) 0 15 15 Achieved. 30 auditors from the CSCCA have been trained. As a result the backlog of audit reports (fiscal years 2003-2006) have been cleared. v Date achieved 06/30/2009 11/01/2005 12/07/2007 12/10/2009 Co mments (incl. % achievement) Indicator 3 : Percentage of noncompetitive procurements Value (quantitative or Qualitative) 35% 10% red uctio n 20% reduction Achieved 20.8 % of non competitive procurement (so more than 20% of reduction) for the 2006 - 2007 period: as per CNMP data out of the 192 bids approved 20.8% were non competitive.see commentsinPDO Date achieved 06/30/2005 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) Indicator 4 : Number of public employees in Human Res ource Unit record Value (quantitative or Qualitative) 40000 TBD 50000 in OHR record (transferred from MEF) Achieved. All public servants were included in the OMRH database. Further activities are planned to continue this HR process under EGTAG II Da te achieved 06/30/20 0 5 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) Indicator 5 : Development of plan for creation of permanent human resource office (Office for Management and Human Resources, OMRH) Value (quantitative or Qu alitative) No plan Approval of plan Approval of plan Achieved and related implementing activities ongoing. The OMRH wa s created by Decree of 05/17/05 and the Programme Cadre de la reforme de l' Etat 2007 - 2012 is being implemente d Date achieved 06/30/200 5 11/01/2005 12/07/2007 12/10/2009 vi Comments (incl. % achievement) Indicator 6 : Corruption cases identified by ULCC referred to judiciary for prosecution and follow - up Value (quantitative or Qualitative) 0 8 8 The Anti - Co rruption Unit (ULCC) t ransmitted 12 cased to the competent authorities (administrative and judicial) and has been following up . Date achieved 06/30/2005 11/01/2005 12/07/2007 06/22/2009 Comments (incl. % achievement) Indicator 7 : Number of reports produced by CSO mon itors and actions taken in response by agencies m onitored Value (quantitative or Qualitative) 0 4/4 4/4 Achieved; CSO produced 5 reports published on the EGRO I and are available at www.mefhaiti.gouv .ht/societe civile (last report published in June 2 006 and additional report to come Date achieved 06/30/2005 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) Indicator 8 : Coverage of donor economic governance activities in PCU data base Value (quantitative or Qualitative) No database Database listing all programs Database tracks program progress Not Achieved because not applicable; a draft data base was conceived by the PCU at the beginning of the project; however the PCU does not have the authority to get information on eco nomic vii governance . Date achieved 06/30/2005 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) Indicator 9 : Ability of the general public to identify elements of MEF's reform programs. Value (quantitative or Qualitative) TBD 25% of those surveyed can identify four elements 50% of those surveyed can identify four element s Partially Achieved through 2 comp. of the project: component 3 and 4 on civil society and communication which raise awareness of civil society on governance refo rm(no survey expected) Date achieved 06/30/2005 11/01/2005 12/07/2007 12/10/2009 Comments (incl. % achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 02/ 22/200 6 Satisfac tory Satisfactory 0.00 2 07/29/2006 Moderately Satisfactory Moderately Satisfactory 0.30 3 12/27/2006 Moderately Satisfactory Moderately Satisfactory 0.54 4 06/20/2007 Moderately Satisfactory Moderately Satisfactory 0.66 5 12/17/2007 Moderately Sat isfactory Mode rately Satisfactor y 0.86 6 06/23/2008 Moderately Satisfactory Moderately Satisfactory 1.19 7 12/11/2008 Satisfactory Satisfactory 1.68 8 06/25/2009 Satisfactory Satisfactory 2.00 9 07/29/2009 Satisfactory Satisfactory 2.00 10 12/21/ 2009 Satisfactory Satisfactory 2.05 H. Restructuring (if any) Not Applicable viii I. Disbursement Profile 3 1. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative) The Economic Governance Technical Assistance (EGTAG1) implementation completion mission was carried out in December 2009. The 7.0 Richter earthquake that hit Haiti on January 12, 2010 caused unimaginable human and material destruction and according to the first estimates affected 3.5 million people. This implementation completion review of EGTAG1 is based on the pre-earthquake scenario. 1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) 1. Haiti was and continues to be the poorest country in the Western Hemisphere and one of the most disadvantaged in the world. The causes of this situation are complex and long-standing. For the past twenty years, the country has struggled to emerge from a cycle of internal conflicts and natural disasters that devastated its economy, augmented levels of poverty, and temporarily provoked the withdrawal of external assistance to the government. 1 In March 2004, following the resignation of President Jean Bertrand Aristide and pending elections that were scheduled for 2005, a Transition Government was put in place and initiated a program aimed at increasing political and social stability and jump starting the economy. There had been positive indications about its commitment to fighting corruption, encouraging civil society participation, and managing public resources in a transparent and efficient manner by such concrete steps as the preparation of a 2005 budget consistent with rules set forth in a new Organic Law, restrictions on the number and value of comptes courants (unprogrammed funds given to ministries to finance unanticipated expenses), the creation of an anti- corruption unit and a central procurement entity, and efforts to develop policy and make appointments based on technical and non-partisan criteria. 2. Donors had indicated that they would resume support, but further progress was obstructed by a state apparatus that had suffered its own devastation over the prior two decades, and had a severe shortage of adequately qualified and motivated personnel. Those staff were working within inefficient organizational structures and with procedures that allowed widespread recourse to various informal mechanisms. The organizations rarely had the resources to do their jobs, and lacked the means of tracking the majority of expenditures. 3. At project appraisal, it was concluded that if the Transition Government and the elected government that followed were to make efficient use of their own and external resources, increasing, inter alia , the quantity and quality of service delivery, they would have to effect immediate improvements in the administrative structure and initiate a longer-term program of incremental capacity building. The most critical area was economic governance, understood to encompass public resource management (financial, human, and material); the values informing it (e.g. discipline, ethics, transparency, and accountability); and the mechanisms for enforcing sanctions and taking corrective actions when legally mandated norms are violated. Absent positive changes in all these areas, even the best intentioned administration would not be able to design and execute programs encouraging economic growth, respond to citizen needs, and build the public support required for its own survival. It also would not be able to provide the necessary coordination and oversight for donor programs or discourage donors’ past tendencies to undermine government norms by circumventing or ignoring them. 4. In the spring of 2004, the Transition Government led the donor community in putting together an Interim Cooperation Framework (ICF) 2 to guide future efforts. Because of its broad experience in the area, the World Bank, along with the IDB, accepted the Government of Haiti’s (GOH) invitation to collaborate in the design and implementation of the sections on economic governance. As experience in Haiti and elsewhere demonstrated, progress here was vital not only to 1 World Bank lending to Haiti was suspended between 1997 and 2003. Donors remaining in the country worked largely through NGOs or other nongovernmental channels. 2 Details are provided in the program documents of Economic Growth and Recovery Operation (EGRO) (approved on January 6, 2005) and in the Transition Support Strategy for Haiti. 4 the Bank’s own programs, but to those of the government and the entire community of donors. The task was enormous and required a combination of emergency short-term measures and a longer-term program tailored to the country’s considerable resource constraints. Consistent with this approach, the technical assistance grant focused on economic governance, as opposed to a broader public administration reform, a civil service program, or targeted attention to individual sector ministries where activities were proposed, because poor financial resources management lay at the heart of Haiti’s public sector weaknesses. The assumption was that if the government could develop a system, including the necessary personnel, to plan, direct, and track resource use, and to identify and control deviations, it would at least have the minimum essential tools to carry out its additional programs. The project proposal and the underlying assessment were the result of on-going dialogue with the government, a series of missions to identify and discuss needs, and prior diagnostic work by the Bank and other donor agencies focusing specifically on weaknesses in financial management, procurement, and overall public administration. 5. EGTAG1 was part of a broader program of institutional strengthening in Haiti. EGTAG1 was preceded by a LICUS Economic Governance Grant (FY05), which was the first emergency economic governance support operation after the Bank’s re-engagement. The LICUS grant was designed before IDA-financing became available to the country, but in practice the two projects were implemented largely in parallel. This incremental approach was designed to facilitate the Bank’s re-engagement and to focus on knowledge transfer for rebuilding project implementation capacity in the country. There are similarities, synergies and continuity in the design of the LICUS and EGTAG operations, which are explained in detail in chapter 1.5 of the original project document. However, LICUS was implemented directly by the Ministry of Finance, while a separate project implementation unit was created for the EGTAG1. Since 2004, IDA support for economic management and a governance reform program has included (i) a total of US$96.5 million of development policy loans under the three Economic Governance Reform Operations (EGROs); and (ii) two Economic Governance Technical Assistance Grants (EGTAG 1 and 2) amounting to US$4 million. In addition, a number of supporting analytical studies have been completed and the Bank portfolio in Haiti includes also sector investment operations such as an energy project to provide support for the electricity sector. The technical assistance grants complemented other donors’ support for Haiti’s economic reform program. 1.2 Original Project Development Objectives (PDO) and Key Indicators ( as approved ) 6. Project Development Objective : The objective of the Economic Governance Technical Assistance Grant (EGTAG1) was to assist the GoH in strengthening its institutional capacity in the areas of budgetary planning and execution, investment and project planning, internal and external control, procurement, accountability, participatory monitoring, and reform constituency building. The EGTAG1's development objectives were to: (i) improve the Ministry of Finance’s ability to program, execute and track use of public resources and better link them to concrete development goals, ensure an adequate performance of the external, ex-post control function by the Cour Supérieure des Comptes et du Contentieux Administratif (CSC/CA, Supreme Audit Institution), and help the Commission Nationale des Marchés Publics (CNMP, National Procurement Commission) to grow into its role as overseer of procurement practices and make open, competitive procurement the rule rather than the exception; (ii) advance the development of a human resource management plan and system, especially as regards ensuring adequate capacity in the financial management system; (iii) advance the development of the Unité de Lutte Contre la Corruption (ULCC, Anti-corruption Unit) as an effective check on corruption, while also encouraging the greater involvement of civil society in its own operations and as a monitor of public sector reform; and (iv) ensure, as part of the project management process, an adequate system for communicating information on the reform programs and mobilizing public support for their furtherance. 7. Indicators: The indicators to measure progress with the project development objective were defined as (i) Percentage of non-salary current public expenditures going through current accounts; (ii) Percentage of un-programmed budget resources (in autres interventions publiques ); and (iii) inclusion of external financing (disbursements and expenditures) in public budget. The other results indicators were: (iv) Number of accountants designated and trained in their functions; (v) Number of auditors hired, trained and carrying out audits; (vi) Percentage of direct (i.e. noncompetitive) procurements out of total; (vii) Number of public employees listed in the human resource unit’s registry, and of new appointments, those made through a merit-based process; (viii) Development and approval of a plan to create a permanent human resource agency; (ix) Corruption cases identified by ULCC referred to judicial authorities for prosecution and follow-up; (x) Number of reports produced by CSO monitors and actions taken in response by agencies monitored; (xi) Greater public understanding of, and support for, reform program content; (xii) Coverage of donor 5 economic governance activities in the PIU data base; and (xiii) Civil Society Organizatio n members’ ability to identify elements of Ministry of Finance’s reform programs. 3 Specific results expected in terms of project completion are listed in Annex III (Results Framework) of the Project Appraisal Document. 8. The implementation of the EGTAG1 in collaboration with activities of other donors was designed to provide an improved institutional and operational framework for the preparation and execution of the current and investment budget, tracking and control of expenditures, the implementation of the new procurement decree, identification, hiring, and training of key staff, and the dissemination of information on the reforms and processes to Haitian citizens. Emphasis was on bringing existing structures and practices into conformity with the improved legal framework in preparation for subsequent steps leading to further institutional strengthening and public sector modernization. Because of the short life of the project, the emphasis was on institutional change and the results indicators were intended to measure the extent of adoption of new practices and structures 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 9. The original Project Development Objective (PDO) and key indicators were not revised. 1.4 Main Beneficiaries, (original and revised, briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) 10. The beneficiaries of EGTAG1 within the Government of Haiti include: (i) the Direction du Budget (including the Debt Department); (ii) the Commission Nationale des Marchés Publics (CNMP, National Procurement Commission); (iii) the Cour Supérieure des Comptes et du Contentieux Administratif (CSC/CA, Supreme Audit Institution); (iv) the Unité de Lutte Contre la Corruption (ULCC, Anti-corruption Unit); (v) the Office de Management des Ressources Humaines (OMRH, the Human Resources Management Office); and (vi) Civil Society. The beneficiaries for the LICUS grant and EGTAG1 were selected based on their relevance for recovery of the budgeting functions within the Government and management of donor funding, as well as based on previous experience of working with the Bank during the 1990s. 1.5 Original Components ( as approved ) 11. Component 1 - Financial Resource Management: This key area for economic governance was defined as the development of a capacity to produce and execute a budget, track its implementation, and reduce irregular budgetary use and expenditures. 12. Subcomponent 1.1 - Budgeting: It was assumed that the IDB would cover most equipment needs and help in the design of basic budgetary procedures (as established at the time of the new Organic Law). The EGTAG1 focused on ensuring that sufficient numbers of adequately prepared personnel occupy the required positions in the Ministry of Finance and other sector ministries. Activities included a diagnosis of current staffing patterns and needs, preparation and delivery of training programs, provision of long and short-term consultants to assist agencies in applying and refining new procedures, and development and implementation of plans to fill the staffing gaps. As the Ministry of Planning managed the investment budget, the same objectives were going to be addressed there, along with steps to ensure coordination of the investment and operational budgets and to strengthen project development capacity. 13. Subcomponent 1.2 - External Control: The LICUS-grant funding for the Supreme Audit Institution (Cour Supérieure des Comptes et du Contentiuex Administratif, CSC/CA) was supporting class-room and on-the-job training of auditors in their new ex-post control function. Under the EGTAG1, the CSC/CA’s initial experience with ex-post auditing was evaluated, and further personnel, equipment, budgetary, and training needs identified, resulting in a plan for upgrading the agency’s performance over the following two to three years. The EGTAG1 was designed to support implementation of and further adjustments to this plan. 3 While ideally this should be response by the public rather than by CSOs , as the MEF will work directly with CSO groups, it was considered to be easier to obtain this information less formally from members of the groups involved. In addition, that approach would not require additional financing, 6 14. Subcomponent 1.3 - Procurement: The EGTAG1 built on assistance provided under the LICUS Tru st Fund to support the newly created Commission Nationale des Marchés Publics (CNMP). The EGTAG1 supported the CNMP’s assumption of the core regulatory functions mandated by law, including the creation of a public sector-wide corps of procurement officials, the further development of and training in standardized procedures and documents, and the creation of centralized databases of government suppliers and contract awards. It also continued the work initiated under the LICUS grant on the development of standardized bidding documents, publication of information on bids and contracts, and education of potential bidders and the general public with respect to the procurement process. As with all elements under this component, this was intended to be an incremental process in which new procedures were tested and modified according to preliminary results. 15. Component 2: Human Resource Development: During the project identification missions and as part of the Interim Cooperation Framework (ICF), a Bank consultant worked with 22 government agencies to develop an initial plan for meeting the most critical human resource needs. This plan was the basis for further development of this area but, given the consultant’s estimates of what the GoH’s minimal proposal would cost (in excess of $100 million), the EGTAG1’s support focused selectively on five areas: É (Covered under component 1, above) Ensuring minimal human resource needs are met for financial management, control, and procurement systems, within the core agencies and the rest of the central ministries. É Ensuring that key ministries responsible for service delivery have adequate personnel, appropriately placed and trained, to plan and oversee this function. É Working with the Ministry of Finance and Prime Minister’s Office (pending creation of a Ministry for the Civil Service) and other executive agencies to develop plans for meeting their personnel needs over the next five years. While donor-financed consultants might temporarily perform some core functions, the longer-term need was to ensure that Haiti could recruit, maintain, and pay a permanent core staff. These plans, unlike the first effort, would also have to take financial constraints into account. É Working with the above agencies to design a longer-term civil service reform, including the necessary legal foundation. Under any follow-on loan or grant, steps could be taken to initiate implementation, probably on an agency-by-agency, or function-by-function, basis. É Enhancing the capacity of public sector training institutions to develop and deliver the training needed for the first three areas, and financing pilot courses. 16. Component 3: Anti-corruption and Civil Society Engagement: The LICUS Economic Governance Trust Fund supported the establishment of the anti-corruption unit and a program of civil society monitoring of governance reforms. The EGTAG1 was designed to do further fine-tuning, help develop a capacity for anti-corruption programming, including skills and techniques needed to identify areas of vulnerability and design remedies, and expand mechanisms for monitoring of governance reforms and performance by civil society organizations and ordinary citizens. Training in investigation of actual cases was intended to be financed by other donors. 17. Component 4: Project Management and Communication: Special emphasis was placed on developing mechanisms for communicating the content of reform proposals and their progress in order to ensure greater understanding and wider ownership of the efforts among all Haitian citizens. Initially, EGTAG1 was supposed to use the project management mechanism developed for the LICUS Trust Fund. However, a separate project implementation unit was formed to manage both EGTAG1 and two IDB projects for institutional strengthening. Funding for expenses was shared with the GoH and the EGTAG1 financed additional equipment and conference logistics needs. 1.6 Revised Components 18. The design of the project remained unchanged during the lifetime of the project. 1.7 Other significant changes (In design, scope and scale, implementation arrangements and schedule, and funding allocations) 19. The delay between the EGTAG1 Board date and effectiveness was approximately six months and the project was extended twice from its original December 31, 2007 closing date. The first extension was for 12 months until December 7 31, 2008 and granted on November 27, 2007 on the basis of the delayed effectiveness date. The second extension was granted on November 13, 2008 for an additional 9 months and established September 30, 2009 as the closing date. This additional extension was justified partly by the delays caused by serious natural disasters (four massive hurricanes hitting the country in August-September 2008) and political unrest that prevented the government from implementing some of the scheduled activities. The factors behind these changes are discussed in detail in paragraphs 1.1 and 2.2. 8 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account; risks and their mitigations identified; and adequacy of participatory processes, as applicable) 20. The present ICR finds the EGTAG1 quality of entry to be Satisfactory . The Quality Assurance Group (QAG) panel’s report 4 on EGTAG2 which also reviewed the EGTAG1 project, considered the overall objectives of EGTAG1 as appropriate because it focused on key areas of economic governance. The QAG report also noted that the project was ambitious in its coverage, working with five government agencies as beneficiaries. It also mentions that the project includes “some innovative features in terms of the Bank’s assistance to the country. EGTAG 1 and 2 introduce highly desirable elements of civil society monitoring of GoH activities. Donor collaboration has been strong.” 21. Following the suspension of World Bank lending to Haiti from 1997 to 2003, the operation was prepared in 2004 under a transition government and implemented over a period when the country faced several political and natural disasters. As explained earlier, EGTAG1 was designed to build on the measures supported under the EGRO and the emergency assistance under the LICUS Trust Fund grant, and it was intended as one of the first steps in the Bank’s program supporting government efforts to improve economic governance. 22. Bank technical assistance (TA) support was originally envisaged within the framework of a larger grant. However, the available IDA envelope was limited to US$2 million, thereby precluding support in the form of a more comprehensive $4 million operation. As a result, Bank TA took the form of two back-to-back US$2.0 million grants - EGTAG 1 and 2 - which were presented to the Board within one year of each other. A larger technical assistance operation (preparing the two economic governance technical assistance projects as one instead of splitting the total $4million into two phases) was considered and rejected for the following reasons: (i) a new government was expected to take office in early 2006, at which time the World Bank, in coordination with other donors, was going to discuss with it the next phase of technical assistance needs in the economic governance area that could be supported by a possible follow-on TA operation to ensure full government ownership, and (ii) the need to link additional assistance to performance in implementation of the program and achievement of results on the ground. Due to the phased approach, the second EGTAG1 operation was brought to the Board one year after the approval of EGTAG1 and the projects are largely interlinked. In retrospect, while political factors, along with the need to link the assistance to performance, justified the two phase approach for the EGTAGs, pooling funding should be considered for similar future operations. This would ease the administrative burden both for the Bank teams as well as for the counterparts. 23. EGTAG1 had a wide scope in terms of the thematic areas covered as well as the number of beneficiaries, especially considering the limited amount of financing available. It might be argued that this subsequently contributed to the delays in implementing the project. However, when designing the project, a broad-based approach to economic governance seemed necessary. Considering the interconnections between the economic institutions, leaving some of the agencies out of the scope of support could have had serious consequences on the results achieved under the other components. The beneficiaries for LICUS and EGTAG1 were selected based on their previous experience of managing donor funds and of working with the Bank during the 1990s, as well as for their relevance for recovering budgeting functions within the Government. 24. In addition, the following lessons learnt were considered during the preparation of the project (from the Project Appraisal Document): “Aside from the general lessons applicable to all LICUS countries, experience in Haiti over the last year indicates three important lessons: (i) the need to work incrementally; (ii) the importance of constant communication and coordination among and within governmental agencies and among donors; and (iii) the key role played by the counterpart agency and its PIU in effecting this coordinating function. Also, while the government has shown a capacity to draft and pass new laws, their implementation has lagged. Before supporting the adoption of new 4 QAG Review of Public Sector Governance Guidance Framework (EGTAG II), 30 April 2008 9 legislation or systems, it appears thus important to assist the authorities in implementing existing legislation. The new budget law and procurement decree include many worthwhile innovations, and it will be important to ensure they are implemented in full. As a result, EGTAG1 focused on assisting the Government in putting into effect the innovations it has recently introduced by law. It has also been apparent that despite the recent greater emphasis on donor coordination, more attention is needed to enhance this further and this has been a main focus in the preparation of the EGTAG1 project and the definition of its project management arrangements.” 25. Two risks to the project development objective (PDO) were identified in the preparation of the project. The first risk, assessed as moderate, was “the proximity of next elections and the chance that the new government will not support the project, or that because of the elections (or their failure to be held) civil violence will escalate.” Although Government ownership of the project did not decline as a consequence of the change of Government in 2006 and the security situation did not significantly worsen over the implementation period, the project suffered from the political volatility and the beneficiaries reported severe security issues that delayed project implementation. The second risk to the PDO, assessed as substantial, was the fact that “insufficient donor coordination impedes advances in key areas.” This was mitigated by regular Government-donors coordinating meetings in Haiti, coordinated project planning and implementation arrangements, as well as enhanced project supervision efforts. The project contributed to improving aid coordination in the field of economic governance in Haiti, although donor coordination continues to be a challenge. 26. In addition, three risks to individual project components were considered. The first, assessed as substantial, was “MEF’s failure to establish a clear direction for implementation of the budget law could make it difficult to program activities, in this and in the other areas.” Proposed joint donor project implementation arrangements for the activities supported by the EGTAG1 were contributing to improved coordination for the implementation of the budget law and this risk did not materialize. The second risk, assessed as moderate, was “weak institutional capacity in any or all components and failure to enact enabling legislation prevents forward movement in one or more of them.” This risk did in fact materialize as project implementation was delayed as a consequence of capacity issues in the project implementation unit and among the beneficiaries and to some extent due to the staffing changes within the Bank team. The third risk, assessed as moderate, was that “GoH is unable to provide the staff needed for one or more of the agencies”. The risk was mitigated through training and Government’s commitment to fill the positions in the MEF, CNMP, CSC/CA and ULCC, where most key positions were staffed with qualified officials able to benefit from further capacity building support. 27. The project was prepared under a tight timeline, which was an additional burden for both the Bank and the counterpart teams. The Government was consulted during preparation of the EGTAG1 but, as part of the ICR reviews, the local counterparts suggested that in future operations the Bank could increase involvement of the national authorities in project design, while keeping in mind the capacity constraints and pressures from different donor organizations. It was suggested that the preparation of the next EGTAG could be more consultative. In practice, this could mean additional support to the Government and beneficiaries between approval and implementation. The terms of reference would need to be drafted in such a way that the supported institutions have a better grasp of the contents, objectives and the procedures of the project. 2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) 28. The implementation of the project is rated as Satisfactory. Overall, the project was implemented in a precarious, difficult, and unpredictable political and natural environment. Between 2004 and 2009, there were three presidents and six different prime ministers. In Haiti, there is always the risk that social unrest may destabilize the country and lead to abrupt political changes that derail the reform process. Especially in 2008, Haiti experienced a series of natural disasters that threatened macroeconomic stability and diverted resources away from government priorities. In addition to the political stalemate following the food and fuel price riots, Haiti was hit by four back-to-back hurricanes (Fay, Gustav, Hanna and Ike) and tropical storms in August-September 2008, which caused damages and losses estimated at nearly a billion dollars, or about 15 percent of GDP. The security of Bank staff, project counterparts and the beneficiaries was continuously at risk since staff work in a tense and dangerous political environment. The project counterparts have reported serious security issues including kidnappings and a suspected murder over the implementation period. 10 29. A mid-term review, carried out in early 2008 5 , rated the project as ‘moderately satisfactory’. It pointed out the considerable slippage in starting the project due to the delays in recruiting and building the project implementation capacity of the PIU staff as well as among the project beneficiaries. Progress, especially in relation to activities with the CNMP, DGB and CSCCA, was described as unbalanced. The mid-term review recommended revising the project development objectives and indicators. This was not done because it was felt that the project was already at a late stage of implementation. However, and as a consequence of this mid-term review, the team took some proactive measures to better define the newly implemented EGTAG2 project. As a result, EGTAG2, along with the participation of the beneficiaries was restructured in 2009 and the components, as well as the results framework, were revised. Sharing the PIU between the WB and IDB was felt to be a positive experience, creating a natural space for more efficient aid coordination. The effectiveness of EGTAG2 was delayed as a consequence of delays in EGTAG1. However, the QAG Panel report of EGTAG2 commended the intimate knowledge of the two co-task team leaders, both of whom were fully committed to the successful implementation of the projects, while noting that the Implementation Status Report (ISR) had been grossly underutilized in the case of both EGTAG operations. In response to the report, the team agreed that conditions in Haiti required intensive supervision. The intensified supervision measures included consolidating the governance portfolio under one TTL in mid-2008 and establishing weekly videoconferences with the Project Implementing Unit (PIU) to monitor closely implementation of both EGTAGs and to increase the capacity of both this unit and the Government. Furthermore, the Haiti country office hired a field-based operations officer to support implementation of the portfolio; and the team hired a local economic governance consultant to assist with implementation of the EGTAGs, the LICUS grant and with donor coordination in the field. The task team at the Bank was also strengthened by the assignment of a senior procurement specialist who dedicated significant time to reviewing and commenting on procurement documents, providing advice to bring more efficiency to the contracting process. However, as is often the case in fragile states, even with a large supervision budget, it can be difficult to mobilize on a long term basis specialists in all the areas addressed by the project (civil society, anti-corruption work, budget reform, procurement reform, human resources reform). 30. Project implementation was delayed because of frequent staffing changes both on the Bank and counterpart side. On the Bank side, there were three task team leaders during the lifetime of the project as well as a number of other TTLs monitoring other related governance projects. During the first years of project implementation, the Country Management Unit (CMU) could have played a more active role in supervision. Some of the implementation status reports lacked comments from the CMU. The initial supervision efforts were performed mostly by staff in headquarters and there could have been a stronger involvement of the field office. However, it should be noted that at the time of project design the Haiti Office had just been reopened and was in the process of being staffed, and that these issues were addressed in the course of project implementation. 31. On the Government side, especially in the early phase of implementation of the project, there was a lack of clear vision of the goals that each government institution had to achieve. As a consequence, the team received ad hoc requests for activities that were not necessarily priority initiatives. Furthermore, it can be argued that the high number of project beneficiaries contributed to