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Implementation Completion Report (ICR) Review - Rural Communities Development

1. Project Data:   
ES Date Posted:
Project Name:
Rural Communities Development
Project Costs(US $M)
 31  17.98
Loan/Credit (US $M)
 15  12.9
Sector, Major Sect.:
Agency Reform,
Cofinancing (US $M)
 12  2.45
L/C Number:
C2772; CP850      
Board Approval (FY)
Partners involved
Closing Date
06/30/1999 08/31/1999
Prepared by: Reviewed by: Group Manager: Group:  
Madhur Gautam
Soniya Carvalho Alain Barbu, Acting OEDST

2. Project Objectives and Components:

a. Objectives
Overall objectives: (a) alleviate poverty through rural investments identified and formulated following a participatory planning process; (b) enhance the institutional capacity of the Secretariat for Rural Development (SNDR), the Small-Farmer Development Fund (FDC), and the Secretariat for Popular Participation (SNPP); (c) improve the capacity of municipalities and rural communities to implement municipal development plans (PMDs); (d) strengthen NGOs assisting municipalities and rural communities in identifying, formulating, and implementing rural investments and managing PMDs.

Specific objectives: (a) operationlize and institutionalize participatory planning processes at the municipal and community level, following the principles in the Popular Participation Law (LPP); (b) empower grassroots organizations to undertake planning of community development efforts; (c) assist municipalities in the formulation and implementation of PMDs; (d) strengthen executing and co-operating agencies in sub-project preparation, implementation, and administration; and (v) increase and improve FDC's rural investment portfolio.

b. Components
(i) Rural investment identification and formulation: technical assistance to municipalities and civil society organizations (OTBs) on participatory planning and carrying out PMDs; register OTBs and establish Supervisory Committees (CVs); form indigenous municipal districts; and prepare rural investment sub-projects.
(ii) Training: for public and private entities in participatory planning methodology, adjustment of PMDs, management and monitoring of PMDs and Annual Operative plans, and sub-project preparation and implementation.
(iii) Institutional strengthening: of SNDR, FDC and SNPP to carry out their respective activities
(iv) Rural Investments: provide funds to FDC to finance eligible sub-projects.

c. Comments on Project Cost, Financing and Dates
At appraisal, the Swiss Technical Cooperation contribution was expected to be US$1.7 million, which increased to US$2.4 million in the final costs. IFAD was to cofinance the rural investments component, anticipated at appraisal to be US$4.9 million. Due to delays and the eventual decision by IFAD to approve an increased (US$8 million) stand-alone project, the final allocation of project costs between the technical assistance and rural investment components was different (73:27) than anticipated at appraisal (48:52). Despite some delays, the project closed only two months later than planned.

3. Achievement of Relevant Objectives:

The project achieved most of its general and specific objectives. The only component which could have done better was the rural investments component, due to the delay in IFAD funding, although even this component substantially achieved its development objectives. Targets for most of the performance indicators were exceeded, although only output indicators are measurable at this time. Being largely institutional development in nature, with significant capacity building components, the project's impact will only be felt in the years to come. However, it has helped lay the essential groundwork for potentially significant poverty alleviation. It has successfully supported the government's bold development initiatives through, among other things, its contribution to LPP institutionalization and implementation, and has promoted widespread participation, including of indigenous peoples and peasants, in a decentralized planning and prioritization process for development investments. The project helped operationalize participatory planning processes in 132 municipalities (against a target of 98), with 1.6 million inhabitants (23% of Bolivian population) and created demand in other municipalities for participatory planning. The PMDs have become fundamental references for municipal investments by communities, indigenous districts, NGOs and municipal governments, and are being used as basic inputs for the design of at least 6 donor financed projects. An important contribution to the empowerment of grassroots organizations has been the legal recognition of the campesino and indigenous communities in the originally planned 98 municipalities. The participatory planning methodologies promoted by the project have helped put into practice the rights and duties of local communities. In addition to the formulation and supervision of PMDs and POAs (through training and technical assistance), the project helped in sub-project profile preparations (developing 575 project profiles and 527 fully formulated projects). Although actual investments could have been higher had IFAD funding materialized in time, the project did help significantly increase the volume and quality of FDC's portfolio. FDC portfolio increased from US$12.2 million in 1996 to US$27 million in 1999.

4. Significant Outcomes/Impacts:

The project helped institutionalize a participatory, bottom-up process of planning, implementation and control of public investment financing through the PMDs and POAs as noted above. It succeeded in providing technical assistance for the capacity building of local government and civil society organizations for a potentially effective development partnership. In the process, coordination among donors and across local and national agencies has also been improved. These gains have been made despite significant organizational and political changes, with proactive project management and focus on maintaining the continuity and integrity of the project management team, and the focus on empowerment of civil society organizations and local governments. Most of the project's achievements are of an institutional development nature. As such the project appears to have had a high impact as demonstrated by the increasing role of decentralized and grassroots organizations in the formulation of PMDs and POAs, and the key role they are playing in prioritizing rural development activities of the government, civil society and donors. Actual results in terms of development impacts, as noted above, still need to be demonstrated, but are expected to be significant. Given the close link of the project's activities to the implementation and operationalization of the LPP, the strong political commitment to the LPP, and the empowerment of local campesino and indigenous communities over municipal investment planning and execution, indicate that the project's institutional development outcomes are likely to be sustained. The sustainaibility of sub-project investments needs to be reaffirmed, although the ICR notes an ERR of 37% for the project, indicating that overall the investments appear to be economically sound.

5. Significant Shortcomings (include non-compliance with safeguard features):

The project largely met or exceeded its objectives. As such, there are no significant shortcomings that are apparent.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
    The actual impact of the project on poverty alleviation is yet to be demonstrated.
Institutional Dev.:
Bank Performance:
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

1. Synergy between good policy and appropriate project design: the experience with this project confirms the importance of a good policy environment for positive development impact. In addition, appropriate project design (focused on social empowerment and effective local governance) can support policy and program implementation for potentially significant poverty reduction impact.
2. Effective participatory planning: Empowerment goes beyond drawing up a wish list of "needs"; combined with the need to operate within limited resources and capacities, truly participatory planning can help maximize impact by identifying priority investments and interventions with highest likely payoffs to the local people, and also by raising the quality of investments through prioritized demands, transparent processes and greater commitment by communities to maintenance. Care needs to be taken to be include a broad cross section of the population lest the process by captured by elites.
3. Appropriate and quick response: For the participatory process to be successful, an efficient response is essential so that the culture of consultations and consensus-building can be maintained over time. With delays in response, or lack of respect for identified priorities, the value of participation can be lost.

8. Audit Recommended?  Yes

          Why?  A successful participatory project design with significant institutional development impact. The project offers important lessons for rural development (and other) project/program design. It would also be useful to determine the impact of the project activities in terms of results on the ground.

9. Comments on Quality of ICR:

The ICR provides an excellent in-depth account of project implementation. In determining project outcomes, although physical impact and impact on poverty alleviation will necessarily take time, it would have been useful to obtain beneficiary feedback on the project's extensive participatory processes and capacity building activities.

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