Download Report - Independent Evaluation Group - World Bank

28identifying weaknesses in tax administration or ways to broaden the tax base.Nonetheless, the creation of the Unit, the submission of its report, and the prospect of aconference on tax policy in 2002 were considered as meeting the condition for secondtranche release. During the crisis, the Unit was dissolved.6.21 In 2000, GOM established a system by which spending decisions for educationand health were delegated to deconcentrated offices to speed up the use of budgetallocations in outlying areas (see measure 6 para. 6.2). A Technical Monitoring Unit ofSocial Expenditures was created to monitor social policies and expenditures actuallyincurred, including performance under the new deconcentrated system. It carried out atracking survey to analyze the proportion of budget flows actually reaching primaryeducation and health centers and produced quarterly reports on expenditures based onbudget items and functions. However, it failed to produce recommendations on policiesand action plans on how to increase social expenditures or to improve execution rates.Achievements under Governance and Public Financial Management6.22 The original conditionality did not address specifically governance and financialmanagement, although these were underlying concerns. During the July/August 2002consultations, GOM and the Bank agreed that actions taken by GOM in the aftermath ofthe crisis in the areas of anti-corruption and financial management would be substitutedto actions not taken in land tenure (measure 2) and financial sector reforms (measure 8)as conditions for third tranche release. Accordingly, the following replaced measure 2:creation of a task force responsible for proposing a national anti-corruption strategy andadoption of a decree requiring ministers, senior officials, and judges to declare theirassets and those of their close relatives. Measure 8 was modified to cover actions takento strengthen financial management: tighter control over the use of the Special Funds,including sanctions against officials involved in their misuse, and adoption of a decreemandating OAG to carry out semi-annul audits of the Special Funds; completion of anaudit of the HIPC funds for 2001; and merger of the Ministries of Finance and of Budget,thereby bringing to closure a long-standing obstacle to improving fiscal policy and publicfinancial management. The new conditionality was in fact nothing more than a rubberstamp of the urgent measures taken to address the unique situation that had developedduring the crisis, and with no provision or requirement for further reforms. Actualimplementation and/or institutionalization of most of these measures were in factundertaken under subsequent programs or operations.MONITORING AND EVALUATION AND OTHER ISSUES6.23 In addition to the series of conditions referred to above, SAC-II contained threesimple outcome/impact indicators at project end (originally December 31, 2001),compared to end 1998: increase in FDI as a share of GDP (from 0.4 to 1.7 percent);increase in the share of private investment (the public investment/private investment ratiodeclining from 1.2 to 0.9); and an increase in the growth rate (above 5 percent). The threetargets were met by end 2001 (see Table 1 in Section 4). SAC-II also listedintermediate/output indicators with targets set for the closing date. There is noinformation whether data were collected to verify these targets or whether they were