Evaluation

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Program Performance Audit Report on the Social Action Program in Pakistan
Completed: 2001

This report evaluates the performance and achievements of the Asian Development Bank's (ADB) first loan in support of the Government's Social Action Program (SAP), a multi-donor supported program formulated to improve social indicators in primary education, health, population welfare, and rural water supply and sanitation, mainly through increased expenditure and improved quality of expenditure on publicly provided social services.

The overall rating of ADB's project in support of SAP was partly successful. It was an innovative, relevant, and ambitious attempt to improve the social conditions of the Pakistan people, particularly women and those in rural areas. Its main success was to generate a substantial dialogue and the consequent acceptance of the need address Pakistan's poor social indicators.

  Summary of Findings

• SAP was highly relevant in terms of need as it was innovatively designed to increase the low profile of social sector development. SAP had a high degree of strategic fit with ADB, and government objectives and strategies. However, its design was less relevant. While social sector expenditure in Pakistan was, and is, low by international standards, the design placed too much emphasis on increasing expenditure and investment, and not enough on the efficiency of existing and incremental expenditure, governance issues, and the institutional constraints to effective service delivery.
• SAP was effective in achieving expenditure targets.
• Although efficiency was recognized as an issue, specific ways to improve the efficiency of existing and incremental expenditure were not included in project design or effectively incorporated during implementation.
• The increased visibility of and political commitment to social sectors have been sustained.
• The overriding issue for the future of social sector development in Pakistan is how to fully incorporate the rapidly growing role of the private sector and the willingness and ability of increasing numbers of people to pay for better social services into the SAP policy and strategy framework.

  Lessons identified

• Greater social sector expenditure and increased non-salary expenditure by the Government may be necessary conditions for improved social outcomes in Pakistan but they are not sufficient.
• Incremental public sector social expenditure will be financially sustainable only if strong efforts are made to increase revenues through cost recovery, higher resource mobilization from federal and provincial taxes, and privatization of non-core government assets in order to repay debt.
• Opportunities for efficiency and effectiveness gains from existing expenditures need to be identified and benchmarks for service quality and costs of service provision established. Alternatives to currently inefficient public sector provision and funding need to be explored and tested.
• The reimbursement mechanism of rewarding incremental expenditure is an incentive to use more inputs rather than produce better results.
• There is a need for the Government to redefine the role of the public sector in social service funding and provision with a view to greater adoption of user-pays mechanisms (according to need), greater fee-for-service provision, targeting of scarce public funds to the most needy through innovative schemes such as vouchers, and genuine and widespread public-private partnerships.
• In reform programs such as SAP, it is critical that formulation and design of projects involve all stakeholders-particularly those responsible for service delivery at the provincial, district, and facility level, private providers, and the community.
• Policy reform agendas need to be coherent and consistent. To ensure this, there is a need to clearly articulate and continually repeat and reinforce a vision for the future, together with a core set of guiding principles, policies, and key strategic actions.