Report No: ICR00006314
IMPLEMENTATION COMPLETION AND RESULTS REPORT
IDA-53980
ON A
CREDIT
IN THE AMOUNT OF SDR 13.9 MILLION
(US$21.2 MILLION EQUIVALENT)
TO THE
REPUBLIC OF ARMENIA
FOR THE
ARMENIA SOCIAL PROTECTION ADMINISTRATION II PROJECT
February 25, 2025
Social Protection and Jobs
Europe and Central Asia
The World Bank
Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
CURRENCY EQUIVALENTS
(Exchange Rate Effective June 18, 2024)
Currency Unit = Armenia Dram (AMD)
AMD 388.88 = US$1
US$1.317520 = SDR 1
FISCAL YEAR
July 1 - June 30
Regional Vice President: Antonella Bassani
Country Director: Rolande Simone Pryce
Regional Director: Michal J. Rutkowski
Practice Manager: Paolo Belli
Task Team Leader (s): Lucia Solbes Castro
ICR Main Contributor: Peter Pojarski
The World Bank
Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
ABBREVIATIONS AND ACRONYMS
ADS Armenia Development Strategy
ALMP Active Labor Market Program
AMS Application Management System
ASA Advisory Services and Analytics
CGA Country Gender Assessment
CPF Country Partnership Framework
FBP Family Benefit Program
FFPMC Foreign Financing Project Management Centre (also referred to as PIU)
FM Financial Management
GDP Gross Domestic Product
GoA Government of Armenia
GRM Grievance Redress Mechanism
ICR Implementation Completion and Results Report
ILCS Integrated Living Conditions Survey
IMF International Monetary Fund
IRI Intermediate Result Indicator
ISPC Integrated Social Protection Center, then called USSTC after the establishment of USS
JSDF Japan Social Development Fund
M&E Monitoring and Evaluation
MLSI/MLSA Ministry of Labor and Social Issues/Ministry of Labor and Social Affairs
NILSR National Institute of Labor and Social Research
PAD Project Appraisal Document
PCU Project Coordination Unit
PDI Project Development Indicator
PDO Project Development Objective
PID Project Implementation Department
SEA State Employment Agency
SPAP Social Protection Administration Project
SSSS State Social Security Services
STEP Systematic Tracking of Exchanges in Procurement
UIS Unified Information System
UNICEF United Nations Children’s Fund
USS Unified Social Services
USSTC Unified Social Services Territorial Center
The World Bank
Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
TABLE OF CONTENTS
DATA SHEET ................................................................................................................................................. i
I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ..................................................................................1
II. OUTCOME .................................................................................................................................................4
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ............................................................ 12
IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .............................. 13
V. LESSONS AND RECOMMENDATIONS ......................................................................................................... 15
ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................................................ 16
ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ....................................................... 21
ANNEX 3. PROJECT COST BY COMPONENT ......................................................................................................... 23
ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................................................ 25
ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ................................. 29
ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ................................................................................................... 30
ANNEX 7. LIST OF LEGISLATIONS (DPO 3 CONDITIONS) SUPPORTED UNDER THE SPAP II (2015) ........................... 31
ANNEX 8. DETAILS OF PROJECT RESTRUCTURINGS ............................................................................................. 33
The World Bank
Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
DATA SHEET
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BASIC DATA
Product Information
Operation ID Operation Name
P146318 Armenia Social Protection Administration II Project
Product Operation Short Name
Investment Project Financing (IPF) Armenia SPAP II
Operation Status Approval Fiscal Year
Closed 2014
Original EA Category Current EA Category
Partial Assessment (B) (Restructuring Data Sheet - 31 Oct
Partial Assessment (B) (Approval package - 24 Mar 2014)
2023)
CLIENTS
Borrower/Recipient Implementing Agency
Republic of Armenia Ministry of Labor and Social Affairs
DEVELOPMENT OBJECTIVE
Original Development Objective (Approved as part of Approval Package on 24-Mar-2014)
The proposed Project Development Objectives (PDOs) are to (i) improve social protection service delivery and (ii)
strengthen analytical and monitoring and evaluation functions of the agencies delivering social protection benefits and
services.
PDO as stated in the legal agreement
-
s
s
s
s
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FINANCING
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
Financing Source Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)
World Bank Financing 21,200,000.00 17,678,639.00 18,315,098.60
IDA-53980 21,200,000.00 17,678,639.00 18,315,098.60
Non-World Bank Financing 4,300,000.00 0.00 0.00
Borrower/Recipient 4,300,000.00 0.00 0.00
Total 25,500,000.00 17,678,639.00 18,315,098.60
RESTRUCTURING AND/OR ADDITIONAL FINANCING
Amount Disbursed
Date(s) Type Key Revisions
(US$M)
06-Sep-2018 Portal 5.11 • Loan Closing Date Extension
• Clients
• Financial Management
23-May-2019 Portal 6.62
• Procurement
• Institutional Arrangement
13-Dec-2019 Portal 7.45
• Components
• Results
• Disbursement Estimates
09-May-2020 Portal 7.91
• Loan Closing Date Extension
• Reallocations
• Implementation Schedule
• Components
• Results
• Disbursement Estimates
27-Oct-2020 Portal 8.81
• Loan Cancellations
• Reallocations
• Implementation Schedule
• Results
• Disbursement Estimates
02-Nov-2022 Portal 13.87
• Loan Closing Date Extension
• Implementation Schedule
• Results
• Disbursement Estimates
31-Oct-2023 Portal 16.92
• Loan Closing Date Extension
• Implementation Schedule
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KEY DATES
Key Events Planned Date Actual Date
Concept Review 12-Sep-2013 12-Sep-2013
Authorize Negotiations 05-Feb-2014 05-Feb-2014
Approval 24-Mar-2014 24-Mar-2014
Signing 23-May-2014
Effectiveness 29-Oct-2014
ICR/NCO 01-Mar-2025 --
Restructuring Sequence.01 Not Applicable 06-Sep-2018
Restructuring Sequence.02 Not Applicable 23-May-2019
Restructuring Sequence.03 Not Applicable 13-Dec-2019
Restructuring Sequence.04 Not Applicable 09-May-2020
Restructuring Sequence.05 Not Applicable 27-Oct-2020
Restructuring Sequence.06 Not Applicable 02-Nov-2022
Restructuring Sequence.07 Not Applicable 31-Oct-2023
Mid-Term Review No. 01 28-Apr-2017 15-Sep-2017
Operation Closing/Cancellation 30-Jun-2024 30-Jun-2024
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RATINGS SUMMARY
Outcome Bank Performance M&E Quality
Moderately Satisfactory Moderately Satisfactory Substantial
ISR RATINGS
Actual Disbursements
No. Date ISR Archived DO Rating IP Rating
(US$M)
01 04-Jul-2014 Satisfactory Satisfactory 0.00
02 30-Jan-2015 Satisfactory Moderately Satisfactory 0.00
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The World Bank
Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
03 14-Aug-2015 Satisfactory Moderately Satisfactory 0.50
Moderately
04 17-Feb-2016 Moderately Satisfactory 0.69
Unsatisfactory
Moderately
05 24-Sep-2016 Moderately Satisfactory 1.83
Unsatisfactory
06 22-Dec-2016 Moderately Satisfactory Moderately Satisfactory 1.83
Moderately
07 07-Nov-2017 Moderately Satisfactory 3.91
Unsatisfactory
08 29-Jun-2018 Moderately Satisfactory Moderately Satisfactory 4.52
09 19-Dec-2018 Moderately Satisfactory Moderately Satisfactory 5.84
Moderately
10 17-Jul-2019 Moderately Satisfactory 6.62
Unsatisfactory
11 05-Feb-2020 Moderately Satisfactory Moderately Satisfactory 7.91
12 22-Jun-2020 Moderately Satisfactory Moderately Satisfactory 7.91
13 31-Mar-2021 Moderately Satisfactory Moderately Satisfactory 9.71
Moderately
14 25-Nov-2021 Moderately Satisfactory 11.23
Unsatisfactory
15 25-Apr-2022 Moderately Satisfactory Moderately Satisfactory 12.65
16 02-Dec-2022 Moderately Satisfactory Moderately Satisfactory 13.87
17 30-Jun-2023 Moderately Satisfactory Moderately Satisfactory 15.95
18 14-Oct-2023 Moderately Satisfactory Moderately Satisfactory 15.95
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SECTORS AND THEMES
Sectors
Adaptation
Mitigation
Major Sector Sector % Co-benefits
Co-benefits (%)
(%)
FY17 - Public Administration - Social
18 0 0
FY17 - Social Protection Protection
FY17 - Social Protection 82 0 0
Themes
Major Theme Theme (Level 2) Theme (Level 3) %
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FY17 - Active Labor
FY17 - Human 7
FY17 - Labor Market Policy and Market Programs
Development and
Programs FY17 - Labor Market
Gender 7
Institutions
FY17 - Social Insurance
7
FY17 - Social and Pensions
Development and FY17 - Social Protection FY17 - Social protection
40
Protection delivery systems
FY17 - Social Safety Nets 40
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
ADM STAFF
Role At Approval At ICR
Practice Manager Paolo Belli
Regional Director Michal J. Rutkowski
Global Director Iffath Anwar Sharif
Practice Group Vice President Mamta Murthi
Country Director Rolande Simone Pryce
Regional Vice President Antonella Bassani
ADM Responsible Team Leader Lucia Solbes Castro
Co-Team Leader(s)
ICR Main Contributor Peter Pojarski
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I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES
A. CONTEXT AT APPRAISAL
1. Armenia experienced intense growth in the early 2000s, which was followed by a severe downturn during the
global financial crisis. Real growth averaged 12 percent annually from 2000 to 2008, primarily driven by foreign exchange
inflows that boosted investment in mining and construction. This growth led to higher per capita incomes and job creation,
reducing poverty from over 50 percent in 1999 to about 28 percent in 2008. Although social policies contributed to
lowering poverty during the 2000s, the main channels were the improvements in both labor (wages) and nonlabor
(remittances) income.
2. In the period preceding project appraisal, Armenia had been a consistent reformer, and its achievements had
translated into improved living conditions, although the global financial crisis severely impacted the economy, revealing
vulnerabilities and reversing some gains. Armenia had made notable progress toward the Millennium Development
Goals, improving living conditions. However, the crisis increased poverty to 35 percent by 2011, with extreme poverty
rising to 20 percent. The crisis also deepened poverty severity in the period 2008-2011 (from 1.4 to 2.5 percent) and
inequality (Gini based on consumption going from 0.24 to 0.26), with unemployment reaching nearly 20 percent.
Armenia’s recovery was slow in the period 2008-2014 due to its reliance on commodities, remittances and construction,
leading to a sharp economic contraction in 2009 and a tripling of the public-debt-to-GDP ratio by 2011.
3. At the time of appraisal, Armenia’s social protection system was centrally funded but delivered locally. The
Ministry of Labor and Social Affairs (MLSA) handled social assistance, the State Social Security Services (SSSS) managed
contributory social insurance and some noncontributory pensions, and the State Employment Agency (SEA) managed
employment-related benefits1. The Family Benefit Program (FBP), the largest means-tested social assistance program in
the country, constituted 0.8 percent of gross domestic product (GDP) and was crucial in reducing poverty, although
coverage was generally low.2 Other non-means-tested programs included social pensions, family allowances and disability
benefits. At the time, some efforts had initiated to increase targeting accuracy, reduce fraud and strengthen management
and monitoring of social assistance programs. In terms of labor markets, low-productivity and unemployment remained
an issue in the country, with deepened regional disparities as most investment and employment creation efforts were
focused on the capital. The SEA’s capacity was constrained in terms of staffing and resources allocated to active labor
market policies. The public pension system was undergoing major reforms that required consolidation. The capacity of
institutions for reforms in the areas of labor market, pensions and social assistance needed to be strengthened.
4. Armenia reacted to the global financial crisis by increasing social protection spending, focusing on social
insurance and social assistance. Post crisis, social insurance spending rose due to higher benefit levels and some increase
in coverage. The FBP and pensions were vital in mitigating poverty, cumulatively accounting for 60 percent of the extreme
poor’s income3. In the absence of an overarching social protection strategy, social policies were guided by existing laws
and sectoral strategies. In December 2010, Armenia adopted the concept of integrated social services, placing pensions,
social assistance, employment and disability benefits and services under one roof, introducing a joint reception area and
developing management information systems and case management procedures. This would improve experience and
outcomes of service users, and particularly of the most vulnerable (e.g. beneficiaries of the FBP) who face multiple
problems and are usually furthest away from the labor market. This reform, supported by the Social Protection
Administration II Project (SPAP II), was a key initiative to enhance effectiveness of social protection.
Theory of Change (Results Chain)
1 In 2021, the Unified Social Service (USS) agency was created to integrate the four agencies responsible for social assistance, pensions,
employment services, and disability benefits.
2 SPAP II PAD, based on the Integrated Living Conditions Survey (ILCS) data at the time of appraisal.
3 Armenia ILCS 2014.
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5. The Project Appraisal Document (PAD) did not explicitly describe a Theory of Change (ToC). 4 For this
Implementation Completion and Results Report (ICR), the project’s ToC is constructed ex post, retrofitted from the
project’s Results Framework, as presented in the original PAD (figure 1).
Figure 1. Theory of Change
Project Development Objectives (PDOs), Outcome Indicators and Components
6. The PDO was to (i) improve social protection service delivery and (ii) strengthen analytical and monitoring and
evaluation functions of the agencies delivering social protection benefits and services.
7. The key PDO-level indicators are the following:
• Client participation costs of receiving benefits and services of ISPCs
• Client satisfaction with benefits and services received through ISPCs
• Monitoring and evaluation capacity of the Ministry of Labor and Social Issues’ (MLSI)5 increased as
evidenced by gradual introduction of the M&E system for social protection programs (covering the
development of a model, indicators, project passports, software).
8. The project was originally organized around five components.
• Component 1—Roll-Out of Integrated Social Protection Service Delivery (planned World Bank credit US$14.3
million, actual spent US$14.78 million)—supported the expansion of integrated social protection service delivery
in territorial centers initiated under the SPAP, including civil works, furniture, IT equipment, drafting of legislation
and staff training for 37 Integrated Social Protection Centers (ISPCs). It also included civil works and other support
for central offices of the SEA and the SSSS.
• Component 2—Supporting the Implementation of the Employment Strategy by the Government (planned World
Bank credit US$2.2 million, actual spent US$0.25 million)—was designed to address challenges in the Armenian
4 According to the World Bank Guidelines, including the Theory of Change in PADs became mandatory as of May 2018. The Armenia Social
Protection Administration II Project (P146318) was approved by the World Bank’s Board of Directors on March 24, 2014.
5 The English translation and acronym MLSI was later replaced by Ministry of Labor and Social Affairs (MLSA), which was chosen by the Government
as the official name.
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labor market by strengthening the SEA through training and IT infrastructure, piloting targeted ALMPs, and
expanding career orientation and online consultancy programs.
• Component 3—Modernization of the Pension System (planned World Bank credit US$0.9 million, actual spent
US$0.03 million)—would support the SSSS in improving core business processes and upgrading IT systems,
developing fraud-and-error supervision software, and enhancing staff capacity.6
• Component 4—Strengthening MLSI Analytical Capacity and Monitoring and Evaluation Systems (planned World
Bank credit US$1.1 million, actual spent US$0.55 million)—aimed to strengthen the monitoring and evaluation
(M&E) unit and capacity within MLSI, develop an integrated M&E system for social protection benefits, and
conduct research on poverty and deprivations among vulnerable groups. It included IT equipment, software
development, and training for M&E specialists.
• Component 5—Project Management (planned World Bank credit US$1.3 million, actual spent US$1.67 million)—
financed the operation of the Project Coordination Unit (PCU) at MLSI, including training, project audit, and
operating costs, and partially, for certain periods during implementation, covered the staff time of the Foreign
Financing Project Management Centre (FFPMC), closed in 2019 for fiduciary activities. A summary of outputs and
activities financed through the project is presented in Section B of Annex 1.
B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)
9. The PDO remained unchanged for the duration of the project.
10. There were practically no revisions to the PDO indicators, except for adjustment of end target dates to align with
the project extensions. Several changes were made to intermediate results indicators (IRIs), to reflect technical
adjustments and other aspects of project restructurings, like the cancellations of Components 2 and 3. As the project
scope and ambition were not narrowed despite some cancellations, and both PDO indicators and the PDO statement were
not changed, this ICR will not employ split evaluation.
11. The project’s five original components were restructured on several occasions and two of the components were
cancelled during implementation. Component 3 (pensions) was cancelled in May 2020 and Component 2 (ALMP) was also
cancelled under the subsequent restructuring in October 2020. Several activities under these components had been
accomplished (for example, developing operational manuals for piloting two ALMPs), while others were moved to
complementary programs (like the JSDF project on Promoting Social Inclusion and Self-Reliant Livelihood Activities in
Armenia, P1653147), shifted to advisory and analytical support, or were handled by the Government of Armenia (GoA, in
the case of pensions), and their cancellation did not materially affect the PDO. Activities considered under those
components that related to trainings, IT infrastructure and software development were envisioned to contribute toward
both parts of the PDO and were redistributed to other outputs. 8 With the establishment of the USS in 2021, which
institutionalized a merger of a number of institutions providing different social benefits and services, including pensions
and employment support, the IT developments initially planned under Components 2 and 3 were then envisaged as part
of a broader unified information system (UIS) that would serve the integrated delivery of services in the territorial centers.
A summary of project costs, original and revised, by components is presented in annex 3.
12. The project was restructured seven times. A more detailed summary of the reasons for the restructurings is
provided in annex 8. Among the most important restructurings were those in May and October 2020, initiated at the
request of the MLSA. The May restructuring extend the project by 23 months, and cancelled the original Component 3
(‘Modernization of the Pension System’). The October restructuring cancelled Component 2 and US$600,000, which were
reallocated to another World Bank health project to support the construction of medical centers for the COVID-19
response. The sixth restructuring (November 2022) extended the project by 12 months to October 31, 2023, as a response
6 Both Components 2 and 3 were supplemental components with small amounts of financing that were included as additional contribution to the
institutional building objectives. During implementation, some of their activities were implemented through other instruments, and others were
integrated into Components 1 and 4. Eventually, Components 2 and 3 were cancelled (see section Revised Components for more details).
7 Japan Social Development Fund (JSDF) grant, administered by the World Bank.
8 See Rationale for Changes and Their Implication on the Original Theory of Change .
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to the delays caused by the COVID-19 pandemic and the conflict with Azerbaijan in 2020. The seventh (and final)
restructuring extended the closing date of the project by eight months, to June 28, 2024, to allow for the implementation
of emergency activities in response to the September 2023 crisis in Armenia with the influx of over 100,000 refugees. A
total of US$750,000 of project funds were allocated to emergency procurements under the existing components, leaving
approximately US$220,000 undisbursed. The total project extension was 66 months, from the original projected closing
date of December 31, 2018, to June 28, 2024.
13. The project restructurings did not fundamentally change the original ToC. The cancelled Components 2 and 3
complemented the main institutional building objective, which was grounded in the MLSA and social assistance. Both
parts of the PDO remained relatively well covered by Components 1 and 4, as well as through complementary analytical
and advisory services provided to the MLSA. This is also visible from the original list of project development indicators
(PDIs), which does not include indicators specifically or exclusively linked to Components 2 and 3. Thus, achievement of
the targets for the PDIs already established under the Results Framework was also not affected.
II. OUTCOME
A. RELEVANCE OF PDO
Assessment of Relevance of PDOs and Rating
Rating: High
14. Relevance at appraisal: High. The project was designed to contribute to several long-term objectives of strategic
relevance for Armenia that were identified in the Armenia Development Strategy for 2014–2025 (ADS)9 and the World
Bank’s Country Partnership Strategy (CPS) for the Republic of Armenia for FY14–FY17 (Report No. 81647-AM). The project
supported Engagement Area 2.3: Improved coverage and targeting of the FBP and efficiency of social service delivery
through providing integrated delivery of social services. The integration of services at the local level would contribute to
improve efficiency of delivery by means of shortening distances and reducing efforts for citizens to receive support from
different institutions (e.g. less places to visit in case of multiple needs, reduced number of documents to be presented,
more information about multiple measures at the same time, etc.). Improved coverage and targeting of the FBP were
addressed to some extent within Component 4 but also through other technical assistance activities complementing the
project. For example, analytical capacity was built within the MLSA to improve the targeting mechanism (formula and
operationalization) and the administration of the program with the aim of improving accuracy and coverage. The project
would also promote employment intermediation matching, thereby increasing labor market efficiency and promoting job
opportunities for vulnerable beneficiaries of social programs. In the course of implementation, some of these elements—
especially the ones related to labor market and pensions—became less prominent but were picked up by other projects
or institutional mechanisms.10 With jobs gaining importance under the new Armenia Country Partnership Framework (CPF
FY25–29, Report No. 186451-AM), approved by World Bank Board in January 2025), employment support may be the next
key element of social protection programs in Armenia.
15. Relevance at closing: High. The PDO remained highly relevant at closing, as the project is fully aligned with the
Armenia CPF FY25–29. The project is relevant to the CPF’s Objective 4: Improving Social Protection, under High Level
Outcome 2, ‘More Resilient Human Capital’. The Performance and Learning Review of the FY19–23 CPF11 confirmed the
9 Government of the Republic of Armenia. 2014. “Armenia Development Strategy for 2014-2025.” Annex to the Government Decree No. 442-N of
March 27, 2014. The ADS is built around four pillars: creating jobs, developing human capital, strengthening social protection systems, and
modernizing public administration and governance.
10 Technical assistance, including the Social Inclusion and Labor Knowledge (SILK) for Reforms, Operations and Advancing Dialogue Technical
Assistance and the programmatic Advisory Services and Analytics (ASA) for Strengthening Social Protection Systems in the Caucasus, provided to
the MLSA over the years supported the design and monitoring of policies in the areas of labor market regulations, ALMPs, and social assistance
(including the FBP) as well as revisions to the targeting mechanisms and support to the pensions reform. It was complementary to the technical
assistance on poverty analysis provided by the Poverty Reduction and Economic Management (PREM).
11 World Bank. 2023. Armenia - Performance and Learning Review of the Country Partnership Framework for the Period FY19-FY23
(English). Washington, DC: World Bank Group.
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relevance of SPAP II to the CPF Objective 7 (Improved access to social protection services and economic opportunities for
poor and vulnerable population) in terms of building the modern integrated social services.
16. On the GoA side, the project has been directly contributing to the Armenian Government Program for 2021 –
2026, which stipulates that state policy on labor and social protection will be implemented on the basis of a strategic
document that responds to the issues in this field. Until recently, Armenia had not had a comprehensive strategy,
although some attempts of development were made in the past. In 2021, the MLSA launched a thorough process of review
and development, with the support of the United Nations Children’s Fund (UNICEF), aiming to engage a wide range of
stakeholders in consultation and development. The Strategy of Labor and Social Protection is undergoing consultations
and sets the priorities of development in line with existing challenges and other obligations taken on by Armenia under
international agreements. To sustain the ongoing reforms, new Laws on Social Assistance and on Social Benefits were
approved. Other sectoral strategies have also been developed, some of which were recently approved including the
employment and the demographic strategies. The recent targeting reform, proposing a new Vulnerability Assessment for
all social assistance programs, is based on the abovementioned passed laws and relevant decree amendments have
recently been approved.
B. ACHIEVEMENT OF PDOs (EFFICACY)
Rating: Substantial
Assessment of Achievement of Each Objective/Outcome
17. The project efficacy is Substantial. Objective 1 (to improve social protection service delivery) is most closely
related to reducing the access costs of the beneficiaries, particularly of FBP beneficiaries who often require multiple
services at once, and to increasing their satisfaction with all aspects of the service delivery. While both indicators were
adequate to measure Objective 1, the initial target for the cost to access services was potentially too modest. Other
aspects of improved service delivery related to increased availability of services, accessibility for people with disabilities
and access to information, as well as to better working conditions for staff. Objective 2 (strengthen the analytical and
monitoring and evaluation functions of the agencies delivering social protection benefits and services) is primarily linked
to increasing the analytical and M&E capacity of the MLSA. This can be noted in the indicator chosen to report on that
objective, which directly refers to the capacity of the MLSA. Other participating institutions were also considered, like the
pension and labor and employment institutions (before the USS merge) or the National Institute of Labor and Social
Research (NILSR). However, their role was seen as small, as reflected in the modest amount of financing and their absence
from the PDO-level measurement framework.
18. Highest importance in terms of contribution to the PDO can be attributed to the fact that territorial centers
financed through SPAP II allow for an integrated delivery of social protection benefits and services in the same location.
The project financed the physical integration of the services by constructing or renovating buildings, thus improving the
experience for clients and working staff who, in turn, provide better services. All three PDIs were achieved:
• Client participation costs of receiving benefits and services, according to the latest survey results, is AMD
880, and the target of below AMD 2,476 has been fully achieved (cost is higher than the AMD 709 measured
in 2018, but accounting for inflation over 2018–2023, the cost is in fact lower).
• Client satisfaction with benefits and services received through existing territorial centers (or ISPCs) has been
at the level of 76–91 percent (76 percent being the lower boundary of the satisfactory range and 91 percent
the higher) and is considered substantially met (with end target being “almost all clients satisfied”).
• Progress on the increased M&E capacity is notable, with monitoring methodology, passports, 12 and
indicators for all social protection programs developed.
19. While components on pension and employment services were removed during restructurings, the World Bank
continued supporting the MLSA through other instruments in those focus areas. The dialogue on pensions and labor
markets continued through technical advice (ASA), for instance on revisions to the pensions model and technical support
12 ‘Passports’ refers to descriptions for M&E of the effectiveness of the social programs implemented through the MLSA.
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to improve public employment services delivery, job matching, or the production of the Jobs Diagnostic report, among
others. While there could have been opportunities to further invest on ALMPs through the project, the Government at
the time decided to prioritize the co-location goal, the constructions and renovation of buildings, the development of the
UIS, and to focus on improving service delivery within the territorial centers. The Promoting Social Inclusion and Self-
Reliant Livelihood Activities in Armenia (P165314) project supported self-employment and activation by increasing access
of FBP beneficiaries to livelihood opportunities through case management interventions.
Objective 1: To improve social protection service delivery
Rating: Substantial
20. PDI 1 - Beneficiary participation costs of receiving benefits and services at the Unified Social Services Territorial
Centers (USSTCs13) had a planned target of beneficiary expenses for accessing the service of less than AMD 2,476. The
intermediate value of AMD 710, based on the 2018 survey, means that the project reached the predetermined target
value (table 1). According to the 2023 survey, currently the cost amounts to AMD 880.14 The slight increase since the
intermediate value is logical because the indicator value is nominal and influenced by inflation in recent years.
Nevertheless, this indicator’s target was surpassed three times. The project managed to significantly reduce the costs for
beneficiaries associated with receiving benefits and services from the USSTCs (at one location), compared to the costs of
receiving services at multiple locations, as was previously the practice. The analysis of the final evaluation showed that
the average weighted cost for one visit to integrated centers was AMD 616, whereas it amounted to AMD 834 or 35
percent more to visit nonintegrated centers. Besides the monetary costs, during the surveys, clients of the USSTC reported
being able to apply for and make use of more services at once while spending less time and less resources on average.
Table 1. Outcomes for Objective 1
# PDO Indicator Baseline Original Target Revised Target Actual Value at Closing
PDI 1 Client participation costs 3,026 2,476 — An amount of AMD 880 was spent by a
of receiving benefits and beneficiary per visit to the center (Data
services of ISPCs (for FBP) source: Survey for the final evaluation of
the project)
PDI 2 Client satisfaction with n.a. Almost all — Between 76% and 91% of the beneficiaries
benefits and services (ISPCs clients satisfied are satisfied with opportunity to receive
received through ISPCs piloted) several services under one roof (Data
source: Survey for the final evaluation of
the project)
21. Overall, in 2018 and 2023, services provided at the territorial centers were considered useful for the
beneficiaries surveyed (89 percent and 87 percent, respectively). At the time of this ICR, all 32 territorial centers are fully
operational. In 2018, when all the centers were not yet fully renovated, the usefulness of service provision was assessed
positively by 97 percent of respondents in integrated and collocated centers as opposed to 80 percent in nonintegrated
ones. According to the 2018 and 2023 surveys, at least half of the beneficiaries agreed that the establishment of USSTCs
contributed to a number of positive outcomes. In 2023, 74 percent reported that services had a positive financial impact
on their families and at least 60 percent of the beneficiaries indicated that the establishment of the USSTCs would
significantly reduce bureaucratic hassle and contribute to saving time, increasing the quality of social services,
responsiveness to needs and transparency, as well as access to other social services outside the center.15 The majority of
beneficiaries noted that their issues were addressed at the USSTCs, particularly those related to social security, social
13 Territorial Centers were called Integrated Social Protection Territorial Centers (ISPCs) until the establishment of USS in April 2021, after which
they were called USS Territorial Centers (USSTCs).
14 In 2018, the survey was conducted by the NILSR under the RA MLSA and with the support of UNICEF. In 2023, the survey was conducted by an
external consultant for the final evaluation of SPAP II.
15 It should be noted that the questionnaire used in 2023 was an improved version of the one in 2018 and therefore comparisons must be made
carefully.
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assistance, and medical-social issues. The most frequently unresolved cases were those related to employment, mostly
due to the lack of appropriate vacancies. Surveyed beneficiaries also believed that the integration of social services would
contribute to the provision of a larger set of services offered outside of the centers (by private providers and other civil
society organizations).
22. PDI 2, Beneficiary satisfaction with benefits and services received through USSTCs, is assessed as achieved. The
indicator had a value of 69 percent, based on the results of the 2018 survey. This value was calculated and later reported
in monitoring documents based on the 2018 survey question “Has USS made it easier to receive social services?” However,
analysis of both questionnaires for the final reporting suggested that the PDI would be better reflected by analyzing the
answers to a different question: “How satisfied are you with the quality of provided services?” Thus, based on this
question, between 76 and 91 percent of beneficiaries reported to be satisfied with the current option of receiving
integrated social services under one roof and through ‘one window’. 16 Analyzing the answers to that same question in
2018, as an intermediate indicator, it can be asserted that in 2018 (5 years before the 2023 final evaluation), approximately
87 percent of the beneficiaries were satisfied with the social services provided through USSTCs.17 To more accurately
reflect beneficiary satisfaction across a range of service areas, table 2 presents overall improved satisfaction broken down
by different elements of the service provision. Overall, the vast majority of respondents in both years, stated that the
services provided at all types of centers were useful.
Table 2. Beneficiary Satisfaction by Service Element (%)a
Survey Questions 2018 2023
The employees are professional and have complete knowledge of their work. 84 93
The employees are friendly and polite. 83 94
Social services are provided quickly and effectively, without any hassle. 76 93
My issue was resolved without bribes, gifts, or extra expenses. 82 95
My issue was not resolved, but as a result of the explanation given, I fully understood why. 18 26 20
To resolve my issue, I communicated only with the employees, there was no need to go to the manager
79 96
(head) to complain.
Note: a. Information in the table should be interpreted as follows: For example, in 2023, 93 percent of the beneficiaries believed that the employees
of the USSTCs were professional and had complete knowledge of their work, whereas in 2018, only 84 percent of beneficiaries were of such opinion.
The same set of data explains that any dissatisfaction of the beneficiaries may have been more related to the lack of adequate job vacancies or a
communication issue. It appears that clients were unable to fully understand the explanation whenever their issue (often related to lack of
employment opportunities) was not resolved on the spot, at the territorial center.
Objective 2: To strengthen analytical and monitoring and evaluation functions of the agencies delivering social
protection benefits and services
Rating: Substantial
23. Objective 2 was contributing to the higher-level objective of improved social protection efficiency through
strengthening institutional capacity, particularly of the MLSA. The PDI for this objective (table 3) aimed at increasing
M&E capacity but was specific in terms of the sought outputs, which are mentioned in the very wording of the PDI. As
described in the Core Diagnostic of the Social Protection System in Armenia, 19 the project supported the development of
an M&E framework with monitoring passports and indicators for all social programs implemented by the MLSA, as basic
steps toward establishing the culture and practice of M&E in the sector. These indicators are now successfully used by the
employees of the Analytical, Monitoring, and Evaluation Department of the ministry, as well as the NILSR and the USS, in
the monitoring of budgetary and social programs. This enabled the MLSA to streamline the indicators and methodology
16 In 2023, the answers offered to respond to this question were: 1. Fully satisfied; 2. Partially satisfied; 3. Neither satisfied, not dissatisfied. 4. Not
so satisfied, 5. Not satisfied at all. Response 3 cannot be clearly assigned to satisfaction or dissatisfaction, thus the proposed interval. The 76%
represents those individuals responding 1 and 2, while the 91 percent represents those responding 1, 2 or 3.
17 In 2018, the answers offered to respond to this question were: 1. I am satisfied. 2. I am dissatisfied.
18 Comparative analysis of the data across years suggests that this question was not asked in the same way in 2018 and in 2023.
19 UNICEF/The World Bank. 2020. Core Diagnostic of the Social Protection System in Armenia .
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for monitoring the implementation of its policies on the ground (both in terms of impact on the general population as well
as on the most vulnerable target groups, and including gender sensitivity throughout), analyze possible reform options
and their impacts, adjust policy solutions, and eventually increase efficiency of the system of social protection. Terms of
references for the electronic M&E system were developed but then a decision was taken by the GoA to incorporate this
development into that of the UIS. Subsequently, the development of the UIS took longer than expected and met some
procurement and legal hurdles. Although the project has closed, the plan is for the UIS to pick up the M&E dashboard and
any missing elements are likely to be implemented.
Table 3. Outcomes for Objective 2
# PDO Indicator Baseline Original Target Revised Target Actual Value at Closing
PDI 3 M&E capacity increased as 5 piloted Develop monitoring — Developed monitoring
evidenced by gradual programs passports and indicators passports and indicators for
introduction of the M&E for all MLSI programs all MLSA programs financed
system for SP programs financed from the state from the state budget
(covering the development budget;
of a model, indicators, Develop electronic Partially developed
project passports, software) system (receiving electronic system (receiving
reports for all indicators) reports for all indicators)
24. Development of training content on the ongoing reforms, capacity building activities and analytical pieces on
various social protection reforms further contributed to achieving Objective 2. The project envisaged analytical capacity
building around both quantitative and qualitative M&E methodologies. A methodology for collecting qualitative data was
developed and integrated as part of the usual practices of the MLSA and the NILSR, and the staff of both institutions were
trained on it. Training materials on the integrated service delivery reform and other critical operational practices such as
case management, were created and taught during several training sessions and for an e-learning platform currently being
developed with European Union funds. The project also supported two data collection processes crucial to improve the
targeting formula and to analyze the integration reform’s latest progress, leading to recommendations for better targeting
and adjustments to service delivery in the territorial centers. Continuous training and capacity building activities for MLSA,
NILSR, and ISPCs staff were conducted. Research on poverty and deprivations contributed to annual poverty statistics in
Armenia. IT equipment, software development, and training of the MLSA’s M&E specialists were also provided.
25. The UIS represents the cornerstone of the integrated services reform, and a first core module was put into place
by connecting existing information systems for unified applications. This first module (the AMS, application management
system), to be used at the reception area of territorial centers, enables automatic verification of beneficiaries’ information
and of eligibility for the FBP benefit, based on a revised targeting formula. In the process of its development, analytical
capacity was built within the MLSA on targeting and benefit formulae, interoperability procedures and administration of
programs as part of the integrated model (e.g. on the join reception and business processes). The UIS supports various
social protection functions, connecting platforms previously considered under all Components of the project, and
therefore contributing to the project’s objectives. The full scope of the UIS was only defined in 2021, with the first core
module crucially integrating and digitizing applications’ process, reducing paperwork and bureaucracy for both clients and
social workers, and enhancing eligibility determination. By the time of project closing, the AMS development was
completed, tested and expected to be launched during the first quarter of 2025, after the approvals of several regulatory
adjustments that took place in 2024 (revised Laws of Social Assistance and on Social Benefits, and amendments to the
program decree). The Government is progressing on the remaining elements of the UIS, including the purchase of servers,
the development of case management system and other related modules. In the meantime, the integrated services are
fully operational using the available in-house systems and modules, providing the full array of services to the beneficiaries.
26. It should also be noted that the advancements under Objective 2 were quite meaningful as they were achieved
with a relatively small amount of financing. Objective 2 was supported mainly by Component 4, which had an allocation
of around US$0.5 million. In addition, several elements that carried synergies with Objective 2 were supported by
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Component 1 and other Bank-financed activities. For instance, the Promoting Social Inclusion and Self-Reliant Livelihood,
mentioned earlier, assisted the MLSA in establishing a structured social case management approach to integrated services.
It developed key documents for case management and provided trainings to social and case workers. Strategic outreach
and a policy-level communication campaign were also developed and complemented SPAP II work.
Justification of Overall Efficacy Rating
27. With both parts of the PDO substantially achieved, efficacy is rated Substantial. The costs for clients to access
the system of social protection were reduced and client satisfaction increased. Staff satisfaction with the job and
motivation among social workers also increased, which, in turn, could translate into better service and client satisfaction.
The newly established or renovated territorial centers offered improved infrastructure, including against seismic shocks,
new furniture and equipment, and improved accessibility for people with disabilities. It is important to note that the MLSA
territorial centers were the first point of contact for over 100,000 refugees that were displaced into Armenia in 2023,
serving to identify their most essential needs and quickly activating cash support for them. Similarly, developed and
developing IT improvements are expected to enhance service delivery by further reducing the paperwork for social
workers and the cost burden on beneficiaries. In parallel, while the M&E electronic system was not fully developed, the
M&E capacity of the social protection system has been further built, enabling more informed and faster managerial
decisions and design adjustments for the programs.
C. EFFICIENCY
Assessment of Efficiency and Rating
Rating: Modest
28. Overall efficiency is rated Modest. The project was extended by 66 months, for a total of 10 years. Until the
midterm review in 2017, there were considerable delays in executing civil works, mainly due to long processes for
identifying plots and transferring the land to the MLSA. Once land ownership issues were resolved for most centers,
implementation pace improved significantly during 2017–2020, with some hiccups during the transfers of the fiduciary
responsibilities (in 2019). Toward the end of project life, additional external factors such as recurrent conflict and COVID-
19 further affected completion. Construction was eventually successfully completed for 32 of the 34 centers and the
objectives were met, although the extended implementation duration has affected overall efficiency. A detailed efficiency
analysis is presented in annex 4.
29. With this being said, SPAPII has directly contributed to two major SP reforms in Armenia that are expected to
bring significant efficiencies to the sector. SPAPII directly supported the implementation of the integrated social services
reform and of the new vulnerability assessment, thus also contributing to improvements of the FBP, as the main cash
transfer program in the country. With the renovation of territorial centers around the country and the integration of
benefits and services under one roof, coupled with IT tools, efficiency gains were realized both on the side of the users of
social services (particularly for the most vulnerable, like the FBP beneficiaries) and on the side of the government.
(i) Efficiency gains for clients of the territorial centers
30. Beneficiary evaluations during the project indicate that renovated territorial centers reduced the overall costs
to beneficiaries of accessing services. In 2023, beneficiaries spent an average of AMD 880 during their last visit to USSTCs,
compared to AMD 710 in 2018, which, accounting for inflation, is the same or slightly lower cost in 2023. Moreover,
comparing beneficiary costs for the integrated and non-integrated centers in 2018, the beneficiaries spent AMD 630 on
visiting integrated territorial centers, and AMD 900 in case of non-integrated centers. These expenses include
transportation, document collection, and other related costs. Additionally, in 2023, beneficiaries' expenses for the
complete solution of their issues, including all necessary visits, averaged AMD 1310. According to the results of both the
2018 and 2023 surveys, most beneficiaries at integrated centers (89 percent and 86 percent of respondents respectively)
could easily determine where to apply regarding their issue when entering the center. In both surveys, half of the
beneficiaries reported having no difficulty getting to the territorial center although the number of individuals facing
difficulties reaching the center increased in 2023 compared to 2018. In 2023, the majority of beneficiaries (74 percent)
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reported reaching the centers within one hour. The surveyed beneficiaries mainly received services at their place of
residence, with 81 percent of respondents in 2018 and 71 percent in 2023 selecting this option.
31. Besides the unified support in territorial centers, the implementation of the new vulnerability assessment is
expected to bring efficiency gains to both beneficiaries and staff in the reception area. The AMS (Application
Management System), expected to be launched in the first quarter of 2025, exchanges data with internal and external
databases, collecting information included in the benefit application, reducing the number of verification documents to
be presented and therefore saving time to both clients and social workers, who previously had to verify them. Moreover,
if all required information is available from the data exchanges, the AMS allows for automatic verification of the benefit
eligibility, facilitating shorter benefit application processing time.
(ii) Efficiency gains for the Government
32. The co-location of services has likely provided cost reductions for national and local budgets. With the
construction of new territorial centers and the establishment of the USS, the MLSA reported savings on renting costs for
buildings where services were previously offered by four different institutions. As a result of the establishment of the USS,
the MLSA is working on functional models that promote collaboration between the different specialists within a center
and consistent management control. While early to assess, the process of colocation of services is expected to reduce
redundancies in administrative functions, staffing and data management, for example in the reception area. While there
has been no specific analysis on the implied savings, similar reforms in other countries have generated cost savings. The
literature suggests that integrating public services could result in important efficiency and effectiveness gains, by
improving outcomes and experience for users, particularly for those with complex needs like the FBP beneficiaries. 20
Internationally, faced with reduced public budget, governments across the world are promoting local service integration
and co-location as a means of cutting public spending and improving service outcomes. Recommendations to the public
sector promote co-location as a major cost-saving initiative (Kearney 2005;21 Dunleavy 2010).22
33. According to the 2023 Public Expenditure Review (PER),23 overall social assistance benefits were found to be
cost-effective and their coverage has increased significantly in recent years. Social transfers remain an important tool
for poverty reduction.24 If payments of social transfers (pensions and monetary social assistance) were stopped and the
poor were not able to compensate for this loss from other sources, poverty would increase from the current rate of 23.7
percent to 50.4 percent. While pensions constitute the largest program, the role of social assistance – and more specifically
that of the FBP – in helping the most vulnerable households overcome poverty is significant. Total coverage of the FBP
demonstrated fluctuating trends since 2019 and was 11.3 percent in 2023. Nevertheless, FBP’s coverage of the poor grew
from 25.6 percent in 2019 to 29.1 percent in 2023. The new vulnerability assessment and other ongoing reforms in the
sector are expected to impact social expenditure efficiency. Some of these positive outcomes can be attributed to the
project’s activities that aimed at improving service delivery, capacity, and targeting. Enhanced monitoring and verification
procedures are also being introduced. With these enhancements, key results and efficiency gains are expected over time,
including better data verification capabilities, means-based assessment of household welfare, reduced paperwork, faster
processing times, and better ability to update information when household circumstances change.
34. Administrative Efficiency was relatively modest, with percentage of administrative expenses remaining constant
for the duration of the project, at 9.8 percent of the total project expenditures. Despite the prolonged project duration,
the allocation for operational costs within the project portfolio remained largely unchanged (a minor increase from USD
1.65 million to USD 1.67 million). Operational costs were financed within component 5, through the provision of consulting
services, training, independent audit of the project, seminars-discussions, as well as other operational costs of the PCU.
20 Adams, D. and Hlodver Hakonarson, 2024. An Integrated approach to service delivery for people with multiple and complex needs. OECD.
21 Kearney, A. (2005) Shared Services in Government: turning private sector lessons into public sector best practices.
22 Dunleavy, P. (2010) The future of joined-up public services. ESRC.
23 The World Bank. 2023. Armenia Public Expenditure Review: Improving Spending Efficiency.
24 Armstat Poverty Snapshot 2021.
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D. JUSTIFICATION OF OVERALL OUTCOME RATING
Rating: Moderately Satisfactory
35. The overall outcome rating is Moderately Satisfactory, based on the High relevance of the PDO objectives,
Substantial efficacy, and Modest efficiency. The costs to social protection beneficiaries were reduced through services’
integration and modernization, and client satisfaction increased, albeit initially only marginally. The project also partly
increased the M&E capacity of the involved agencies, including the MLSA, USS, and NILSR, thus improving ongoing
program adjustments. Despite these benefits, efficiency, assumed to be at least modest, was below expectations mainly
due to external factors. For the Armenian context, the project offered good use of funds in terms of value for money. Last
but not least, the PDO remained relevant throughout project implementation.
36. The project made significant progress in integrating and modernizing benefits and services through – among
other things - IT systems to digitize the application process for benefits and services. These advancements are expected
to streamline processes, reduce bureaucratic hurdles, and enhance overall service efficiency. Additionally, continuous
training and supervision of staff in USSTCs contributed to increased staff satisfaction and motivation, further improving
service quality. The project also partly contributed to the processes of modernizing the information system for the
employment sector and upgrading the pension information system. These improvements, along with research activities
on poverty and deprivations among vulnerable groups, informed policy adjustments in service delivery and enhanced
targeting of social assistance programs. Overall, the substantial achievements in reducing client costs, increasing
satisfaction, and enhancing IT and M&E capabilities justify the substantial efficacy rating.
E. OTHER OUTCOMES AND IMPACTS
37. Gender. According to the recent Country Gender Assessment (CGA),25 Armenia has made important progress in
developing an adequate framework for the promotion of gender equality in the past years. The CGA reflects the priorities
set forth in the Armenia Gender Strategy 2024–2028, as well as with major strategic objectives of the World Bank’s Gender
Strategy 2024–2030, where SPAP II activities can be seen as contributing to elevating human capital through building
resilience in health, education, and social protection and to expanding and enabling economic opportunities for women.
Through ISPCs, women as heads of vulnerable families were able to more regularly and predictably receive benefits, save
time on administrative procedures, and get access to some economic opportunities. Three of the IRIs included gender
disaggregation (pensioners, job seekers, and unemployed). The latest achievements indicated that there was a higher
share of women representing these groups, suggesting they are benefiting from the services provided in the territorial
centers. The project beneficiary surveys also recommended some measures to improve the targeted servicing of women,
which may stimulate respective legislative changes.
38. Institutional building and strengthening were part of the PDO and were substantially achieved (more details in
section on EFFICACY). The project supported a significant number of technical assistance activities (targeting, data
collection to test formula, and IT development) that contributed to crucial reforms in the country, included and considered
under the “Green, resilient and inclusive DPO.”26 A monitoring exercise to track all 80 social protection programs was
developed between 2016 and 2018 with SPAP II financing. In addition, 17 social protection legislative and regulatory
initiatives received technical support from SPAP II. These included, for example, support for the development of the Law
on Social Assistance and on Social Benefits, a decree “On defining the procedure for exercising the powers of territorial
bodies providing social services” and decrees on certification of specific services, model charters of social assistance
territorial agencies, among others. For a full list of supported activities, see Annex 7.
39. Poverty Reduction and Shared Prosperity. The project interventions contributed to poverty reduction and shared
prosperity in Armenia. Component 1 was a key driver of certain improvements in delivering the full range of social
protection programs, including the largest social assistance one—the FBP. Systemic improvements related to targeting,
catalyzed through Component 4, were also important and can be expected to have a positive ripple effect over time. In
25 World Bank. 2024. Armenia Country Gender Assessment. P179877.
26 Programmatic DPO Series “Green, resilient and inclusive DPO.” (P176278, P179849)
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2010–2016, one of the main drivers of poverty reduction was social protection (3.7 percentage points), right between
wages (4.9 percentage point reduction) and employment (2.5 percentage points). 27 Overall and compared with other
countries in the Europe and Central Asia region, Armenia was spending a relatively low share of its GDP on social
protection—around 7.2 percent of GDP in 2021.
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME
A. KEY FACTORS DURING PREPARATION
40. The technical rationale for the selection of project activities was based on the experience of middle and high-
income countries with the integrated service model, with evaluations showing benefits to both the provider
(Government) and beneficiaries. An attempt was made to appropriately tailor activities to Armenia’s economic
circumstances and its aspirations to provide high quality and efficient social protection services. Regarding the rollout of
the integrated service model (Component 1), over several years preceding project approval, the MLSA had developed
standard procedures related to the design and creation of integrated centers and had piloted the model. The project drew
from these pilot experiences and was prepared on the basis of its predecessor, the Social Protection Administration Project
(SPAP, P087620), which financed renovations and construction of 19 territorial centers. The ICR for SPAP 28 noted that
while substantial implementation challenges and risks existed, there were no unusual technical aspects, and all proposed
activities were based on well-documented international experience in social protection administration reforms.
B. KEY FACTORS DURING IMPLEMENTATION
Factors within the Control of Government and/or Implementing Agency
41. The social services administrative reform implemented during the project significantly impacted its authorizing
environment. In 2021, the reform on integrated social services led to the creation of the USS by merging several agencies.
This centralized entity unifies the administration of benefits and services and represents the operating arm of the MLSA.
While the USS represented the institutional framework that best aligned to the project objectives of integrated service
delivery, it also required time to fully establish as a new entity, leading to additional implementation delays. Before USS,
the MLSA was already renovating and constructing centers to co-locate services. Post-creation, USS held decision-making
authority but faced uncertainties in role divisions among social workers in the USSTCs (reporting to the MLSA) and
community social workers (deployed by municipalities, and therefore reporting to the Ministry of Territorial
Administration and Infrastructure, MTAI). Lack of IT tools to integrate the back office and high staff turnover due to low
salaries also posed challenges, directly affecting certain project activities. The creation of the USS generated significant
institutional and adaptation challenges, which the GoA is gradually addressing.
42. Certain changes to implementation arrangements during the project caused some slowdowns but did not affect
overall achievements. There were consecutive changes in the implementing agencies for fiduciary arrangements. While
somewhat disturbing to the regular pace of implementation, these changes tested alternative approaches to project
management within different government structures. These changes may have had an overall neutral or even positive
impact on streamlining processes and internal communication.
43. Administrative and legal issues related to construction could have been better planned. Legal and bureaucratic
procedures for land ownership transfer and construction permits delayed site preparations, particularly in the first three
years. Strong inter-agency consultation mechanisms are needed to ensure timely preparation and documentation and
avoid construction delays (see Lessons and Recommendations).
Factors outside the Control of Government and/or Implementing Agency
44. Political situation. Significant political changes took place in Armenia during the project. In the spring of 2018,
the Velvet Revolution led to a new government committed to anti-corruption, improving governance, transparency, and
27
Armenia Country Economic Memorandum, Draft 2024.
28
Implementation Completion and Results Report for Armenia: Credit and Additional Financing for a Social Protection Administration Project (Loan
Number AM7848), Report Number ICR2880, 11/27/2013.
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accountability in Armenia. The 2019 government program focused on boosting economic growth, improving public
administration efficiency, increasing human capital, and strengthening access to infrastructure. SThe political changes led
to some revision of priorities, as well as to understandable delays in implementing activities that had been initiated before
the changes.
45. COVID-19. The 2020–2022 period, which was key for project completion, was marked by the COVID-19 pandemic,
affecting project implementation, causing delays in the completion of field activities. Furthermore, the combined impact
of COVID-19 and the conflict (see below) hindered social workers’ duties, delaying the USS reform.
46. Conflict. The situation around and within Armenia remained volatile during the project. The conflict with
Azerbaijan in 2020 and the influx of over 100,000 refugees into Armenia in 2023 strained the MLSA’s capacity. This event
triggered an exceptional last extension, to address the most urgent refugees’ needs, especially for those with some form
of disability.
IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME
A. QUALITY OF MONITORING AND EVALUATION (M&E)
Rating: Substantial
47. M&E Design. The project’s Results Framework was overall well-structured and contained a base set of indicators
to measure the project impact. The PDIs effectively described the PDO and were supported in more detail by the IRIs. The
set of indicators were a reliable source of outcome information, even though two of the PDIs relied on new data collection
which was challenging to obtain given the slow pace of reforms and the changing political circumstances. Moreover, the
final target for the beneficiaries’ cost of access to services may have been too modest given the results obtained over
time. Overall, the ToC was clear and could be derived from the Results Framework and the narrative, although the PAD
would have benefitted from a focused ToC description or diagram. The M&E Results Framework was appropriately
designed and planned for necessary institutional arrangements and evaluation tools. However, in hindsight, some more
focused PDIs could have been used to measure the impact, especially on the improvements to the service delivery.
48. M&E Implementation. The PCU provided regular progress updates on project activities. Over the life of the
project, the M&E officers, engineers, and other PCU staff continued to implement their regular oversight monitoring and
produce related reports. The capacity of the monitoring team somewhat fluctuated, with some staff turnover and
prolonged periods without a PCU M&E specialist but, overall, that did not hinder the basic M&E functions. While there
were occasional delays due to non-automatized processes, the Results Framework updates were provided and adjusted
as needed in response to the changing circumstances. The main planned evaluation studies were procured and conducted.
The first beneficiary survey was conducted with UNICEF support, accompanied by a process of broad and open
consultations with the World Bank and partners. A second survey29 was conducted in 2023, and the questionnaires were
adjusted between the first and the second survey, but all effort was made to make the results compatible, which provided
a good basis for comparison.
49. M&E Utilization. Data on project indicators were regularly collected and reported and used for decision-making,
adjustments (restructuring), and planning. As a result of the M&E practices, adjustments to the program were made,
including updates to targets and changes to project activities. In hindsight, some adjustments to the indicators could have
been made during the restructurings that cancelled two components.
Justification of Overall Rating of Quality of M&E
50. Overall, the M&E quality was borderline Substantial. More focused PDIs could have been designed to measure
the impact on service delivery. While there were moderate shortcomings in the M&E implementation, the design was
appropriate and contained necessary elements to monitor activities and assess the achievement of objectives. The
counterparts collected and shared information, although with delays related to PCU changes and extended internal
29The survey of USS beneficiaries was carried out in 2018 by the MLSA National Institute of Labor and Social Research with the support of UNICEF.
For the purpose of the final assessment, a second survey was conducted in 2023 by an order of MLSA using the same (adjusted) methodology.
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processes to get the data. At times, the MLSA used the information to improve project management and performance,
for example, by proposing changes to some IRIs to better reflect the investments on integrated provision of services.
B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE
Rating: Substantial
51. The project rating on environmental performance was Satisfactory at project closing, with no major issues
during the whole term of implementation. Despite temporary staffing issues, the PCU stayed committed to submitting
the monitoring reports and promptly handling any issues arising during implementation. The project GRM was available
throughout implementation. People dissatisfied with project-related activities could provide feedback or lodge complaints
at any stage of the process, either in writing or verbally, to the contractor at the local level or to the PCU through various
channels such as the MLSA hotline, email, the project’s social media page, and the e-request.am portal. The PCU’s social
and M&E specialists served as focal points for receiving, screening, recording, and following up on all complaints.
52. The financial management (FM) and procurement arrangements under the project were adequate and
acceptable to the World Bank, with no overdue audits. The project’s FM arrangements, including planning, budgeting,
accounting, financial reporting, internal controls, funds flow, and external auditing, were overall satisfactory and
acceptable to the World Bank throughout the duration of the project. Project procurement was also satisfactory during
implementation. It was managed by an experienced consultant, skilled in implementing World Bank-financed projects and
operating the Armenian Electronic Procurement System (ARMEPS) and Systematic Tracking of Exchanges in Procurement
(STEP) systems. The last procurement post review was conducted in January 2023, and the procurement performance and
risk were assessed as Satisfactory and Moderate, respectively. Somewhat frequent changes in operational arrangements
and staffing, and lengthy internal procedures at times affected the procurement and contract execution processes.
Eventually, these were resolved and did not materially affect the achievement of the PDO.
C. BANK PERFORMANCE
Quality at Entry: Moderately Satisfactory
53. At the time of preparation, the World Bank team collected necessary data and conducted technical assessments
of the support options, following SPAP I. As a result, the project design provided a stable basis for project implementation,
although the initially proposed project duration was perhaps shorter than necessary, and non-key activities were included,
which diverted some of the project implementation energy. On substance, the project opted for innovation in institutional
mechanisms. The choice of the Investment Project Financing (IPF) modality was at the time the most appropriate
instrument for providing the necessary IBRD funds. The overall project risk at appraisal was assessed as substantial.
Individual risks were realistically assessed, and appropriate mitigation measures were proposed. Implementation capacity,
as well as fiduciary risks, were substantial but were managed with care and no excessive risks materialized.
Quality of Supervision: Satisfactory
54. Overall, the World Bank’s support remained responsive to the needs, and crucial to achieving country, World
Bank, and global development objectives. A new CPF (FY25–FY29) outlines the World Bank Group’s strategy to support
Armenia in achieving its development goals. The World Bank’s assistance helped in closing knowledge and financing
gaps, and producing critical inputs for policy reforms aiming at enhancing social protection effectiveness. During
implementation, there were no major changes to the objective setting circumstances or requirements to shift the
implementation modality to retain relevance. When the project was rated Moderately Unsatisfactory, the World Bank
reacted through intensified supervision and accompaniment as well as complementary technical advice. The World Bank
was flexible in allowing adjustments to the use of available funds and restructuring options to support the GoA during
crisis periods (e.g., COVID and conflict), and was quick to react to challenges, as evidenced by the multiple necessary
restructurings. The World Bank adjusted team composition and provided additional capacity-building as needed.
Justification of Overall Rating of Bank Performance
Rating: Moderately Satisfactory
55. The overall rating for Bank performance is Moderately Satisfactory. The due diligence and analytical work at the
time of preparation generated a working project design, which, ideally, could have been more streamlined. Overall
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implementation support was proactive and engaged, acting in a complex environment with multiple agencies (MLSA, USS,
NILSR) as well as central and local-level entities involved. The World Bank team was supportive in times of crises, allowing
the project to adjust—and the GoA to respond— to shifting demand for support. The COVID-19 pandemic and the
humanitarian crises were prime examples of the Bank’s ability to respond to the client’s needs.
D. RISK TO DEVELOPMENT OUTCOME
56. The risk to the project’s development outcomes is Moderate. The GoA remains committed to the PDO and to
completing any remaining steps of the reforms, including the information systems activities. The integrated service
delivery model is already established in a stable legal framework and physical infrastructure, which suggests a good level
of sustainability. Budget allocations for social protection are also provided annually and are considered a priority by the
government. The GoA is also committed to further improving efficiency of social service delivery and strengthening the
analytical and M&E functions of the agencies delivering benefits and services. However, Armenia is prone to various crises,
including conflict and climate challenges. Addressing the humanitarian needs and social challenges of the over 100,000
refugees is putting significant pressure on Armenia’s fiscal balance and the social protection system in general.
V. LESSONS AND RECOMMENDATIONS
57. Construction projects require realistic time calculations from the outset. Despite initial estimates based on the
previous SPAP, construction of integrated service facilities requires interinstitutional coordination, which is time-
consuming. Construction and refurbishments need to be planned with a buffer, particularly when land ownership transfers
are considered. SPAP II spent considerable time on land transfers, obtaining the relevant government decrees, and
processing permits. In addition, even small works and local procurements tended to take longer than initially planned.
58. Effective MLSA and stakeholder consultation mechanisms are crucial for smooth project implementation. Active
participation of the technical teams in the MLSA and USS and other key stakeholders was needed for reviewing and
providing feedback, especially on construction and procurement. Open and constructive discussions on project
deliverables and challenges, along with administrative bottlenecks, can inform future policy decisions, including scaling
up and/or reshaping existing support measures and programs.
59. Leveraging in-house technical capacity while minimizing administrative and bureaucratic delays is crucial.
Projects should aim for cost-effective and timely outputs, using internal resources where possible and contracting out
when more efficient. Although MLSA possesses the technical expertise to carry out several project activities, internal
administrative processes caused delays. To mitigate this issue, World Bank and client’s internal procedures should be
streamlined early on, simplifying approval workflows and reducing redundant documentation, allowing for more efficient
use of the existing capacity, and ultimately improving project timelines and outcomes.
60. Staff planning and staff retainment plans are essential during institutional restructuring. With the establishment
of the USS, a high turnover of the staff was among the key challenges, requiring quick training deployment and alternative
retention strategies. The continuous reform necessitated revisiting the training content to meet primary capacity-building
needs in the USS. Capacity-building for social workers should include tailored trainings, soft skills development, refining
of specialized skills, and managerial development.
61. Employment support could be the next key element of social protection programs in Armenia. Recent data
suggest that investments in employment and job creation, through efficient ALMPs, are crucial for poverty reduction.
While in 2010–2016 the main drivers of poverty reduction were wages (4.9 percentage point reduction), social protection
(3.7 percentage points), and employment (2.5 percentage points), in 2016–2021, the main drivers of poverty reduction
were employment (accounted for 6.1 percentage point reduction), followed by wages (0.7 percentage point reduction).30
During design, the project’s second component was an add-on for a more holistic support, but future projects should
emphasize labor market interventions to support formal and informal workers, activation and training measures to tackle
unemployment.
30 World Bank. 2024. Armenia Country Economic Memorandum Concept Note.
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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS
@#&OPS~Doctype~OPS^dynamics@icrresultframework#doctemplate
A. RESULTS FRAMEWORK
PDO Indicators by Outcomes
Improved social protection service delivery
Indicator Name Baseline Closing Period (Original) Closing Period (Current) Actual Achieved at Completion
Result Month/Year Result Month/Year Result Month/Year Result Month/Year
Client participation costs of receiving 3,026.00 Dec/2013 2,476.00 Jun/2024 880.00 Jun/2024
benefits and services of ISPCs (for Comments on achieving targets Original target to reduce the cost to AMD 2,476 was surpassed 2.8 times.
FBP) (Number)
ISPCs being piloted - Dec/2013 Almost all clients Jun/2024 76% - 91% of the Jun/2024
clients unaware of satisfied beneficiaries is
new services satisfied with
Client satisfaction with benefits and opportunity to
services received through ISPCs receive several
(Text) services under one
roof
Comments on achieving targets Data source-Survey for the final evaluation of the Project. Original target "almost all clients satisfied" is
considered achieved.
Strengthened analytical and monitoring and evaluation functions
Indicator Name Baseline Closing Period (Original) Closing Period (Current) Actual Achieved at Completion
Result Month/Year Result Month/Year Result Month/Year Result Month/Year
5 piloted programs Dec/2013 Developed Jun/2024 Develop monitoring Jun/2024
M&E capacity increased as evidenced
monitoring passports and
by gradual introduction of the M&E
passports and indicators for all
system for SP programs (covering the
indicators for all SP MSLA programs
development of a model, indicators,
programs financed financed from the
project passports, software) (Text)
from the state state budget;
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budget; developed Partially-developed
electronic system electronic system
(receiving reports (receiving reports
for all indicators). for all indicators).
Comments on achieving targets Indicator largely achieved.
Intermediate Indicators by Components
Roll-Out of Integrated Social Protection Service Delivery
Indicator Name Baseline Closing Period (Original) Closing Period (Current) Actual Achieved at Completion
Result Month/Year Result Month/Year Result Month/Year Result Month/Year
Number of ISPC facilities 0.00 Dec/2013 34.00 Jun/2024 32 Jun/2024
refurbished/constructed and Comments on achieving targets With target of 34, this indicator is considered substantially achieved.
equipped (Number)
0.00 Dec/2013 30.00 Jun/2024 29 Jun/2024
Number of ISPCs fully operational
(Number) Comments on achieving targets With a target of 30, this indicator is considered substantially achieved.
Number of relevant external 1.00 Dec/2013 13.00 Jun/2024 20 Jun/2024
databases from which ISPC social Comments on achieving targets 20 databases are ready to deploy. However, a last-minute contractual issue prevents the completed work from
workers can obtain/check necessary being launched. Hence, this indicator is considered partially achieved, at risk of being reversed.
information on-line. (Number)
507,345.00 Dec/2011 587,699.00 Jun/2024 607,655 Jun/2024
Direct project beneficiaries
(Pensioners) (Number) Comments on achieving targets Target surpassed (original target was 587,699)
Female beneficiaries 301,885.00 351,268.00 342,376
(Number)
96,309.00 Dec/2011 89,620.00 Jun/2024 43,402 Jun/2024
Direct project beneficiaries (FBP)
(Number) Comments on achieving targets This value is fluctuating with the number of enrolled FBP beneficiaries, which is going down because of policy
changes. During the life of the project the value had surpassed 80,000.
88,928.00 Jan/2014 87,896.00 Jun/2024 63,932 Jun/2024
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Direct project beneficiaries Comments on achieving targets Indicator on number of job seekers - it has fluctuated over time.
(Number)
Female beneficiaries 59,764.00 56,341.00 38,703
(Number)
Number of applications for social 40,243.00 Dec/2021 100,106.00 Jun/2024 153,371 Jun/2024
services received in fully operational Comments on achieving targets Target of 159,373 is substantially achieved.
ISPCs (Number)
Number of applications for socio- 13,234.00 Dec/2021 52,776.00 Jun/2024 28,547 Jun/2024
medical examination received in fully Comments on achieving targets Target of 52,776 is partially achieved.
operational ISPCs (Number)
Number of applications for 2,691.00 Dec/2021 6,491.00 Jun/2024 2,862 Jun/2024
employment services received in fully Comments on achieving targets Target of 6,491 is not achieved.
operational ISPCs (Number)
Strengthen MLSI Analytical Capacity and Monitoring and Evaluation Systems
Indicator Name Baseline Closing Period (Original) Closing Period (Current) Actual Achieved at Completion
Result Month/Year Result Month/Year Result Month/Year Result Month/Year
Number of SSSS certified staff using 0.00 Dec/2013 400.00 Jun/2024 400 Jun/2024
electronic pension information Comments on achieving targets Target achieved.
system (Number)
Project Management
Indicator Name Baseline Closing Period (Original) Closing Period (Current) Actual Achieved at Completion
Result Month/Year Result Month/Year Result Month/Year Result Month/Year
Methodology not in Dec/2013 Methodology for Oct/2023 Methodology for Jun/2024
place collection of collection of
qualitative data qualitative data has
Methodology for collection of developed been developed and
qualitative data developed (Text) target for this
indicator is met.
Comments on achieving targets Target achieved. Methodology was developed in 2018 and already used for studies and analytical work by the
respective agencies.
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B. KEY OUTPUTS
Improved social protection service delivery
PDI 1: Client participation costs of receiving benefits and services of ISPCs (for FBP)
PDO Indicators
PDI 2: Client satisfaction with benefits and services received through ISPCs
• 32 USSTC facilities (buildings) refurbished/constructed and equipped
• Renovation of the Central Offices of the Medical and Social Expertise Agency and
the State Employment Agency of the MLSA; reception of the MLSA headquarters
• Furniture and appliances for 32 USSTCs
• Equipment for 34 USSTCs, including cameras, video recorders, electronic queuing
terminals, video surveillance, and related equipment
• Computer hardware was also procured for the needs of MSEA, SEA, SATA/D Head
offices
• A total of 1,060 pieces of medical equipment and materials for USSTCs
Key Outputs • 13 vehicles (8 sedan type cars and 5 universal type) for USS
(linked to the achievement of the PDO Outcome) • Consultancy services for construction design
• Consultancy services for technical supervision of constructions works
• Consultancy services for furniture designs and supervisions
Additional Specialized Outputs for Emergency Response (in connection with the
settlement and accommodation of more than 100,000 refugees)
• Furniture and equipment for 14 care institutions in the jurisdiction of the MLSA
• Four minibuses for four 24-hour specialized care centers
• Five universal vehicles for territorial centers serving refugees
Strengthened analytical and monitoring and evaluation functions of the agencies delivering social protection benefits and services
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PDI 3: M&E capacity increased as evidenced by gradual introduction of the M&E
PDO Indicators system for SP programs (covering the development of a model, indicators, project
passports, software)
• Core module (AMS) of the UIS of electronic social services, integrating and
connecting existing information systems for unified applications
• Monitoring passports and indicators developed for all social programs
implemented by the MLSA
• Foundations of the electronic system for receiving reports for all indicators
• Methodology for collecting qualitative data, developed and integrated as part of
the usual practices of the MLSA and NILSR
• Trainings for staff of the MLSA and NILSR on using the methodology for collecting
qualitative data
• Two rounds of data collection (surveys) to improve the revised targeting formula
Key Outputs
and the services integration reform (contributions to the new vulnerability
(linked to the achievement of the PDO Outcome)
assessment)
• Continuous training and capacity building of staff in the MLSA, NILSR, and ISPCs
• Content development for distance training on integrated model
• Research activities on poverty and different forms of monetary and nonmonetary
deprivations
• 400 staff certified for using the electronic pension information system
• Integrated social services funding model developed
• Draft legal acts developed for the necessary legislative changes on integrated
services
• Public awareness activities for the reforms in the field of USS
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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION
A. TASK TEAM MEMBERS
Name Role
Lucia Solbes Castro Team Leader
Lusine Asatryan Financial Management Specialist
Oxana Druta Financial Management Specialist
Armine Aydinyan Procurement Specialist
Rahmoune Essalhi Procurement Specialist
Lusine Gevorgyan Environmental Specialist
Darejan Kapanadze Environmental Specialist
Sonya Msryan Social Specialist
Vahan Danielyan Team Member
Agnes Nderakindo Mganga Team Member
Daniel Garrote Sanchez Team Member
Peter Ivanov Pojarski Team Member
Arpine Azaryan Team Member
Irina Tevosyan Team Member
@#&OPS~Doctype~OPS^dynamics@icrannexstafftime#doctemplate
B. STAFF TIME & COST
Staff Time & Cost
Stage of Project Cycle
No. of Staff Weeks US$ (including travel and consultant costs)
Preparation
FY14 29.062 172,796.35
FY15 0.000 382.77
Total 29.06 173,179.12
Supervision/ICR
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FY14 0.000 533.77
FY15 29.758 131,535.17
FY16 24.402 113,638.23
FY17 31.914 138,916.47
FY18 20.863 112,226.36
FY19 26.932 120,718.08
FY20 26.101 137,579.97
FY21 29.516 116,150.14
FY22 16.383 111,552.50
FY23 22.422 120,228.40
FY24 25.207 149,186.09
FY25 10.225 60,500.61
Total 263.72 1,312,765.79
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ANNEX 3. PROJECT COST BY COMPONENT
(i) Project Disbursements as of December 2024
SDR amounts US$ amounts
Signed amount in SDR 13,900,000.00 Signed amount in US$ 18,274,608.00
Cancelled 433,050.41 Cancelled 569,340.04
Disbursed 13,298,249.03 Disbursed 17,483,473.96
Undisbursed 168,700.56 Undisbursed 221,794.00
Special commitment 0.00 Special commitment 0.00
Funds available 168,700.56 Funds available 221,794.00
Percent disbursed 98.75% (95.7%)a Percent disbursed 98.75%
Note: a. Calculated over the revised amount after cancellation. Alternatively, 95.7 percent of the original amount was utilized,
calculated by the formula 13,900,000 − amount cancelled − amount undisbursed divided by total original amount.
(ii) Project Costs by Component
Amount as Amount as
Amount at officially officially Actual at Project
Percentage of
Components Approval PAD restructured restructured Closing (US$,
Approval
(US$, millions) (US$, millions) (US$, millions) millions)
May 2020 October 2020
1. Roll-Out of Integrated
Social Protection Service 14.30 17.08 16.90 14.76 103.0
Delivery
2. CANCELLED: Supporting the
Implementation of the
2.20 0.25 0.25 (0.00) 0.0
Employment Strategy by the
Government
3. CANCELLED: Modernization
0.90 0.03 0.00 (0.03) 3.3
of the Pension System
4. Strengthen MLSI Analytical
Capacity and Monitoring and 1.10 0.49 0.46 0.87 79.0
Evaluation Systems
5. Project Management 1.30 1.79 1.65 1.90 146.0
Unallocated 1.40 0.00 0.00 0.00 0.0
Total 21.20a 19.64b 19.26 (18.96)c 17.56d 82.8
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Note: a. Original US dollar amount was based on the SDR to US$ exchange rate at time of appraisal. As per official IMF data, SDR 1 =
US$1.549690 as of April 30, 2014, which would be the date used to calculate dollar amounts for the Financing Agreement signed on
May 23, 2014. Total SDR amount in Financing Agreement is 13.90 million, and the PAD amount in US$ is 21.2 million, which suggests
it may have been calculate using an earlier exchange rate during appraisal.
b. Revised US dollar amount was based on the SDR to US$ exchange rate at the time of restructuring. As per official IMF data, SDR 1 =
US$1.373280 as of February 28, 2020. With no cancellations at that point, the US dollar amount at the time it was calculated was
approximately US$19.1 million, which explains the reduced total project estimated cost.
c. Estimated amount actually closer to US$18.96 million. US$600,000 cancelled at this point. As per official IMF data, SDR 1 =
US$1.407570 as of September 30, 2020. The budget for Component 1 and Component 5 was reduced by US$0.18 million and US$0.14
million, respectively; US$0.03 million came from savings from Component 4; estimated US$0.25 million was cancelled from
Component 2. The cancellation of US$600,000 was at the time equivalent to SDR 433,050, reducing SDR amount to 13,466,949.
d. As per official IMF data SDR 1 = US$1.356370 as of September 30, 2024.
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ANNEX 4. EFFICIENCY ANALYSIS
Original Economic Analysis
1. Appraisal included a brief economic analysis. The economic analysis considered that the components
included significant costs for capital investments (civil works, IT equipment, and furniture), together with goods,
training activities, and consulting services. There were expected recurrent costs in relation to the maintenance of the
ISPCs, which would be the responsibility of the central Government. The fiscal impact of the project was expected to
be marginal and prospects for fiscal sustainability were positive.
2. Considering the relative importance and weight of Component I, the economic analysis focused
primarily on investing in the roll-out of the integrated social protection centers. The ISPC model allowed for better
and faster access to benefits and services, as well as to information relevant to the client for application purposes,
and was expected to reduce private costs in a number of ways. Most importantly, it was expected that the project
would result in (i) reduced transportation cost for the applicant; (ii) reduced number of documents needed for the
application; (iii) reduced time burden for clients applying for several benefits and services; and overall (iv) less time
needed to file applications to different benefits and services.
3. There were also a number of potential cost savings for the public authorities in the long run.
Operating costs were likely to decline once the staff previously working in separated units and institutions were able
to coordinate and provide services across different social protection areas in a single collocated space. Removing
duplicate processes and introducing more electronic cross-checks with other databases would also allow the
Government to reduce administrative costs. In particular, administrative expenditures per benefit application would
decline and consolidating the administration processes would likely increase the productivity of ISPCs staff. A
coordinated and integrated service provision would also help address fraud and abuses and minimize errors of
exclusion and inclusion.
4. The possibility of future administrative cost savings gave the Government of Armenia some
discretion as to how to reallocate the freed resources. In principle, these resources were to be reallocated to
maximize the developmental impact of the project. For example, actual face time of social workers with the clients
could be increased. Alternatively, the centers could invest in more resources or equipment, such as cars, to reach out
better to marginalized families in remote areas and intensify contacts with local employers. For the cost savings to
materialize and to increase the efficiency of social service delivery, the underlying management structure of the ISPCs
would have to be further integrated, a process that was initiated with the establishment of the USS in April 2021 and
is in process of consolidation. Staff specialized in one program would need to be further trained in other programs to
learn about additional services and types of support available to families so as to make appropriate referrals. As
discussed in the Implementation Completion and Results Report (ICR) of the first SPAP project, 31 this seems
31 Social Protection Administration Project, P087620
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particularly challenging to public employment services staff that see their beneficiaries and roles as more complex
than those of other social services.
5. The project financed activities in the public sector for which private provisions did not exist in
Armenia or were very limited. Government intervention is mandated in Armenia to ensure access to social protection
services for the poor and vulnerable. Given the fiscal situation in Armenia at the time, World Bank support seemed
appropriate to enable Government to fulfill its responsibilities. The World Bank would add value through its large
experience in funding and supporting similar projects in contexts alike, and extensive knowledge as to how social
assistance and labor market programs could further enhance the effectiveness of the sector in Armenia.
Updated Economic Analysis
6. SPAPII has directly contributed to two major SP reforms in Armenia that are expected to bring
significant efficiencies to the sector. SPAPII directly supported the implementation of the integrated social services
reform and of the new vulnerability assessment mechanism, thus also contributing to improvements of the FBP, as
the main cash transfer program in the country. With the renovation of territorial centers spread around the country
and the integration of benefits and services under one roof, coupled with IT tools, efficiency gains were realized both
on the side of the users of social services (particularly for the most vulnerable, like the FBP beneficiaries) and on the
side of the government.
(i) Efficiency gains for clients of the territorial centers
7. Beneficiary evaluations during the project indicate that renovated territorial centers reduced the
overall costs to beneficiaries of accessing services. In 2023, beneficiaries spent an average of 880 AMD during their
last visit to USSTCs, compared to AMD 710 in 2018, which, accounting for inflation, is the same or slightly lower cost
in 2023. Moreover, comparing beneficiary costs for the integrated and non-integrated centers in 2018, the
beneficiaries spent AMD 630 on visiting integrated territorial centers, and AMD 900 in case of non-integrated centers.
These expenses include transportation, document collection, and other related costs. Additionally, in 2023,
beneficiaries' expenses for the complete solution of their issues, including all necessary visits, averaged AMD 1310.
According to the results of both the 2018 and 2023 surveys, the majority of beneficiaries at integrated centers (89
percent and 86 percent of respondents respectively) could easily determine where to apply regarding their issue when
entering the territorial center. Additionally, the majority of beneficiaries (63 percent) in 2023 had to interact with only
one receiving staff member. In both surveys, half of the beneficiaries reported having no difficulty getting to the
territorial center although the number of individuals facing difficulties reaching the center increased in 2023
compared to 2018. In 2023, the majority of beneficiaries (74 percent) reported reaching the centers within one hour.
The surveyed beneficiaries mainly received services at their place of residence, with 81 percent of respondents in
2018 and 71 percent in 2023 selecting this option.
8. Besides the unified support in territorial centers, the implementation of the new vulnerability
assessment is expected to bring efficiency gains to both beneficiaries and staff in the reception area. The AMS
(Application Management System), expected to be launched in the first quarter of 2025, exchanges data with internal
and external databases, collecting information included in the benefit application, reducing the number of verification
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documents that need to be brought to the centers and therefore saving time to both clients and social workers, who
previously had to verify them. Moreover, if all required information is available from the data exchanges, the AMS
allows for automatic verification of the benefit eligibility, facilitating shorter benefit processing time.
(ii) Efficiency gains for the Government
9. The co-location of services has likely provided cost reductions for the national and local budgets.
With the construction of the new territorial centers and the establishment of the USS, the MLSA reported savings on
renting costs for buildings that were previously offered by 4 different institutions. As a result of the establishment of
the USS, the MLSA is working on functional models that promote collaboration between the different specialists within
a center and consistent management control across centers. While early to assess, the process of co-location of
services is expected to reduce redundancies in administrative functions, staffing and data management, for example
in the reception area. While there has been no specific analysis with details and budget data on the implied savings,
similar reforms in other countries have generated cost savings. The literature suggests that integrating public services
to improve user’s access to and experience of those services could result in important efficiency and effectiveness
gains, eventually improving outcomes for users, particularly for those with complex needs like the FBP beneficiaries.
32
Internationally, faced with reduced public spending, governments across the world are promoting local public
service integration and co-location as a means of cutting public spending and improving service outcomes.
Recommendations to the public sector promote co-location as a major cost-saving initiative (Kearney 2005; 33
Dunleavy 2010).34 For example, localized co-location initiatives in the UK emphasize scale economies and savings in
building costs (Clow 201335). However, there are also other benefits and outcomes of co-location, including service
innovations benefiting users.
10. The new vulnerability assessment and other ongoing reforms in the sector are expected to impact
social expenditure efficiency. According to the 2023 Public Expenditure Review (PER 2023), once the vulnerability
assessment and the childcare allowance reforms are implemented, it is estimated that the social assistance cost will
likely increase by 0.2 to 0.3 percent of GDP, at least on the short run. While both reforms are well justified, the 2023
PER recommended some options to compensate for these cost increases, including reducing the spending on larger
programs that are less cost-effective relative to their stated objectives; improving child allowance targeting; and
phasing out some of the many small programs that contribute to the fragmentation of social assistance and possibly
increase administrative costs. The SPAP II can be seen as already having contributed to some of the proposed
measures, by means of (i) maintaining and enhancing FBP features that are incentive-compatible with formal
employment; (ii) helping introduce an integrated information system to allow for interoperability and improved
targeting; (iii) putting in place a better monitoring and evaluation framework to assess the effectiveness of different
programs.
32 Adams, D. and Hlodver Hakonarson, 2024. An Integrated approach to service delivery for people with multiple and complex needs. OECD.
33 Kearney, A. (2005) Shared Services in Government: turning private sector lessons into public sector best practices.
34 Dunleavy, P. (2010) The future of joined-up public services. ESRC.
35 Clow, S. (2013) Hampshire County Council report.
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11. According to the 2023 Public Expenditure Review (PER),36 overall social assistance benefits were
found to be cost-effective and their coverage has increased significantly in recent years. Social transfers remain an
important tool for poverty reduction.37 If payments of social transfers (pensions and monetary social assistance) were
stopped and the poor were not able to compensate for this loss from other sources, poverty would increase from the
current rate of 23.7 percent to 50.4 percent. Moreover, poor households would become even poorer: the poverty gap
would increase from 4.4 percent to 20.8 percent. Poverty would also become more severe, with an increase from 1.3
percent to 12.8 percent of the poverty severity index. While pensions is the largest program, the role of social
assistance and more specifically – that of the FBP – in helping the most vulnerable households overcome poverty is
significant. Total coverage of the FBP demonstrated fluctuating trends since 2019 and was 11.3 percent in 2023.
Nevertheless, FBP’s coverage of the poor grew from 25.6 percent in 2019 to 29.1 percent in 2023. In addition, 56
percent of the transfers went to the bottom quintile (59.1 percent of all beneficiaries). Some of these positive
outcomes can be attributed to the project’s activities that aimed at improving service delivery, capacity, and targeting.
Enhanced monitoring and verification procedures are also being introduced in the sector. With these enhancements,
key results and efficiency gains are expected over time, including better data verification capabilities, means-based
assessment of household welfare, reduced paperwork burden on applicants, faster processing times, and better ability
to update information when household circumstances change.
Implementation and Administrative Efficiency
12. Administrative Efficiency was relatively modest, with percentage of administrative expenses
remaining constant for the duration of the project, at 9.8 percent of the total project expenditures. Despite the
prolonged project duration, the allocation for operational costs within the project portfolio remained largely
unchanged (a minor increase from USD 1.65 million to USD 1.67 million). Operational costs were financed within
Component 5, through the provision of consulting services, training, independent audit of the Project, seminars-
discussions, as well as additional operational costs of the MLSA PCU. The PCU consisted of a team of professional
consultants on fiduciary management and procurement, and M&E of the project activities. The PCU had around 19
staff positions (varying over time), with a total of 43 consultants rotating through these positions for the life of the
project. However, several external factors, mainly related to political events, recurrent conflicts and COVID, resulted
in changes to implementation arrangements and within PCU teams which in turn led to temporary inefficiencies in
management, delays in implementation pace and several extensions to the project closing date. See environmental,
social and fiduciary compliance section for further references.
36 The World Bank. 2023. Armenia Public Expenditure Review: Improving Spending Efficiency.
37 Armstat Poverty Snapshot 2021.
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS
The Ministry of Labor and Social Affairs, as implementing agency of the project, reviewed a draft of the ICR and had no
objections to its conclusions, nor any additional further comments. This annex contains the title and contents pages of the
Borrower’s final report (full report on file).
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ANNEX 6. SUPPORTING DOCUMENTS (IF ANY)
Government of Armenia (Statistical Committee). 2019. “Social Snapshot and Poverty in Armenia, 2019.”
https://www.armstat.am/file/article/poverty_2019_english_2.pdf
UNDP. 2023. Comparative Analysis of 2018 and 2023 Surveys on Unified Social Service Beneficiary Satisfaction Conducted
in the Framework of the Final Evaluation of SPAP II.
World Bank. 2013. Implementation Completion and Results Report - Armenia Social Protection Administration Project
(P087620). Report No: ICR2880.
World Bank. 2014. Project Appraisal Document - Armenia Social Protection Administration II Project (P146318). Report No.
82262-AM.
World Bank. 2015. Project Appraisal Document - Armenia Social Investment and Local Development Project (P148836).
Report No. PAD1109.
World Bank. 2019. Country Partnership Frameworks for the Republic of Armenia for the Period FY19–FY23. Report No.
123902-AM.
World Bank. 2020. Core Diagnostic of the Social Protection System in Armenia.
World Bank. 2020. Project Paper - Promoting Social Inclusion and Self-Reliant Livelihood Activities in Armenia (P165314).
Report No. PP3523
World Bank. 2024. Armenia Country Gender Assessment. P179877
———. Armenia: The Second Systematic Country Diagnostic. Beyond Boundaries: Unlocking Potential for a Sustainable
Tomorrow.
———. Progress Reports of the Promoting Social Inclusion and Self-Reliant Livelihood Activities in Armenia (P165314)
Project.
———. All Aide Memoires and Implementation Status and Results Reports for the Armenia Social Protection Administration
II Project (P146318).
Armenian Associations of Social Workers. 2023. Promoting Social Inclusion and Self-Reliant Livelihood Activities in Armenia
(PSISLA) Final Report on Baseline and Final Evaluation Study.
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
ANNEX 7. LIST OF LEGISLATIONS (DPO 3 CONDITIONS) SUPPORTED UNDER THE SPAP II (2015)
No. Activity Legal Act/Course of Implementation
1 Development of draft GoA decree “On ensuring the GoA Decree No 582-N, from June 4, 2015
implementation of the Law of the Republic of Armenia “On
Social Assistance” and making amendments and additions
to several decrees of the RA Government.
2 Development of draft GoA decree “On defining the GoA Decree No 1061- N, from September 10, 2015
procedure for exercising the powers of territorial bodies
providing social services, the orders and conditions for the
provision of social services”
3 Development of draft GoA decree “On defining the cases GoA Decree No 1078-N, from September 10, 2015
and order for the certification of the activity of providing
social services”
4 Development of draft GoA decree “On approving the GoA Decree No 1044-N, from September 9, 2015
regulation of inter-agency social cooperation”
5 Development of draft GoA decree “On defining the order Government of the Republic of Armenia session agenda
and conditions for the provision of in-kind aid” 31.08.2015
6 Development of draft GoA decree “On defining the order GoA Decree No 1069-N, from September 9, 2015
and conditions for providing accommodation (shelter) and
repealing a number of GoA decrees”
7 Development of draft GoA decree “On defining the order GoA Decree No 1112-N, from September 10, 2015
and conditions of care provision”
8 Development of draft GoA decree “On defining the order GoA Decree No 1035-N, from September 10, 2015
and conditions for the provision of rehabilitation
assistance”
9 Development of draft order of the RA MLSA Minister “On Order of the RA Minister of Labor and Social Affairs No 115-
approving model charters of social assistance territorial N from August 3, 2015
agencies and social assistance territorial departments”
10 Development of draft order of the RA MLSA Minister “On Order of the RA Minister of Labor and Social Affairs No 120-
approving the order for creating and managing the registry A/1 from 21 August, 2015
of organizations providing social services”
11+4 Development of draft orders of the RA MLSA Minister “On 1. Order of the RA Minister of Labor and Social Affairs No 50-
approving charters of state non-commercial organizations A/1 from March 16, 2015
providing care” 2. Order of the RA Minister of Labor and Social Affairs No 49-
A/1 from March 16, 2015
3. Order of the RA Minister of Labor and Social Affairs No 48-
A/1 from March 16, 2015
4. Order of the RA Minister of Labor and Social Affairs No 47-
A/1 from March 16, 2015
5. Order of the RA Minister of Labor and Social Affairs No 78-
A/1 from March 19, 2015
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No. Activity Legal Act/Course of Implementation
16 Development of draft GoA decree “On approving the GoA session agenda of 31.08.2015
strategic directions and forms of organization of social
cooperation”
17 Development of draft GoA decree “On approving the order GoA Decree No 1110-N, from September 10, 2015
of organizing training courses on computer programs used
in the process of providing social services and issuing
certificates confirming the skills of working with these
programs”
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
ANNEX 8. DETAILS OF PROJECT RESTRUCTURINGS
Disbursement
ISR Ratings (US$, Reason for Restructuring & Key Changes
Date(s) Change
millions)
DO IP
A 23-month extension was granted in September 2018 to provide
06-Sept- • Loan Closing
MS MS 5.11 sufficient time to complete the civil works for remaining ISPCs and
2018 Date Extension
make them operational.
• Clients
• Financial The project was restructured to replace the FFPMC as the project
23-May- Management implementing agency under the MOF responsible for fiduciary
MS MS 6.62
2019 • Procurement functions, with the newly created Project Implementation
• Institutional Department (PID) under the MOF.
Arrangement
Restructuring to exclude the PID as the project implementing agency
13-Dec-
MS MU 7.45 and transfer the fiduciary responsibilities from the PID to the PCU
2019
under the MLSA
• Components
• Results
• Disbursement Provided another 23-month extension of the project closing date to
Estimates implement the remaining project activities, cancellation of the
09-May-
• Loan Closing MS MS 7.91 original Component 3 (‘Modernization of the Pension System’), a
2020
Date Extension reallocation between the disbursement categories, and changes in
• Reallocations the IRIs and their targets.
• Implementation
Schedule
• Components
• Results
• Disbursement Under the COVID response activities, a fifth restructuring was
27-Oct- Estimates processed in October 2020 to cancel US$600,000 and Component 2
• Loan MS MS 8.81
2020 (‘Supporting the Implementation of the Employment Strategy by the
Cancellations
Government’). Revisions to IRIs.
• Reallocations
• Implementation
Schedule
• Results
• Disbursement Extended the project by 12 months to reach the closing date of
Estimates October 31, 2023, and included some revisions of the Results
02-Nov-
• Loan Closing MS MS 13.87 Framework. The extension was needed as a response to the delays
2022
Date Extension caused by the COVID-19 pandemic and the conflict in September
• Implementation 2020. Adjustments to IRIs.
Schedule
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Armenia Social Protection Administration II Project (P146318) ICR DOCUMENT
Disbursement
ISR Ratings (US$, Reason for Restructuring & Key Changes
Date(s) Change
millions)
DO IP
• Results Extended the closing date of the project by 8 (eight) months, to June
• Disbursement 28, 2024, to allow for the implementation of emergency activities in
Estimates
31-Oct- response to the recent crisis in Armenia. Adjustments to IRIs. With
• Loan Closing MS MS 16.92
2023 that extension, the total cumulative extension reached 66 months
Date Extension
• Implementation from the original closing date, and the total project life came to be
Schedule 10 years and 3 months.
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