INTERNATIONALBANK
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WORLD BANK
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STRUCTION PM
AND DEVELO
December 2004 No. 59
A regular series of notes highlighting recent lessons emerging from the operational and
analytical program of the World Bank`s Latin America and Caribbean Region
URUGUAY: CONSULTATIONS WITH CIVIL SOCIETY
AROUND SOCIAL PROGRAMS IN
STRUCTURAL ADJUSTMENT LOANS
Sandra Cesilini, Lisandro Mart�n and Mag�i Moreno Torres
Background
multilateral institutions, including the World Bank (WB), to
Uruguay is a small open economy with one of the highest help Uruguay withstand the impact of strong external shocks,
GDP per capita ratios in the region. The country's recent poor without undermining its public and social services.
growth performance has been strongly correlated with neigh-
boring Argentina's economic crisis. In 2002, Argentina's
Inclusion and Dialogue
GDP contracted by 10.2 percent, and Uruguay's by 10.8
percent. This recession has hurt the country's social welfare
and increased both poverty and unemployment sharply1. To promote greater citizen participation in reform policy
design, implementation and impact monitoring, the Bank, in
In 2001 the government of Uruguay decided to undertake cooperation with the Government of Uruguay, Foro
spending cuts as a crucial step towards recovering macro- Consultivo Econ�mico Social del Mercosur3 � Secci�n
economic balance. As a result of these fiscal adjustments, Uruguaya (FCES-SU) and UNDP designed and implemented
total public expenditures, including a public consultative process involving a
social programs, suffered signifi- broad array of civil society organizations
cant reductions. In this context, (CSOs). The consultations elicited feed-
the government negotiated a mas- back from civil society on the social
sive emergency rescue package programs and services protected under
with the international financial in- the reform agenda, including a strategy
stitutions (IFIs) for US$3.9 billion, and monitoring plan to track goals at the
or approximately one-third of its regional and national levels. The consul-
GDP. The package was tied to tations provided useful information to
structural reforms aimed at turning government and CSOs on: 1) the cover-
a primary deficit of 1.2 percent of age of social protection programs (and
GDP in 2001 into a primary surplus any overlaps or duplications); 2) the de-
of 3 percent of GDP by 2003. The gree of coordination between central and
package also protected several social programs against departmental administrations; and 3) the efficiency of public
budgetary cuts, particularly those focused on the most spending on these programs.
vulnerable groups in society: children, female-headed
households, the unemployed and the elderly. This note The specific objectives of the consultation were:
specifically examines the 2002 Structural Adjustment
Loan (SAL) which supported reforms necessary to restore � To enhance the sustainability of the reform program
economic growth and improve the competitiveness of the
by helping CSOs to understand their rights and re-
Uruguayan economy while safeguarding these "protected
sponsibilities, and to facilitate public oversight by
social programs" (PSP).2
giving users/beneficiaries a voice in the analysis of
social policy priorities.
This adjustment operation was part of a concerted effort by
1
� To analyze the opinions of relevant national and re- action plans that combine existing individual efforts. Network
gional actors on the pertinence of continuing to protect building was seen as a positive by-product of the consultative
these social programs in the face of the socio-economic process.
crisis.
Opportunities Identified
� To design and pilot a social monitoring system using A number of additional strategies have been identified to
strengthen the role of civil society in development and in the
selected indicators to track performance of program
implementation of Bank projects. Social accountability
goals at the regional and national level.
mechanisms have come to be seen as the natural next step in
4
the consultation process. To this end, the Bank has helped to
Several activities have been carried out to date, through a
support the development of the "Social Monitor". At present,
series of national and regional meetings. A background
two CSOs have been selected to co-implement this program.5
document, which sets out the rationale and objectives of the
These CSOs will develop a strategy and indicators to monitor
consultations and criteria for institutional response, was
the performance of Uruguay's Budget-Protected Social Pro-
provided in all meetings.
grams'. Other tools will be implemented, including: i) the
collection and analysis of relevant information on the main
National level consultations were launched in Montevideo in
goals of the PSP's and their achievements; ii) consultations
October 2002, involving representatives from 25 national
with government technical experts to register their percep-
trade unions as well as entrepreneurial, professional, coopera-
tions of project implementation; iii) surveys of beneficiaries;
tive and non-governmental organizations. In November 2002,
and, iv) mapping of PSP coverage in each area of interven-
a second meeting was held jointly with the Consejo
tion. This information will be compiled in periodic reports
Econ�mico y Social de Paysand�, a coordinating institution
submitted to the World Bank, UNDP and FCES and will, in
for the economic and social
turn, be publicly dis-
development of the
tributed as an effort to
Paysand� department. Rep-
offer updated verifi-
resentatives from local orga-
able information on
nization from other prov-
programs' perfor-
inces of the western littoral
mance to civil society
region of the country also
at large.
participated. In May 2003,
another consultation was
Surveys of CSOs
conducted in Florida City,
have been identified
with 60 CSOs representing
as one of the most
Florida and other provinces
important instruments
from the center of the coun-
which can be used to
try. These events were cov-
strengthen the captur-
ered by the media (radio, newspapers and TV), and concluded
ing of perceptions and subsequently improve the quality of
with a press conference in which all actors participated and
horizontal dialogue with the multilateral organizations as well
commented on the process and its outcomes.
as with government at the federal and local level. In future
consultations, all participating organizations could be sur-
Inclusion and Participation
veyed by trained staff before the process begins to provide an
One of the principal aims of the initiative was to encourage
overview and ranking of key issues by category or sector, and
the active participation of organizations representing different
to encourage participation in the meetings by a larger number
economic and social sectors in the discussion of the impact of
of the organizations invited.
the reform policies. Participants in these dialogues included:
labor unions, industrial and trade associations and other
A third opportunity is the role of the media in publishing and
social actors such as the Mesa de Emergencia Alimentaria,
disseminating information on the initiative and the SAL itself.
the Social Security Commission, religious organizations and
Media coverage is especially important during consultative
different grassroots organizations. Afro-descendant organiza-
meetings to, (i) engage the wider public on the outstanding
tions were also invited to participate.
issues arising from the dialogue, (ii) to widen the process of
decentralization in terms of information disclosure, (iii) to
Access to Information
contribute to the empowerment of people who live outside the
During the Florida meeting, a number of CSOs noted that
main urban centers and, (iv) to report on the process and its
consultations are particularly useful in clarifying the back-
outcomes.
ground of programs and activities. They considered informa-
tion key for empowerment and wanted the media to contrib-
Capacity-building and Partnerships for Social Account-
ute consistently to this initiative, particularly by reporting on
ability
program implementation (including budget execution) and
Many uncertainties remain regarding the existence of the
outcomes. They also suggested that increased access to
necessary political will, capacity and resources required to
information is crucial to build concensus around common
2
incorporate citizens into the processes of public reform and specialized expertise, while ensuring coordination.7 Previous
monitoring. A number of weaknesses within civil society experiences suggest that this initiative should be comple-
itself effectively limit their ability to play an active role in this mented with capacity building exercises that strengthen the
and similar initiatives. organization's ability to monitor, apply innovative instru-
ments for social accountability, and which encourage interac-
Need for More Detailed Information tion and interchange between the NGOs. This would help to
Some of the invited CSOs commented that the consultation solve one of the main difficulties facing the initiative, which
background document provided economic and social infor- is to advance a large agenda with a wide range of often
mation at a macroeconomic level, but did not include the disconnected CSOs.
social and qualitative indicators necessary to interpret the
situation and provide useful suggestions or counter-propos- The use of, and regular contact with, regional NGO networks
als. Providing global budget allocations, without additional through social auditing programs could help improve the
details, is not sufficient to form adequate judgments and quality and credibility of public administration. Information
opinions on the appropriation of resources. In the initial relevant to policy making could be collected during the local
responses to the consultations, there were also frequent consultations and analyzed in the context of nationwide
requests for additional information from the government, and activities. Regional networks could also help to identify and
inquiries about allocations to institutions outside of publicly- solve overlapping authority problems at the municipal, pro-
funded programs6 that participate in the execution of projects. vincial and national levels, among other issues. Questions of
jurisdiction were identified by CSOs as a major obstacle to
Horizontal Articulation of CSOs increasing the efficiency and returns to public spending in
A challenge for civil society groups is the insufficient hori- social programs. These are perceived as largely a conse-
zontal articulation found among CSOs. Infrequent organized quence of insufficient territorial coordination among the
collaboration or dialogue among CSOs reduces their motiva- different levels of government and administration, and the
tion to participate in the consultations, which are seen as limited flexibility of programs to adapt to local contexts,
relatively detached exercises by many organizations, remote problems and resource allocations.
from their day-to-day activities, interests and timeframes. The
reality of poorly-funded and overstretched CSOs should be In this regard, some of the ideas proposed by CSOs during the
taken into account when designing methodologies for these consultations included: collecting and disseminating good
types of consultations. local data on population and socio-economic conditions;
creating "program maps" that include information on cover-
The contacts between CSOs and national public institutions, age, beneficiaries, resources, personnel, etc.; integrating non-
both regional and departmental, have traditionally been spo- traditional actors in the design of employment and other
radic. It would clearly be desirable to try and enhance the social policies; and creating a coordinating team for monitor-
dialogue between these institutions, particularly with the ing social programs.
Oficina de Planeamiento y Presupuesto (Planning and Bud-
get). Given the potential impact of these SALs and the controver-
sial view that many CSOs have of SALs as a lending
Finally, the dialogues should clarify expectations, particularly instrument, the consultation initiative will benefit from an
by stipulating which organizations will be technical counter- extensive evaluation process as a tool to deepen transparency
parts of the Bank for follow-up activities. and build trust among the various actors. This is particularly
true given that, during the consultations, some CSOs were
convinced that SALs address only short-term necessities and
Next Steps: Towards Sustainability and expressed the need to carefully rethink a long-term govern-
Monitoring of Outcomes ment strategy to face the crisis. Many participating CSOs
were insufficiently informed about the World Bank's role in
The immediate next step is the official launching of the Social safeguarding social program spending within the SAL and
Monitor project. The Social Monitor has been designed to other lending operations.
incorporate program beneficiaries/users in the assessment of
the program's results, impacts, level of transparency and The evaluation exercise should also distill best practices to
accessibility to information. One important sub-goal of the improve future adjustment operations and potentially extend
initiative is to ensure that the aims of the process and the this type of consultation to other parts of the Bank's portfolio,
substance of proposed activities are shared with society at particularly operations with social and human development
large. components, aiming for a clear and direct impacts on benefi-
ciaries.
The consultation is expected to contribute to strengthened
strategic partnerships among CSOs. As such, and unlike the Finally, information dissemination will prove fundamental to
situation in other Southern Cone countries, the Social Moni- ensuring the quality and effectiveness of consultations and
tor in Uruguay will be implemented by two different CSOs, social auditing mechanisms. It is particularly important to
each of which will monitor programs in accordance with its share international best practices and examples with a wide
3
audience to build greater consensus and support for these
Development Policy Lending Replaces
activities within Uruguay.
Adjustment Lending
Conclusion
The World Bank overhauls its guidelines for policy-
based lending to reflect 20 years of experience
The consultations with civil society around the Structural
Adjustment Loan (SAL) will contribute to the effectiveness
and sustainability of Uruguay's reform program. They broad- August 10, 2004 One of the World Bank's main
ened the understanding of the risks and benefits of the reform lending instruments--Adjustment Lending--has been
package, including the safeguarded social programs and replaced by the new Development Policy Lending in a
provided donors and the government with crucial information major overhaul of the Bank's operational policy.
on the performance of these programs. At the same time, the
consultations improved civil society's understanding of mul- Policy-based lending in support of a country's policy
tilateral lending operations and built trust among CSOs for program accounts for about one-third of the World
the structural adjustment loans. Finally, the consultations Bank's annual lending.The Bank's other lending in-
helped to identify new areas of emerging opportunities for strument � investment lending � funds projects such as
social accountability, capacity building for stakeholders and road and school construction.
enhanced horizontal and vertical dialogue across the country
concerning social programs. The new policy is the culmination of more than two
years of consultation with stakeholders--including
************* governments, community representatives, civil society
groups, academics and private sector representatives
around the world.The framework unifies policy that
Notes
applies to a whole range of instruments, including
sectoral adjustment loans, structural adjustment loans
1 Uruguay Country Profile, The Economist Intelligence and poverty reduction support credits. In addition, it
Unit, 22 November 2002. deals with core issues of design, fiduciary arrange-
2 The Protected Social Programs (PSP) are: Asignaciones ments, financing options, and dissemination and
Familiares, Programa de Alimentaci�n Escolar, Apoyo a disclosure.James Adams, Vice President and Head of
Instituciones P�blicas y Privadas, Programa Nacional de the Operations Policy and Country Services Network,
Complementaci�n Alimentaria, Centros de Atenci�n a la says the switch to Development Policy Lending is
infancia y a la Familia, Mejoramiento de Calidad de la much more than just a name change: It reflects how
Educaci�n Primaria and Programa de Capacitaci�n thoroughly transformed the instrument has become in
Laboral. the last decade or so.
3 FCES is an agency within MERCOSUR
'S institutional framework, organized in permanent na- For more information visit the Bank's website at:
tional sections composed of representatives from the http://www.worldbank.org and look under "Projects"
following sectors: i) entrepreneurs, ii) trade unions and and "Financing Instruments"
iii) other diverse sectors (NGOs, cooperatives, universi-
ties, professional associations, etc.).
About the Authors
4Accountability is the ability to call state officials, public
employees, or private actors to account, requiring that Sandra Cesilini is a Senior Social Development and Civil
they be answerable for their policies, actions, and use of Society Specialist. Lisandro Martin is a Junior Professional
funds. Access to information and analysis about the Associate and Mag�i Moreno Torres is a Governance
performance of services and policies builds pressure for Advisor with the British Department for International Devel-
accountability. opment (DFID). Prior to that, she worked for the Civil
5 These organizations are: PROINGO-Red Uruguaya de Society Team of the Latin America and Caribbean Region of
Apoyo a la Nutrici�n y Desarrollo Infantil, and Equipos the World Bank on issues of empowerment, accountability
Mori. and good governance in World Bank operations.
6 Publicly-funded programs covering basic needs, such as
infant and mother health, food subsidies, etc.
This paper was made possible with the special support of
7 PROINGO-Red Uruguaya de Apoyo a la Nutrici�n y
Beatriz Olano, from Foro Consultivo Econ�mico y Social
Desarrollo Infantil will monitor projects focused on Food,
del MERCOSUR
Childhood and Adolescence, and Equipos Mori will focus
on projects thought to reduce unemployment and dealing About "en breve"
with subsidies.
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