The World Bank Report No: ISR5890 Implementation Status & Results Albania Social Sector Reform Development Policy Loan (P116937) Public Disclosure Copy Project Name: Social Sector Reform Development Policy Loan (P116937) Program Stage: Implementation Seq.No: 2 Status: ARCHIVED Archive Date: 21-Sep-2011 Country: Albania Approval FY: 2011 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Development Policy Lending Implementing Agency(ies): Key Dates Board Approval Date 28-Apr-2011 Original Closing Date 30-Apr-2012 Planned Mid Term Review Date Last Archived ISR Date 21-Sep-2011 Effectiveness Date 25-Aug-2011 Revised Closing Date 30-Apr-2012 Actual Mid Term Review Date Program Development Objectives Program Development Objective (from Program Document) The objective of the DPL is to support policy changes to (i) improve the effectiveness of social safety nets, and (ii) enhance the efficiency and equity of health spending, in a fiscally sustainable environment. In particular, the proposed reform agenda supported by this DPL includes the following: i. To improve the effectiveness of social safety nets, the DPL would support policies that (a)strengthen the mechanisms to allocate funds and select beneficiaries in the main social assistance program; (b) introduce incentives for investing in human capital by providing an additional benefit linked to school enrollment and attendance for families with school age children; (c) initiate the process to create a unified registry of beneficiaries of social assistance programs; and (d) change the indexation formula of the disability benefits program, to control the share of resources allocated to this program, which is growing disproportionately; ii. To enhance the efficiency and equity of health spending, the DPL would support policies to (a) introduce more predictable fiscal rules to finance health; (b) improve the methods for contracting with providers and the capacity to monitor their performance; and (c) grant health insurance coverage to social assistance beneficiaries. The DPL would also enhance transparency and accountability by supporting policies to improve the administration of social assistance programs and promoting the use of systematic formulas to allocate resources in selected social programs and services Has the Program Development Objective been changed since Board Approval of the Program? Yes No Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status Overview Progress achieved in the implementation of the program supported by the Social Sector Reform Development Policy Loan (DPL) is satisfactory. The objective of the DPL is to support policy changes to (i) improve the effectiveness of social safety nets, and (ii) enhance the efficiency and equity of health spending, in a fiscally sustainable environment. In particular, the proposed reform agenda supported by this DPL includes the following: i. To improve the effectiveness of social safety nets, the DPL would support policies that (a)strengthen the mechanisms to allocate funds and select beneficiaries in the main social assistance program; (b) introduce incentives for investing in human Page 1 of 7 The World Bank Report No: ISR5890 capital by providing an additional benefit linked to school enrollment and attendance for families with school age children; (c) initiate the process to create a unified registry of beneficiaries of social assistance programs; and (d) change the indexation formula of the disability benefits program, to control the share of resources allocated to this program, which is growing disproportionately; ii. To enhance the efficiency and equity of health spending, the DPL would support policies to (a) introduce more predictable fiscal rules to finance health; (b) improve the methods for contracting with providers and the capacity to monitor their performance; and (c) grant health insurance coverage to social assistance Public Disclosure Copy beneficiaries. The DPL would also enhance transparency and accountability by supporting policies to improve the administration of social assistance programs and promoting the use of systematic formulas to allocate resources in selected social programs and services This DPL, a single tranche operation, supported a medium-term reform program in social assistance and health: On social assistance, the design of the Bank’s overall support program for Albania included policy and implementation support. The DPL supported the adoption of broad policy changes in social programs through revised legislation. More specifically, the DPL supported (i) a more equitable and transparent allocation of resources from the central to the local governments for the Ndihma Ekonomike program on the basis of poverty related criteria; (ii) a more equitable and transparent eligibility criteria (by reducing errors of exclusion and inclusion) in the selection of eligible beneficiaries for the Ndihma Ekonomike program by defining household eligibility criteria based on a unified scoring formula with weights across variables associated with poverty status;(iii) a more efficient and transparent social assistance program by initiating the creation of an automated national registry of applicants and beneficiaries of social assistance programs to strengthen administration and contribute to informed and timely policy making; (iv) the creation of enabling environment for a more pro- active social assistance program by introducing incentives for Ndihma Ekonomike beneficiary families to enroll children in school and ensure daily attendance: an (v) a more fiscally sustainable social assistance program by controlling spending on disability assistance program through linking indexation of disability benefits to inflation. All of these policy changes will enhance effectiveness of social assistance programs in reducing poverty while also promoting transparency. The DPL document, while supporting the policy changes, indicated the need for a follow-on operation to support the implementation of policy changes. Accordingly, the Social Assistance Modernization Project (SAMP), which was approved by the World Bank's Board of Directors on April 3, 2012, will support the implementation of the policy changes that were supported by this DPL. The SAMP will support implementation of reforms both in the Ndihma Ekonomike (poverty focused) and the disability assistance programs through improvements in targeting, eligibility and coverage, benefits structures, benefits administration and management of information; and oversight and controls. On health, the DPL supported a thorough revisi on of the existing legislation, ensuring policy changes in a number of key areas, including: (i) ensuring access to health care services for poor households, (ii) increasing efficiency of the Health Insurance Institute as purchaser of health care services, and (iii) introducing a more systematic approach to health financing. These policy changes are considered crucial for the continuation of the overall health sector reforms. Implementation of these reforms is well complemented by the activities supported under the on-going Health System Modernization Project; such as: quality improvement activities, establishing information systems for the Health Insurance Institute, introducing performance based contracting and monitoring, as well as training of managers and service providers. Results Results Indicators Public Disclosure Copy Page 2 of 7 The World Bank Report No: ISR5890 Indicator Name Core Unit of Measure Baseline Current End Target Key Performance Indicator-KPI-1: Authorizing Text Value Allocation of grants based on The Social Assistance Authorizing environment environment established for a more a predictable methodology Framework Law (April 2011) established for a more Public Disclosure Copy transparent and predictable block grant does not exist established the authorizing transparent and predictable allocationon the basis of poverty indicators environment for a more block grant allocation on the transparent and predictable basis of poverty indicators block grant allocation on the basis of poverty indicators Date 29-Feb-2012 30-Apr-2011 30-Apr-2012 Comments Block grants are allocated ACHIEVED The target is met. There is based on a complex formula authorizing environment for and expert opinion of allocation of block grants on technical staff in Ministry of the basis of poverty Labor, Social Affairs and indicators. Equal Opportunities KPI-2: Increase percentage of the poor Percentage Value 22.00 22.00 30.00 receiving means-based social assistance Date 31-Dec-2008 31-Dec-2008 30-Apr-2012 (status: 22% in 2008; target 30% in 2012) Comments The indicator relates to the IN PROGRESS. The The coverage of poor by the coverage of Ndihma Government is working Ndihma Ekonomike program Ekonomike program, the main towards implementing reforms is estimated to increase to poverty focused program in supported by this DPL. 31% by mid-2013 following Albania. Coverage estimate is Currently, the latest the implementation of the based on LSMS 2008. household survey available is improved targeting system in LSMS 2008. The next LSMS the pilot regions (that cover is scheduled to be conducted about 50% of the population in October 2012. Results from that are relatively poor). The the LSMS 2012 will only be coverageof the Ndihma availablein 2013. Ekonomike program is Administrative data suggests estimated to increase to 37 % that overall coverage is by end 2014 following the increasing. nationwide implementation of social assistance reforms. The Government is moving in Public Disclosure Copy the right direction in implementing social assistance reforms and this target is likelyto be achieved KPI-3: Savings in disability benefit spending of Percentage Value 0.99 0.92 0.94 at least 5 percent of its budget by 2012 Date 31-Dec-2010 31-Dec-2011 30-Apr-2012 Comments This indicator relates to ACHIEVED. Total spending Savings in disability benefit spending spending as a on disability assistance spending of at least 5 percent percentage of GDP. benefits is 0. 92% of GDP of its budget by 2012, Page 3 of 7 The World Bank Report No: ISR5890 Total spending on disability based on estimate for meaning that spending would assistance program is 0.99 % spending from MOLSA. go from 0.99 percent of GDP of GDP. to 0.94 percent of GDP. Data source on disability Saving ondisability spending Public Disclosure Copy assistance spending is accounting for 0.7% of GDP is The target is met. Spending MOLSA administrative data realized. This accounts for a on disability assistance decrease in spending by 7.1% benefits was 7.1% lower in from 2010 to 2011 (estimate). 2011 compared to spending The indexation rule for in 2010. disability assistance benefits was changed from wage indexation (plus ad-hoc adjustments) to inflation indexationin July2010 by a Council of Ministers Decision. Savings in spending realized mainly due to the change in this rule. KPI-4: Percentage of payments to hospitals Text Value No payments to hospitals 87 percent of payments to 87 percent of payments to channeled through HII remained constant or made through HII hospitals made through HII hospitals made through HII increased (in 2012) Date 31-Dec-2008 31-Jan-2012 30-Apr-2012 Comments All payments to the hospitals ACHIEVED. All payment to The target is met. were made through the the hospitals, with the 87% of all payments to Ministry of Health exception of payments related hospitals are channeled to capital investments are through HII. In addition, HII channeled through the HII. transfers the financing based on performance contracts with all hospitals. KPI-5: Health spending as a share of Text Value 4.2 % Data not available. Data not available. household spending for the poor decreased by Date 30-Jun-2008 05-Apr-2012 30-Apr-2012 at least 5 percent Comments The data source is the last A survey is being conducted A survey is being conducted HBS - 2007 (which was by the Ministry of Health, by the Ministry of Health, published in 2008) which includes also this which includes also this Public Disclosure Copy indicator. The indicator will be indicator. The indicator will be reported by end ofMay 2012 reported by end ofMay 2012. and will be taken into account in the ICR. Outcome Indicator-OI-1: Increase share of Percentage Value 42.00 42.00 60.00 benefits accruing to the poor (baseline: 42 Date 31-Dec-2008 31-Dec-2008 31-Dec-2013 percent in 2008; target: 60 percent in 2013 Comments The indicator relates to the IN PROGRESS. The The share of Ndihma targeting accuracy of Ndihma Government is working Ekonomike benefits accruing Ekonomike program, the towards implementing reforms to the poor is estimated to main poverty focused supported by this DPL. increase to 45 % by mid-2013 Page 4 of 7 The World Bank Report No: ISR5890 program in Albania. Currently, the latest following the implementation Estimateof the indicator is household survey available is of the improved targeting based on LSMS 2008. LSMS 2008. The next LSMS system in the pilot regions. is scheduled to be conducted The share of benefits Public Disclosure Copy in October 2012. Results from accruing to the poor is the LSMS 2012 will only be estimated to increase to 67% availablein 2013. by end 2014 following the nationwide implementation of reforms. The Government is moving in the right direction in implementing social assistance reforms and this target is likely to be achieved. OI-2: Number of Disability beneficiaries as Text Value Number of disability Number of disability Number of Disability percent of population stabilizes by 2014 assistance beneficiaries 4.3 assistance beneficiaries 4.5 beneficiaries as percent of % of the population % of the population population stabilizes by 2014 Date 31-Dec-2010 31-Dec-2011 31-Dec-2014 Comments Number of disability IN PROGRESS. There was a slight increase in assistance beneficiaries (all the number of beneficiaries as categories including work % of the population from 2010 invalids) based on to 2011 (0.2 percentage administrative data from points) The percentage MOLSA. Population data increase is lower compared to (3,194,047) is from INSTAT the increase in the previous years. The percentage increase from 2008 to 2009 and from 2009 to 2010 was both 0.3 percentage points. This indicates that the pace of the increase has slowed down. The target is likely to be fully met once the reforms are fully implemented. The Government is working Public Disclosure Copy towards strengthening the eligibility criteria and processes in order to ensure that the disability benefits reach the truly disabled. OI-3: Increase attendance of students from NE Text Value School attendance rate of School attandance rate of beneficiary families (baseline: 52 percent in children of Ndihma children of Ndihma 2010; target: 70percent by 2013) Ekonomike beneficiaries is 52 Ekonomike beneficiaries is 70 % % Date 31-Dec-2010 31-Dec-2013 Page 5 of 7 The World Bank Report No: ISR5890 Comments The indicator denotes the NOT ACHIEVED. The Social The Social Assistance school attendance of children Assistance Framework Law Framework Law established of Ndihma Ekonomike established the enabling the enabling environment to beneficiary households. environment to support the support the school attendance Public Disclosure Copy school attendance of of children of Ndihma childrenof Ndihma Ekonomike Ekonomike beneficiary beneficiary households. The households. The Government plans to Government plans to implement this second implement this second generation reform once generation reform once sufficient progress is made sufficient progress is made inthe first generation reforms inthe first generation reforms such as the improved such as the improved eligibility criteria and eligibility criteria and establishing an automated establishing an automated management information management information systeminline with World Bank systeminline with World Bank advice. This will likely take advice. This will likely take place in 2013-14. place in 2013-14 OI-4: 100 percent Ndihma Ekonomike recipient Text Value Ndihma Ekonomike recipients All Ndihma Ekonomike 100 percent Ndihma received Health Insurance do not have access to Health beneficiaries to receive full Ekonomike recipient receive Insurance Health Insurance (covered by Health Insurance the state budget) Date 31-Dec-2010 24-Feb-2011 30-Apr-2012 Comments The Ndihma Ekonomike ACHIEVED.The Health The target is met. recipients have access to Financing Law (February 24, health care on the same 2011) established the right for grounds as the whole all Ndihma Ekonomike population; without any beneficiaries to receive special benefits fullHealth Insurance (covered by the state budget) OI-5: Transfer of funds to HII in the National Text Value The transfer of funds to the The transfer of funds to the Transfer of funds to HII in the Budget maintained at same level as previous HII for the year 2010 has HII for the year 2012 is: National Budget maintained at Public Disclosure Copy year or increases been: ALL Million same level as previous year ALL Million 19,402.00 22,498.00 or increases Date 31-Dec-2010 31-Jan-2012 30-Apr-2012 Comments ACHIEVED. During 2011, The target is met. The state transfer of funds to HII budget funds transferred to increased, compared to the the HII have increased previous year (reaching to continuously during last years. ALL Million 20,727.00) Data on Financial Performance (as of 15-Sep-2011) Page 6 of 7 The World Bank Report No: ISR5890 Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P116937 IBRD-80600 Effective 28-Apr-2011 20-Jun-2011 25-Aug-2011 30-Apr-2012 Public Disclosure Copy Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P116937 IBRD-80600 Effective USD 25.00 25.00 0.00 25.01 0.00 100.00 Tranches Tranche 1 Amount (USD) Expected Release Date Actual Release Date Status 0 Pending Released Key Decisions Regarding Implementation Not applicable. Restructuring History There has been no restructuring to date. Related Operations There are no related projects. 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