Resultado de la Encuestas

83. The two projects in support of SAP are rated as partly successful (Table 19). The ratings for individual criteria are all clustered at the lower end.

37 _{ADB has guidelines on the economic analysis of water supply projects. ADB. 1998. Guidelines for the Economic}

Analysis of Water Supply Projects. Manila. One water supply project has been approved since publication of these

guidelines (Punjab Community Water Supply and Sanitation Project). This includes a financial and economic analysis. However, its projected returns are far in excess of those actually achieved in the predecessor project (Punjab Rural Water Supply and Sanitation Project) according to its PCR (EIRR of 6.7% compared to an appraisal estimate of 17.8% for this project and around 50% for the successor project). The financial ratio of return could not be calculated as the financial inflow was much less than the cost outflow. Again, financial and economic analyses did not appear to be used to compare alternative approaches. Financial performance was inadequately evaluated

Table 19: Performance Assessment of Multisector Projects

Project PCR Rating PPAR Rating SAPE Rating

Social Action Program I Successful Partly successful Partly successful Social Action Program II Partly successful — Partly successful

PCR = project completion report; PPAR = project performance audit report; SAPE = sector assistance program evaluation; ― = not yet evaluated.

a _{Ongoing project.}

Source: Asian Development Bank PCR and PPAR documents and ratings by sector consultants.

84. The ongoing Sindh and Punjab DSSPs were not rated. However, given the importance of the DSSP approach to ADB’s ongoing and planned support for social sector development— two further DSSP projects are programmed for Balochistan and NWFP—the SAPE offers some observations in light of past experience. While there is a need to support local governments, DSSPs contain a significant number of risks, which will need to be very closely monitored. Given this, ADB needs to provide a high level of support and supervision (well above the norm), including by staff based in PRM. Based on past experience, the issues include the following:

(i) The DSSPs follow a multisector approach. However, multisector and multiagency projects have been problematic—particularly SAP. Any benefits were greatly outweighed by the increased management complexity—a complexity that will be greater given the need to deal with 16 district governments and 102 tehsil municipal authorities (in the case of Sindh DSSP) in place of a single provincial government. However, the difference is principally in the areas of responsibility and accountability for action (“the how”) rather than in the “what” is to be done. The DSSP approach is different because of the advent of elected local governments. (ii) Like SAP, DSSP targets increased public sector social expenditure—SAP through

incremental budget allocation, particularly for nonsalary expenditure and DSSP through a process of conditional grants. While additional social expenditure is needed, the SAP experience showed that the first step is to make better use of the expenditure already provided. Putting more money into poorly performing public provision does not produce better social outcomes.

(iii) Like SAP, DSSP aims for greater involvement of beneficiaries and the private sector in service delivery. Like SAP, DSSP will support school management committees. The reality is that these have been subject to capture and have mostly proven to be ineffective in improving school management. Public officials have been extremely resistant to seeing public funds go in support of private provision. (iv) Like SAP, DSSP will support the more rational allocation of resources through

planning—SAP had annual operating plans, DSSP has annual sector plans. Whereas the former only involved a relatively small number of provincial authorities, DSSP will have to work with a large number of new local governments with very limited capacity. The SAP experience indicates that planning did not resolve the problems of the imbalances in social expenditure, and certainly not in a sustainable manner.

(v) DSSP recognizes the need to address the capacity constraints of local governments but the experience in most social sector projects is that capacity building elements have only been partially implemented at best.

(vi) Local governments are still very weak and there is doubt as to whether they will be able to address the longstanding causes of poor social sector performance in Pakistan (para. 35). What is clear is that they will require considerable support over a long period of time. Given this, the DSSP approach of injecting a large amount of

money into the nascent local government system over a 3-year time period may not produce the desired results—in fact, it could be counterproductive without a very good system of monitoring and reporting, something which has proven elusive to date.

85. Implementation experience to date in the Sindh DSSP indicates that some of these concerns are already starting to become evident. For example, well into the program period, the supporting TA loan for local government capacity building has still not become effective, thereby delinking funding and capacity building. Further, provincial line departments are mobilizing to capture a significant part of the TA support. Another concern is that monitoring systems are yet to be put in place, so there is little, if any, evidence available of the “situation on the ground.” 86. In raising these concerns, the SAPE is not suggesting that ADB back away from the DSSP process. Rather, it is recommending that a considerably enhanced level of support should be provided by ADB through creation of a DSSP support unit in PRM, with its dedicated staff. This should include the capacity for much improved progress monitoring and special studies or identified problems. Also, a flexible approach is required to allow timely changes in light of progress being made (or not made).

C. The Problem in Achieving Results: Turning Inputs into Outputs and Outputs into