UNIVERSITY OF ANTWERP

INSTITUTE OF DEVELOPMENT POLICY AND MANAGEMENT

Dissertation STATUS AND PERCEIVED PERFORMANCE

OF THE MINISTRY OF DEVELOPMENT AND SOCIAL INCLUSION (MIDIS) OF PERU:

A Political Economy Analysis

Maria del Carmen FERNANDEZ

Master of Development Evaluation and Management Supervisor: Prof. Dr. Nadia Molenaers Academic Year 2014-2015

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UNIVERSITY OF ANTWERP

INSTITUTE OF DEVELOPMENT POLICY AND MANAGEMENT

Dissertation STATUS AND PERCEIVED PERFORMANCE

OF THE MINISTRY OF DEVELOPMENT AND SOCIAL INCLUSION (MIDIS) OF PERU:

A Political Economy Analysis

Maria del Carmen FERNANDEZ

Master of Development Evaluation and Management Supervisor: Prof. Dr. Nadia Molenaers Academic Year 2014-2015

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Preface This dissertation is the last building block for the completion of the Master of

Development Evaluation and Management. The selection of the topic was

motivated by my especial interest on social inclusion and poverty alleviation.

First of all, I would like to thank my mother and brother; without their

unconditional help I would not have been able to study the master. I am also

especially grateful to Jean-Gabriel for his constant support and to my fellow

classmates for their valuable friendship. My gratitude also goes to my

supervisor, Professor Nadia Molenaers for her guidance and encouragement

throughout the writing of the dissertation. And last but not least, I would like to

thank Jano and Jorge for their patience with my constant requests and valuable

contributions.

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Table of Contents

List of tables…………………………………………………………………...…...2

List of figures………………………………………………………………………2

List of charts……………………………………………………………………….2

List of acronyms…………………………………………………………………...3

Executive Summary………………………………………………………………..4

1. Introduction……………………………………………………………………..5

2. Methodology……………………………………………………………………7

3. Literature review………………………………………………………………..9

4. Commitment to reform: how the MIDIS was designed and empowered?.........13

4.1. MIDIS: the rector authority for social inclusion policy…………………..15

4.2. Implementation of social programmes: high budgetary allocation……….19

4.3. Technocratic capacity……………………………………………………..25

4.4. Legal framework………………………………………………………….27

4.5. Dealing with opposition and losers of the reform………………………...28

5. MIDIS’ perceived performance………………………….……………………30

5.1. Policy design and focalisation………………………….…………………31

5.2. Technocratic management………………………….…………………….33

5.3. Inter-sectorial and inter-governmental coordination……………………...35

5.3.1. Inter-sectorial coordination at the national level………………….36

5.3.2. Inter-governmental coordination………………………………….39

5.4. Implementation of social programmes………………………….………...42

6. Sustainability considerations………………………….……………………….50

7. Conclusions………………………….………………………….……………..52

References…...…………………….………………………….……………….55

Appendices………………………….………………………….…………...…59

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List of Tables Table 1: Selection criteria for interviewees

Table 2: Evaluation of social programmes transferred to MIDIS

List of Figures Figure 1: Programmes and functions transferred to the MIDIS

Figure 2: Strategic axes according to the life cycle

List of Charts Chart 1: Public Budget by Social Sector at the National Level (2011-2015)

Chart 2: Social Protection Budget (2011-2015)

Chart 3: Budget allocation per social programme (2012-2015)

Chart 4: Number of users per social programme (2011-2015)

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List of Acronyms APCI Agencia Peruana de Cooperación Internacional (Peruvian International Cooperation Agency) AN Acuerdo Nacional (National Agreement) BCRP Banco Central de Reserva del Perú (Central Bank of Peru) CIAS Comisión Interministerial de Asuntos Sociales (Inter ministerial Commission for Social Matters) CULTURA Ministerio de Cultura (Ministry of Culture) FED Fondo de Estímulo al Desempeño IDB Inter American Development Bank INEI Intituto National de Estadística e Informática (National Institute of Statistics) GIZ German Technical Cooperation Agency MEF Ministerio de Economía y Finanzas (Ministry of Economy and Finance) MIDIS Ministerio de Desarrollo e Inclusión Social (Ministry for Development and Social Inclusion) MIMDES Ministerio de la Mujer y Desarrollo Social (Ministry of Women and Social Development) – in 2011 it became the MIMP MIMP Ministerio de la Mujer y Poblaciones Vulnerables (Ministry of Women and Vulnerable Population) MINDEF Ministerio de Defensa (Ministry of Defense) MINEDU Ministerio de Educación (Ministry of Education) MINJUS Ministerio de Justicia y Derechos Humanos (Ministry of Justice and Human Rights) MINSA Ministerio de Salud (Ministry of Health) PCM Presidencia del Consejo de Ministros (Presidency of the Counsel of Ministries) PNS Peruvian Nuevos Soles (S/.) [Currency of Peru] RENIEC Registro Nacional de Identidad SINADIS Sistema Nacional de Desarrollo e Inclusión Social (National System for Development and Social Inclusion) SISFOH Sistema de Focalización de Hogares (Households Focalisation System) SM Sello Municipal VIVIENDA Ministerio de Vivienda, Construcción y Saneamiento (Ministry of Housing, Construction and Sanitation) WB World Bank      

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Executive Summary   Since 2001 Peru has enjoyed constant economic growth, which has contributed to

half Peru’s overall poverty rates from 52.5% in 2003 to 24.8% in 2012.

Nevertheless, inequality, poverty and access to social services vary immensely

according to the region, being the indigenous population of the Sierra and Selva the

most affected. Previous governments have largely neglected social service provision

for this population. In this context, in 2011 the newly elected President Humala

introduces a social inclusion reform. The most important element of the reform is

the creation of the Ministry of Development and Social Inclusion (MIDIS), which

aim is to design, coordinate, and lead the government’s arrays of targeted actions on

development and social inclusion that cannot be achieved by sector-based one-size-

fits-all social policies.  

The research objective is to go deeper into the processes of this reform and building

of institutional capacity of the MIDIS. Specifically, there are two research

questions: (i) How President Humala’s political commitment to reform contributed

to the creation and strengthening of the institutional capacity of Peru regarding

social inclusion, and what are the elements in which this commitment is translated?

And (ii) how do qualified stakeholders perceive the MIDIS’ performance

(institutional capacity)? The present research uses only qualitative research

methods, based on desk study and field data collection (in-depth interviews with

‘elite’ politicians and government functionaries).

Humala’s political commitment was (and still is) crucial for building the

foundations for a deep social inclusion reform in Peru. His commitment to reform

was manifested on the creation of the MIDIS and the technical and political

empowerment with which it was endowed for fulfilling its policy-making role:

establishing it as the rector authority for social inclusion policy, high budgetary

allocation, strong technical capacity and a legal framework (not finalised, but it is a

priority).

Since the creation of MIDIS, there were high expectations regarding its

performance from all fronts: Humala’s voters, government functionaries, foreign

governments and international organisations. Did the MIDIS’ performance fulfil

these expectations? This is not a straight answer; it depends on the elements at

consideration –policy design, technocratic capacity, coordination and articulation

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functions, implementation of social programmes– and their development in time. In

brief, the MIDIS’ performance can be summarised as technically well-designed

policy (the ENDIS), focalised and wide-reach intervention according population

needs, high technocratic management, trade-off between policy and implementation

functions during the first two years of operations (2012-2013), incipient capacity for

intersectoral and intergovernmental coordination, good social programmes’ design

(specially in comparison with previous ones). The specific performance of every

social programme managed by the MIDIS varies considerably.

Finally, there are a number of sustainability issues which are worth to take into

account: continuity of social programmes, social programmes retention, settling of

the legal framework, human resources retention and positive positioning in the

public opinion.

 

 

1. Introduction

Since 2001 Peru’s economy has been stronger than all others in the region, with its

growth due mostly to the export of natural resources. High economic growth, along

with social programmes, has helped to half Peru’s overall poverty rates from 52.5%

in 2003 to 24.8% in 2012 (ECLAC, 2014). Nevertheless, inequality, poverty and

access to social services vary immensely according to the region, being the

indigenous population of the Sierra and Selva the most affected. In 2012, 53% of

the sierra population was bellow the poverty line, while income poverty in the coast

was only 16.6% (INEI, 2014). In 2012, Peru occupied the 8th place on poverty rates

in Latin American (ECLAC, 2014).

President Humala’s administration has been labelled as ‘the government of the

social inclusion’, making of it a crosscutting theme for the state’s policy in all

sectors. One of the main elements of the social inclusion reform was the creation of

the Ministry of Development and Social Inclusion (MIDIS), which aim is to design,

coordinate, and lead the government’s arrays of targeted actions on development

and social inclusion that cannot be achieved by sector-based one-size-fits-all social

policies (Inter-American Development Bank, 2013). In this line, under Humala’s

strong political support and only three months after he took charge of the

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presidential office, in October 2011 the Peruvian Congress approved the creation of

MIDIS.

There are a number of factors that can influence the viability of reforms; some are

not strictly under the reformer’s control (such as macroeconomic conditions,

availability of technical capacity, etc.) and others yes (such as leadership, way of

dealing with opposition, empowerment of new institutions, etc.). Although both

type of factors are important, this research and its empirical contribution concentrate

on the latter. Specifically, there are two research questions: (i) How President

Humala’s political commitment to reform contributed to the creation and

strengthening of the institutional capacity of Peru regarding social inclusion, and

what are the elements in which this commitment is translated? And (ii) how do

qualified stakeholders perceive the MIDIS’ performance (institutional capacity)?

The relevance of this research is twofold: scientifically and policy wise.

Scientifically, it provides an empirical contribution to political science and

development studies regarding social policy reform from the Peruvian experience,

which is considered a successful and well-known case of implementation of social

inclusion policies (Székely, 2014; IDB functionary, interview, 1 July 2015). Policy

wise, it is also relevant, as since 2008-09 with the economic crisis, many countries

have realised of the need of professionalise the management of social programmes

and of the problems (also economic) that could come if inequality is not tackled (C.

Kersting, interview, 9 July 2015). In this regard, the research is important for Peru,

given the high inequality levels existing in the country; for other countries,

especially from Latin America, with which the Peruvian government is already

sharing its experience (P. Bustamante, interview, 7 July 2015; IDB functionary,

interview, 1 July 2015); and for international organisations or international

cooperation agencies, as the demand of monetary and non-monetary aid and support

directed to social inclusion have increased in the past years (C. Kersting, interview,

9 July 2015).

The structure of the paper is as follows: Chapter two is about the methodology.

Chapter three is a literature review regarding the main concepts that will be used in

the analyses chapters, namely commitment to reform and building of institutional

capacity. Chapter four addresses the first research question, developing the most

important manifestations of Humala’s commitment to social inclusion reform.

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Chapter five addresses the second research question, i.e. how qualified stakeholders

perceive the MIDIS’ performance (institutional capacity). Chapter 6 deals with

some sustainability considerations regarding the MIDIS and its social programmes.

2. Methodology

The research objective is to go deeper into the processes of policy reform and

building of institutional capacity of the MIDIS, rather than assessing the soundness

of the policy content per se or the achievement of results linked to specific

quantitative indicators. Thus, the present research uses only qualitative research

methods, based on desk study and field data collection. The deskwork entailed the

review of literature related to commitment to reform and institutional capacity

(chapter 3), as well as the review of official and non-official documents and reports.

Besides, in order to go deeper into the processes mentioned above, it was needed

interviews with relevant stakeholders who are or were part of those processes

(fieldwork) This research’s methodology is based on previous research studies on

perceived leadership and performance of institutions, such as Chaban et al. (2013),

Torney (2014), Elgström (2007), among others. Perceptions are an important source

of information, as they express how reality is seen and pondered by inner interests

and motivations, and also are a guide for policy and decision-making (Elgström,

2007; Chaban et al., 2006).

The fieldwork consisted on in-depth interviews with 19 ‘elite’ politicians (ministers

and vice-ministers), government functionaries (directors, executive and technical

secretaries), international organisations functionaries, high level consultants,

journalists and academia representatives. The interviews were held between the 1st

and 23rd July 2015 in Lima, Peru. In order to assure sufficient representativeness

and variety of opinions, the interviewees were selected according to non-exclusive

criteria, shown in table 1 (the last column indicates the number of people who

matched the criteria):

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Table 1: Selection criteria for interviewees

Criteria Referred as (in the text) People a. Closeness to Humala’s decision-making team that created the MIDIS

‘Humala’s team member’ 2

b. Be or have been part of the MIDIS team ‘MIDIS’ team member’ or Name

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c. Be part of a supra or inter ministerial government agency

‘[Agency] functionary’ 2

d. Be part of an opposition party ‘Opposition party member’ or Name

2

e. Work or have worked in a ministry or government agency that has coordination links with the MIDIS

‘[Ministry or agency] functionary’

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f. Be part of an international organisation that has links with the MIDIS

‘[International organisation] functionary’ or Name

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g. Work in means of communication – expert in political issues

Name 1

h. Be or have been a consultant to the MIDIS ‘Consultant’ 3 i. Be or have been part of a inter-governmental coordination agency

Name 1

Due to the importance of their positions, and the sensitiveness of the issue, specially

being just a few months before the 2016 elections, most of the interviewees

preferred to not be identified by their names. Therefore, in the text these are referred

by their general position (as shown above in table 1). The interviewees who did not

mind being referred by their names are:

Name Position Paola Bustamante MIDIS’ Minister (Feb 2014 – present) Fernando Bolaños MIMP Vice-minister (Aug 2014 - present Patricia Balbuena CULTURA Vice-minister (Nov 2013 – present) Yehude Simón Congressman (opposition party) (Jul 2011 – present),

Former Prime Minister (Oct 2008 – Jul 2009) Eduardo Ballón Technical Secretary of the National Assembly of Regional

Governments (ANGR) Former Vice-minister MIMDES (Jul 2011 – Jan 2012)

Luis Olivera Former Director of the Peruvian Agency for International Cooperation – APCI (Mar 2012 – Mar 2014)

Christof Kersting Programme Director Social Protection for Latin America and Caribe - GIZ

Jaime de Althaus Journalist and political analyst The interviews’ questions were open and in accordance to the respondent’s

background and/or position. The questions were related to:

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• Decision-making processes associated with the creation of MIDIS and the

elements by which the new ministry was empowered (related to commitment to

reform and incipient institutional capacity).

• The MIDIS’ performance (related to institutional capacity).

• Sustainability of the ministry in the next administration.

With the explicit verbal consent of the interviewees, most of the interviews were

recorded; only three were not because I did not see it opportune. After each

interview I wrote a report, which also served as a starting point for following

interviews. Once all the interviews were over, the answers were grouped according

to different categories and compared, and then triangulated by drawing from official

documents and other relevant publications.

Limitations of the research

• The answers of the interviews may be biased due to their high up positions,

sensitiveness of the topic (social inclusion reform is considered the main ‘asset’

of Humala’s government) and political timing of the interviews (before the

April 2016 presidential elections). These factors may have influenced the

respondents to more extreme and/or more cautious answers.

• For reasons of time and available resources, the fieldwork was conducted only

in Lima with representatives of the central government. There were not

interviews at the regional or local levels, where inter-governmental

coordination and implementation of social programmes take place.

Nevertheless, some of the interviewees manifested their views on the MIDIS’

performance regarding these, based on their work experience in the field.

• Although they were contacted, some government functionaries relevant for the

research were not available for interview, either for lack of time or lack of

interest. For example, representatives of the ministries of housing, agriculture,

energy and mining, and labour.

3. Literature review Since the mid 1990s, Latin American countries have experienced a change in

the agenda, shifting the emphasis from believing that economic growth by itself

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can solve the social problem of poverty and inequality, to actively giving priority to

social policy (Szekely, 2010). This was translated in the undertaking of important

social reforms1, which led –and still does– to a long and diverse political agenda

(Graham et al., 1999).

Policy reform is a complex process due to a multiplicity of factors that can

constrain or support the reform: the environmental context in which the reform

originates; the multiplicity and variety of actors involved through the stages of the

reform, each one with their own ideology, motivations, incentives and interests; the

institutions and political practices in place, such as clientelism; the specific

circumstances in which the agenda is set; the particular policy characteristics; its

nation-wide and long-term scope and implications, etc. (Grindle and Thomas, 1999;

Inter-American Development Bank, 2006). The challenges, opportunities, potential

problems and the resources for the implementation and sustainability of policy

reform that arise from each of them vary considerably. Therefore, successful social

reforms depend not only on determining what needs to be done, but perhaps more

importantly, on how it is to be done (Gonzalez and Munar, 2003).

This research looks at two elements associated to how the reform is to be done:

political commitment to reform and building of institutional capacity. These two

elements are essential for successful reforms. As put by a World Bank’s document

‘‘[s]uccessful reform (…) depends primarily on a country’s institutional and

political characteristics’’ (World Bank, 1998: 53).

During the electoral campaign, candidates can take advantage of social problems

and the need of reform for rising to power (for example, by criticising the

ineffectiveness of the government), but soon forget about their promises once they

get elected. This is partly because social reforms are complex and politically risky

processes, which few politicians are ready to confront. True commitment to reform

is credible if the new ruler honours his/her commitment at the time of performance

(Shepsle, 1991).

Reformers need a high level of commitment and strong leadership for carrying out

the reform from the beginning to the end, or at least till they are in power, as some

reforms can take a decade to put in place (World Bank, 2008). According to

1 Some cases of social reforms are: education and social security in Uruguay (Filguiera and Moraes, 1999), pension in Argentina (Hujo and Rulli, 2014, and Torre and Gerchunoff, 1999), health and

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Graham et al. (1999) and Nelson (1999), leadership and commitment to reform

encompasses an essential set of actions and decisions, such as:

• Setting of priorities for the content of the reform as well as for the actions to

be undertaken to promote change;

• Have an active role in selecting and managing the reform team;

• Make critical choices regarding how to manage opposition, attract support,

whether adopt a low or high profile strategy, etc.

• Take risks of uncertain future payoffs or misbalancing the current welfare

triangle2;

• Seek ways by which enhance chances of success by creating new stakeholders

(supporters);

• Understand the processes of political decision-making fully enough to select

actions that effectively influence that process;

• Continuous and consistent political support; and

• Provide the new organisations or institutions (or existing ones) with the

necessary empowerment.

Besides these, and of particular interest for this research, Gonzales and Munar

(2003: 11) suggest innovation as a strategy for the reformer: “[i]nnovative poverty

alleviation programs may appeal to governments trying to by-pass the party-

captured ministries, and in doing so, acquiring an autonomous base of political

support. As Geddes put it “(...) the use of innovative policies and new programs to

attract support – as opposed to particularistic favors – is especially appealing to

sitting president because they have a virtual monopoly on this weapon in the

political game” (Geddes, 1994:141)”. Therefore, according to the specific context,

the reformer has to choose (if possible) on whether working within existing (formal

and informal) institutions or to create new ones that could implement the reform

more effectively and efficiently (Graham et al., 1999).

However, commitment to reform is a necessary but not sufficient requisite for

successful reforms; institutional capacity is also needed (Morrissey, 1995). This is

one of the reasons why, since the 2000’s, there is a growing concern by Latin

American governments and by international organisations, such as the United 2 Welfare triangle refers to the three main actors (besides the direct service users) that usually benefit from social service delivery: the government, the state employees (providers) and the private businesses (Gonzalez and Munar, 2003).

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Nations and the World Bank3, both for strengthening the authorities’ capacity and

for improving the institutions related to social policy (Szekely: 2010).

From a rather formalistic approach, but nonetheless useful to certain extent, Szekely

(2010) proposes ten specific elements for building institutional capacity for social

development, specifically in the context of Latin American countries. The first

element refers to a political agreement for fighting poverty, the second and third to

the objectives and instruments for accomplishing it, the fourth, fifth, sixth and

seventh to the obligations and rights of the actors involved, and the last three refer

to norms and rules:

1. The establishment of a ministry of social development, which main purpose

is to fight poverty.

2. Establishment of specific objectives within a national plan.

3. Definition of indicators to measure the achievement of objectives.

4. Juridical frame that determines responsibilities and faculties per actor.

5. A sufficient budget.

6. Explicit mechanisms of coordination intra and inter governmental levels.

7. Social audit and instances of citizens’ assistance and participation.

8. Rules for programmes’ operations.

9. Beneficiaries database.

10. Legal framework for controlling civil servants’ conduct.

Besides these elements, the performance of the implementers of the reform is also

important both for building institutional capacity and for the overall success of the

reform. As Morrissey (1995: 638) puts it: “the political spirit may be willing but the

bureaucratic flesh is weak”. In fact, in many cases reforms have failed because of

the opposition or lack of capacity of the service providers (Gonzales and Munar,

2003). Bureaucracies can exert their power at different stages of the reform. During

its design, decision-makers may be concerned about how particular changes will

affect the power, prestige, budget, career options, etc. of relevant bureaucratic

groups, and try to lessen its effects over ‘loser’ groups. During the reform’s

implementation phase, the bureaucracy can interrupt it, either on purpose or due to

lack of capacity; it can erode the reform because of clientelistic accommodation and 3 The UN project (2013-2015) “Time for equality: strengthening the institutional framework of social policies”. And also, the World Bank document “Empowering people by transforming institutions: social development in World Bank operations” (2005) and its mid-term implementation progress report (2011).

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can also affect negatively the sustainability of it (Grindle and Thomas, 1991).

Therefore, there is a reasonable consensus that social sector reform initiatives

directed at attaining a more efficient and equitable service provision are achieved by

a merit-based selection of employees (Gonzales and Munar, 2003), opposed to

clientelist distribution of public employment.

Other elements of institutional capacity are related to planning, budgeting and

management by results, evidence-based policies (which includes timely data

collection and analysis), accountability and strong monitoring and evaluation

systems (Inter-American Development Bank, 2014).

4. Commitment to reform: how the MIDIS was designed and

empowered? Social inclusion reform has been a priority in the agenda of President Humala

(2011-present)4, as he realised the need of a social reform in order to serve better the

excluded population, mainly in the rural Selva and Sierra of Peru (see appendix 1).

As he declared in his inauguration speech in July 2011: “I declare before Congress, former presidents gathered here and the Peruvian people […] that I will devote all my energy to lay the foundation to permanently erase our history the lacerating face exclusion and poverty by building a Peru for everyone, always attentive to the most fragile of our brothers and sisters. I will demand the same commitment and the same energy to the team that accompanies me on the Executive.”

The reform was part of his political commitment for social development, and it

counted with his continuous and consistent political support throughout the whole

reform process. Thus, four years later, in the traditional 28 of July presidential

speech to the nation, he stated:

“Since the beginning of our mandate […] [a]ll our efforts have been directed to each of our compatriots in every corner of our country part of this nation feel called Peru, with the same rights to education and health services , to be connected and integrated with their land and their culture , to be respected for their work and receive a fair wage and the state providing opportunities to exploit its capabilities. After four years of governance, more than one million 300 thousand Peruvians have left poverty and incorporated to productive activity of the country, strengthening our economy strong and stable, that even in times of uncertainty, growing on average above giants of the region, such as Brazil and Mexico.”

4 The presidential period in Peru is 5 years.

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The rest of the one-hour speech, he listed all the achievements of his government –

corroborated with very detailed data– regarding social development (Humala,

2015).

According to a member from Humala’s advisory team (Interview, 8 July 2015) and

a consultant (Interview, 13 July 2015), the social inclusion reform implied critical

choices regarding the setting of priorities for its content, actions to be undertaken

for its implementation, the formation of a reform team, how to attract support, take

risks regarding future payoffs, manage opposition, etc., for instance:

• Whether to create a new ministry or to reform the existing Ministry of Women

and Social Development (MIMDES);

• If the choice were for a new ministry, what would be its main mission and

approach?

• How to give the new ministry enough political weight being a new player in the

government? How to achieve that different social sectors actually include the

new social inclusion policy in their interventions?

• Regarding the social inclusion policy, how to define it?  

• Should the new ministry be in charge of implementation of social programmes?

Are new programmes needed? Can the existing ones be improved? Which

programmes can be transferred to the new ministry? And from where?

• How to redesign the ‘inherited’ programmes and cope with the established

‘welfare triangle’ around them?

During the first round of elections, there was not yet the idea of a new ministry, but

of social programmes. The idea of a new ministry for social inclusion – the MIDIS

– came in the discussions of the group of advisors of the electoral campaign during

the second round of elections, and became a pivotal element of the social inclusion

reform (Humala’s team member, interview, 13 July). Once Humala was elected, he

formed a team to be in charge of the MIDIS’ design. The new ministry was to have

a technocratic management, in order to give it more legitimacy, autonomy, efficacy

and efficiency (Humala’s team member, interview, 13 July). This approach

contrasts with the traditional political and clientelist management for social policies

in Peru (Vela et al., 2014), having as a consequence, among other things, the

exclusion of social services for certain population (for example, because they are

not politically significant for elections or because the delivery of social services to

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remote areas is very costly), such as the native communities of the Selva (about 1%

of the total Peruvian population).

Therefore, the reform team members were selected for their technical background,

mainly economists working for financial and/or international institutions (Vela et

al., 2014). Among the most active members were5: Kurt Burneo (Minister of

PRODUCE), Juan Arroyo (IDB consultant), Daniel Schydlowsky (Superintendent

of Banking and Insurance), Luis Alberto Arias (Vice-president of Central Reserve

Bank of Peru) and Oscar Dancourt (former President of Central Reserve Bank of

Peru).

Being a critical element of the reform, the new ministry’s design was carefully

crafted in order to empower it with sufficient political support and technocratic

capacities to fulfil its role as the leading authority for social inclusion among inter-

sectorial and inter-governmental actors, a certainly challenging task for a new

player in the social sector. The main characteristics of the MIDIS’ design are the

combination of both policymaking and implementation of social programmes, high

budgetary allocation and high technocratic capacity. These characteristics also

support each other and contribute to a stronger empowerment of the new ministry.

The following sections (4.1 to 4.4) will explain them in more detail.

4.1. MIDIS: the rector authority for social inclusion policy

In order to understand better the MIDIS’ role as ‘rector authority’, we need to do a

brief introduction on the Peruvian regulation. Every ministry is regulated by the Act

for the Executive Power (Ley Organica del Poder Ejecutivo or commonly known as

LOPE), which establishes the administrative and functional systems of the State.

Administrative systems are logistics, human resources, accounts, budgeting, etc.

Functional systems on the other hand, and of more interest for this study, are a value

chain that allows the State to respond to the need (or problem) of the population,

such as education, health, sanitation, transport, etc. Every functional system has a

‘rector’6 or responsible (ministry) and other actors at different inter-governmental

5 The positions of the reform team member that are mentioned were the ones they had while being part of the reform team. More about the reform team in Tecnocracias sociales: el surgimiento de una tecnocracia en el Ministerio de Desarrollo e Inclusion Social (Vela et al., 2014). 6 Rector authority “is the technical and regulatory authority at the national level; dictates the rules and the procedures related to their field; coordinates its technical operation and is responsible for

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and inter-sectorial levels. The functional system determines the roles of each of the

actors, allowing them to interact among themselves. The links of interaction are

determined by a strategy or a state policy.

In Peru, no other ministry had tackled social inclusion. The existing functional

systems were universal in scope and did not distinguish between individuals;

therefore, did not necessarily solve the problems of the excluded population (section

5.1 describes in detail the criteria for defining this population). Thus, a new

functional system was created for social inclusion: the National System for

Development and Social Inclusion (Sistema Nacional de Desarrollo e Inclusión

Social – SINADIS). The rector of the system is the MIDIS and its strategy is the

ENDIS (more on the legal aspects of the MIDIS in section 4.4).

The main mission of MIDIS as rector authority is the conduction of the Peruvian

development and social inclusion policy (MIDIS, 2012a), which implies the

following functions:

(i) Proposal and design of social inclusion policies to be followed by inter-

sectorial and inter-governmental governmental actors (coordination and

articulation);

(ii) Monitoring and evaluating the implementation of policies and programmes

that fall under the social inclusion policy; and

(iii) Design and management of focalisation policy and users recording.

Bellow I will discuss these three roles in more detail.

Policy design, coordination and articulation

Intrinsically, social inclusion and development depends on inter-sectorial and inter-

governmental coordination (Inter-American Development Bank, 2013). At the same

time, other social ministries such as education, health, labour, housing, etc. tend to

focus on their own sector, following universal policies, which not necessarily reach

all segments of society. Besides, these ministries have to take care of other interests

(of labour unions, professional associations, etc.), many times forgetting the

population they are supposed to serve or with little manoeuvre capacity. This has

been the case of Peru, where rural areas of the Selva and Sierra have been neglected

for decades, having high levels of inequality as shown in appendix 1. Also, even its proper functioning within the framework of this Act, its special laws and supplementary provisions” (Act N°29158 for the Executive Power, 2007: Art. 44).

17

though in 2007 the decentralisation process started in Peru, and as a consequence of

it, the regional and local governments count with enough resources for their local

development, most of them lack the necessary capacity (planning, monitoring and

evaluation, technology, etc.) for the effective implementation of social programmes

(E. Ballón, interview, 16 July 2015; MEF functionary, interview, 14 July 2015;

MIDIS functionary, interview, 15 July 2015).

The MIDIS aimed to fill this gap, being empowered with the faculty of inter-

sectorial and inter-governmental articulation and coordination. This means that

every ministry that is related to social inclusion (education, health, transport,

housing, etc.), and regional and local governments should incorporate the social

inclusion component according to the policies set by the MIDIS. This is a difficult

task for a ministry, even more if it is a new one, given the long tradition of lack of

articulation and coordination of social policy in Peru, and clientelist practices

attached to them (Y. Simón, interview, 1 July 2015; Mostajo, 2010). Besides,

“other ministries may not like the coordination role of the MIDIS because it means

that they need to distribute their power, or are mainly focused on their own sector

and structure” (C. Kersting, interview, 9 July 2015). According to high level

functionaries of the government who were interviewed, the MIDIS is empowered

and legitimise at the policy level mainly by four factors:

First, by the political commitment of president Humala for social inclusion, which

also applies for the overall empowerment of the MIDIS (all the interviewees who

talked about this topic agreed on this). Peru has a presidential regime and as such,

the figure of the president concentrates a large amount of power and a wide range of

political manoeuvre, making him a crucial player in the political game. In fact, most

of the recent reforms undertaken in Latin America have been set in the agenda by

the presidents (Inter-American Development Bank, 2006). Nevertheless, political

support is necessary, but not sufficient, for empowering the MIDIS in its

coordination functions. It facilitates coordination at the central level (E. Ballón,

interview, 16 July 2015; PCM functionary, interview, 16 July 2015), where the

president chooses all the ministers; but the regional and local governments are not

necessarily of Humala’s party, and are not legally bound to follow the strategies he

prefers to support (unless the strategy has the status of state policy, as explained in

section 4.4). Thus, the MIDIS had to create mechanisms for incentivise the

subnational levels of government, such as the FED and SM (see section 5.3.2).

18

Second, the MIDIS counts with a technically well-designed social inclusion

strategy: the Estragegia Nacional de Desarrollo e Inclusion Social – ENDIS. The

strategy is built on a clear logical framework, base line and target indicators,

grounded on evidence and data analysis, giving high importance to monitoring and

evaluation. Besides, the MIDIS is the only ministry that, since its creation, has a

human development perspective (section 5.1 deals with it in more detail).

Third, its legal framework (when it is fully determined) will set the roles of each of

the governmental actors in matters of social inclusion, which will be binding.

Currently, the legal framework has some deficiencies as is explained in section 4.4.

Legal aspects give an action framework for the government actors of the sector.

However, formal regulation by itself is not enough for giving strength to the rector

for influencing the other actors in the implementation of policies (F. Bolaños,

interview, 14 July 2015).

The fourth, and a very important one, is that the MIDIS was empowered with

implementation of social programmes, which, on the one hand, allows the ministry

to quickly put into practice the social inclusion strategy, and on the other, to count

with financial resources for giving incentives to other government actors. But this

will be further developed in section 4.2.

Monitoring and evaluation

One of the most important thrusts of the guidelines for MIDIS’ new development

and social inclusion policy is the use of evidence-based decision making (MIDIS,

2012a). The Monitoring and Evaluation Office is under the Vice-ministry of Social

Policy and Evaluation. Its aim is to “improve the effectiveness, quality and

efficiency of development and social inclusion programmes and publishing its

results to citizens and decision makers together with the evidence obtained and

recommendations for action” (MIDIS, 2012a). Hence, the MIDIS supports the

implementation of good governance based on transparency, accountability and a

culture of performance evaluation in the public sector.

According to Trivelli7 (2014) the incorporation of evaluation in the structure of the

MIDIS was important for several reasons. First, because it was the first time the

topic was included at such a high level in a public entity. Second, because it made 7 It is relevant to mention that Carolina Trivelli was the first minister of MIDIS: from July 2011 till July 2013.

19

explicit the need to assess and improve interventions in social matters, particularly

those associated with targeted (or focalised) and temporary programs (social

programs). Third, because it opened the space to define targets, indicators and

accountability schemes for development interventions and social inclusion.

Design and management of focalisation policy and users recording

A focalisation policy consists of a “set of criteria, rules, procedures and

organisational arrangements that enable the State to assign public funds to priority

groups of the population” (MIDIS, 2012a). Thus, by focalisation, the MIDIS aims

to target the long excluded population (the PEPI, as explained in section 5.1),

closing inequality gaps, at the same time of guaranteeing that funds from social

programmes are spent only on them, avoiding lack of coverage or filtration. This is

rarely done by other ministries, which have a universal scope (F. Bolaños,

interview, 14 July 2015).

The tool used by the MIDIS for building a general register of households according

to socio-economic criteria is called SISFOH (Household Focalisation System).

4.2. Implementation of social programmes: high budgetary allocation

The MIDIS was also empowered by being the implementer of social programmes,

which means having a high budgetary allocation. As mentioned by the interviewees,

there were two main reasons for this, one technocratic and other political:

• From the technocratic point of view, to look into social policies into an integral

way: on the one hand, to have policy informed by permanent research –with

quantitative data analysis– and study of the social problem; on the other,

implementation of the policy through social programmes, avoiding

improvisation and lack of coordination and articulation (P. Bustamante,

interview, 7 July 2015; C. Kersting, interview, 9 July 2015; IDB functionary,

interview, 1 July 2015).

Being in charge of social programmes’ implementation allowed the MIDIS to

quickly translate into action the ENDIS, redesigning the existing programmes

to its guidelines, indicators, etc. This double-element structure of both policy

and provision, with their respective vice-ministries is also a model used by

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other social ministries, such as health and education (P. Balbuena, interview, 15

July 2015). Appendix 2 shows the MIDIS’ organisational chart.

Besides, according to the current minister of MIDIS, “when ministries have

only a partial panorama (either policy or implementation), their aim is to keep

on increasing. Instead, the raison d’être of the MIDIS since its creation is to

have an end, because when its aim of elimination of poverty has been achieved,

it means that the ministry is not needed anymore” (P. Bustamante, interview, 7

July 2015).

• From the political point of view, to give the MIDIS more political weight for

being the rector of social inclusion policy (Consultant, interview, 14 July 2015;

MEF functionary, interview, 14 July 2015).  As was put by a high government

functionary, in Peruvian politics, “whoever has the money, is the one who

rules” (F. Bolaños, interview, 14 July 2015), i.e. ministries need a certain size

in order to create and implement policies (for instance, for having a wide

territorial presence). Therefore, in order to give the MIDIS more political

weight among inter-sectorial and inter-governmental actors, the design team

saw the convenience (or need) of the MIDIS having the implementation of

social programmes (Consultant, interview, 13 July 2015). The reform team was

aware that ministries that do not count with a high budget (so called ‘small

ministries’), such as the Ministry of Environment (MINAM) created in 2009 or

the Ministry of Culture (CULTURA) created in 2010 do not have enough

negotiation capacity (Consultant, interview, 13 July 2015). This also happened

to the MIMP (former MIMDES), after almost all its programmes were

transferred to the MIDIS, as explained later in this section.

Transferring of social programmes

The MIDIS inherited five social programmes (Juntos, Wawa Wasi, Gratitud, Pronaa

and Foncodes) and assumed functions that were under other ministries or

government agencies, basically from the MIMDES, the Presidency of the Counsel

of Ministers (PCM), and the Ministry of Finance (MEF) as we can see in figure 1.

During the discussions of the reform team, “it was considered the possibility of

transferring even more programmes, but the team knew that the Cabinet [specially

health and education sectors] was not going to let it happen, as sectorial

competition is difficult to break” (Consultant, interview, 13 July 2015). Appendix 3

21

shows the programmes that are in the framework of the ENDIS (and therefore

‘eligible’ for been transferred to the MIDIS). Once the five selected programmes

became part of the MIDIS in January 2012 (MIDIS, 2012b), these were evaluated,

redesigned and reorganised by a special commission (more of this in section 5.4).

The names of three of the programmes were changed, most likely following a

political strategy: to increase the ownership of the social inclusion reform by

Humala’s administration; but also because their design was different.

Figure 1: Programmes and functions transferred to the MIDIS

from other government actors Source: Own elaboration based on the information gathered in the interviews (MEF functionary, 14 July 2015) and the MIDIS’ report on reorganisation of social programmes (MIDIS, 2012b).

The transferring of SISFOH’ management from the MEF to the MIDIS did not

imply much to the MEF (MEF functionary, interview, 14 July 2015). As part of the

rector role of MIDIS regarding the design and management of focalisation policy

and users recording, it was fitting that the SISFOH were under the MIDIS. This also

obeys to the following logic: if the MEF manages the focalisation policy, there

could a conflict of interests as, on one side the MEF’s aim is to spend less, but on

the other, focalisation tends to increase the number of beneficiaries, and the

corresponding increment of budget, which the MEF tries to control. Nevertheless,

with the MIDIS being the implementer, there is also the risk of over increasing the

number of beneficiaries. Therefore, according to the MEF functionary, “the

government still has to decide the right place for the SISFOH. It could go to the

22

National Institute of Statistics [INEI], for example” (interview, 14 July 2015).

However, for the time being, the SISFOH is under the MIDIS.

In the case of the PCM, transferring the CIAS’ Technical Secretariat and the Juntos

programme did not imply much, as it already has high political power and budget

for other categories. The PCM manages more than 20 public agencies and the

minister of the sector is the prime minister. Thus, social inclusion is one more issue

among many, so does not give the priority to social inclusion that a sector ministry

can give (PCM functionary, interview, 16 July 2015).

For the MIMDES, on the contrary, the decision of creating the MIDIS implied its

partial dismantling, removing most of its large programmes, and it left the ministry

very weakened:

• Its budget for 2012 was seven times less that in 2011, when still it had the

programmes (see charts 1 and 2 in the following section). This also “implied

having less bargaining power for budget allocation” (F. Bolaños, interview,

14 July 2015).

• “Less influence for promoting its policies” (F. Bolaños, interview, 14 July

2015). E.g. the MIMP does not count with directorates for working with

judges in order to solve social protection issues of the population (there are

also other instances outside the MIMP who also provide for this service).

• Less geographical presence: almost all the social ministries have presence at

the district or even community levels, but after the dissection of the MIMP, it

only has presence in the capital of the provinces or regions.

• Even the name of the ministry had to change, as social development was not

under its rectory anymore. Instead of Ministry of Women and Social

Development (MIMDES), it became Ministry of Women and Vulnerable

Population (MIMP)8.

Considering that four out of the five programmes that were transferred to the MIDIS

were part of the MIMDES (current MIMP), and that it had a vice-ministry of social

development, some political analyst and opposition party leaders (specially from the

APRA party) raised their opposition arguing that the creation of a new ministry was

8 Actually, this is the third time that the name of this ministry is changed: it was created in 1996 as the Ministerio de Promoción de la Mujer y del Desarrollo Humano (PROMUDEH), and in 2002 Toledo‘s recently elected government changed its name to Ministerio de la Mujer y Desarrollo Social (MIMDES).  

23

not necessary; it was just needed a reengineering of the MIMDES (El Universal, 3

November 2011). Actually, this was one of the options that were studied by the

group of advisors during the electoral campaign (Humala’s team member,

interview, 8 July 2015), but there were two main reasons (one political and the other

technical) for opting for the creation a new ministry:

• Politically, it responds to a practical issue: “it was needed an institution to

manage the social inclusion reform so that it becomes a priority in the national

agenda” (IDB functionary, interview, 1 July 2015). And more importantly, as

mentioned by a member of the advisory group to the candidate Humala, the

option for creating a new ministry was considered more convenient for three

main motives: “not to drag along bureaucratic inheritances, clientelist

practices and discussed policies [of the MIMDES]” (Humala’s team member,

interview, 8 July 2015).

• Technically, it was a matter of separating two different policies that were

previously under the MIMDES9: on the one hand, a policy oriented to poverty

alleviation and social development (focalised and temporal) and, on the other, a

policy of social protection for women and vulnerable groups such as family

violence, disability, elderly care, etc. (universal and permanent). It was a fusion,

in which social development was given more importance (for the social

programmes attached to it), and women themes were left behind. Therefore, it

was possible the separation of the two elements, and added the element of

‘vulnerable populations’, which were not in the scope of the MIDIS (PCM

functionary, interview, 16 July 2015).

The drafting of the MIDIS’ design started few months before its creation in October

2011. Nevertheless, the design of the new ministry was presented to the Cabinet

members only three days before the date of the meeting where it was going to be

approved, so that the resistance (mainly the MIMDES) would not have time to

organise itself and pose a serious threat (E. Ballón, interview, 16 July 2015). During

July and October 2011, “there was a bit of conflict between the MIMDES and

MIDIS, as it was being decided what was left to the MIMDES and what was taken

by the MIDIS” (Humala’s team member, interview, 8 July 2015). The then Vice-

9 Previous to the reform, the MIMDES had two vice-ministries: of Women and of Social Development. What remained was the one for women and it was added the vice-ministry of Vulnerable Population.

24

minister of the MIMDES for Social Development (under which the social

programmes were) said that “there was almost no dialogue between the high

officials of the MIDIS and MIMDES, even though I was appointed with the specific

task of reordering the social programmes of MIMP and facilitate their transfer to

the new ministry (E. Ballón, interview, 16 July 2015). Nowadays, the division of

rectory and some functions between MIMP and MIDIS still are not clear, although

there have been attempts of drafting a functions delimitation matrix between the

MIDIS and MIMP (MEF functionary, interview, 14 July 2015).

Budget allocated to the MIDIS

Social public expenditure in Peru has considerably increased, as we can see in chart

1, particularly in the sectors of health, education, housing and social inclusion,

which were also part of the social reform President Humala promoted for poverty

alleviation. Other sectors have had a smaller increase rate, such as culture, justice,

women and vulnerable population. In every sector, the resources are distributed

among the functions proper to the ministry, social programmes directly related to

the sector category, and in a smaller amount, to social protection programmes. In

the case of MIMP and MIDIS, almost the 100% of the budget is for social

protection (MEF functionary, interview, 14 July 2015).

Chart 1: Public Budget by Social Sector at the National Level* 2011-2015

(In millions of PNS)

Source: Own elaboration based on the Siaf (MEF database). * It does not include the budget for the regional and local governments.

0  

2,000  

4,000  

6,000  

8,000  

10,000  

12,000  

2011  

2012  

2013  

2014  

2015  

25

Regarding social protection, the budget has doubled since 2011, of which the

MIDIS manages the 74% for the year 2015 (chart 2). Other government actors that

share the social protection budget are: local and regional governments10, and at the

national level the PCM, MINJUS, MINSA, MIMP, CULTURA, MINEDU and

MEF. In 2012, the social protection budget allocated to the MIMP and PCM were

significantly reduced due to the transfer of programmes to the MIDIS.

Chart 2: Social Protection Budget 2011-2015

(In millions of PNS)

Source: Own elaboration based on the Siaf (MEF database). 4.3. Technocratic capacity According to the interviewees and recent studies (Vela et al., 2014; Trivelli, 2014),

and as mentioned earlier, the MIDIS is also empowered with high technocratic

capacity in order to:

• Give it legitimacy and allay fears of a political management. As put by a PCM

functionary: “Humala, in order to give the MIDIS institutional credibility, he

10 The difference between the budget allocation for social protection between local and regional governments can be explained by two factors: − The financial resources for regional governments are mainly financed by the CANON (royalties,

which are restricted to investments in infrastructure; exceptionally, they could be used for social protection).

− In 2007, in the line of decentralisation, the ministries of health, education and women transferred to the local governments many social programmes, and since then these have been managed locally.

0  

500  

1,000  

1,500  

2,000  

2,500  

3,000  

3,500  

4,000  

4,500  

Local  Gov.  

Regional  Gov.  

PCM   MINJUS   MINSA   MIMP   MIDIS   Others  (naHonal  level)  

2011  

2012  

2013  

2014  

2015  

26

took this decision: to put technicians and not politicians” (interview, 16 July

2015).

• Give it autonomy, both technical and political. Technical in the sense of

independence for designing and management of social inclusion policy in

relation with other sectors, particularly the MEF (Vela et al., 2014).

Traditionally, the coordination role is in the MEF. This ministry “practically

has a duplication of its capacity through its ‘sectoristas’ (functionaries with

high expertise and solid bureaucracy that are in charge of a specific sector),

who do the planning for other ministries” (IDB functionary, interview, 1 July

2015). The MIDIS breaks with this model of control, and assumes functions

that were before in the MEF. An also political autonomy, which is related to

legitimacy, in the sense of not interfering in the ministries’ decision-making

processes, which should be based on evidence and data analysis.

• Increase the effectiveness and efficiency of public social expenditure, mainly

by the creation of an evaluation system based on targets and indicators that

generates verifiable and transparent evidence. This allows the MIDIS, among

other things, to set priorities for its intervention (P. Bustamante, interview, 7

July 2015).

The technocratic capacity with which the MIDIS was empowered is manifested on

the professional profile of the first management team: high level of expertise and

technical training, experience in public management and meritocratic appointment

(Vela et al., 2014). All of them fulfil these three characteristics, except for Carolina

Trivelli (first minister), who did not count with experience in public management.

Also, many functionaries from the MEF went to form the first MIDIS team,

including the two vice-ministers, which facilitated the communication between the

two ministries.

Functionaries of lower levels were “young people, good professionals, with new

ideas, flexibility and openness to do many changes, without enrooted bureaucracy.

This was actually the objective of Humala’s government” (Consultant, interview, 13

July 2015). There was a “difference between the human resources of the MIDIS and

the traditional bureaucracy of the other ministries. In other ministries there are

established career paths; but in MIDIS no, there are not public careers on this […]

27

The MIDIS recruited people from NGOs who generally have more motivation and

are more committed” (IDB functionary, interview, 1 July 2015).

Also, according to the current minister, “the MIDIS has a different approach:

management by results, fostered by the MEF, programmes based on evidence […]

This is very important and is part of the leadership that the MIDIS assumes. Older

ministries are more bureaucratic” (P. Bustamante, interview, 7 July 2015).

4.4. Legal framework On the 20th of October 2011, the Peruvian Congress approved the creation of

MIDIS with the Act N° 29792, marking a turning point in Peru’s social policy. The

same act (Art. 21) also created the Sinadis, the MIDIS’ functional system. As

mentioned earlier, “the Sinadis institutionalises a formal space for articulated

intersectoral and intergovernmental management, in order to implement the

strategy ‘Incluir para Crecer’ [or ENDIS]” (MIDIS, 2013a).

However, the MIDIS’ legal framework currently has two legal deficiencies:

• Every functional system should have a regulation (reglamento), but the one of

Sinadis is not yet finalised nor approved by a supreme decree of the Counsel of

Ministers. This will clearly set, among other issues: the competences and limits

of the system for all actors; the mechanisms of creation, merger or elimination

of social programmes; its focalisation and timing, and the strengthening of the

SISFOH (MEF functionary, interview, 14 July 2015).

• The ENDIS has the status of ‘strategy’; therefore it is not binding for the

system actors. It is pending to be upgraded to the status of ‘state policy’, and

become binding for the system actors. For a strategy to become a state policy,

the supreme decree that created the strategy has to be countersigned by all the

members of the Counsel of Ministers. The ENDIS has been countersigned by

most of them, but not all. However, this is a tactic to give time to test the

ENDIS11 and also to adapt some of its aspects to the Sinadis’ regulation and

vice versa (MEF functionary, interview, 14 July 2015; Trivelli, 2014]. The

disadvantage of this decision is that the other governmental actors are not

11 E.g., there are discussions inside the MIDIS on whether to join the two first axis of the strategy (childhood nutrition and early childhood development).

28

legally bound to follow it and, currently, “this gives low strength to the

functional system” (PCM functionary, interview, 16 July 2015).

These deficiencies make that the MIDIS’ strategy is functioning as a political

commitment with the strong political support of president Humala, which

supplements the legal weakness mainly at the central level. At the regional and local

levels, the MIDIS has developed mechanisms of incentives for the regional and

local government, which are explained later in section 5.3.2. However, this is a

pending issue that the interviewees strongly recommended to be solved before the

end of the presidential period in 2016 (MEF functionary, 14 July 2015; PCM

functionary, 16 July 2015; Consultant, 13 July 2015). As one of the interviewees

expert in the topic put it: “formal institutionalisation is very important; it gives

strength and sustainability to public policies in Peru, as it sets clear scope of action

and responsibilities for different actors” (interview, 16 July 2015). Otherwise, on

the one hand, the actors of the system do not count with clear guidelines for

implementing the policy; and on the other, there are not mechanisms for

enforcement of the strategy and can remain just a theory.

4.5. Dealing with opposition and losers of the reform

The main source of ‘losers’ of the reform was the deactivation of the Pronaa

(replaced by Q’ali Warma), the programme with the largest budget till date. Besides

providing breakfast and lunches for school children, the Pronaa benefitted actors

from the welfare triangle:

- It was the ‘cash box’ of president Garcia’s government (America Noticias, 29

October 2013)

- It provided jobs for the APRA Party political operators (Consultant, interview,

15 July 2015)

- Certain business groups that supplied the Pronaa had high costs of products;

nevertheless, these always gained the bids and not precisely due to the quality

of their products (El Comercio, 15 November 2011).

Besides, the programme was technically deficient: lack of focalisation and high

filtration; lack of articulation, planning, and monitoring and evaluation (MIDIS,

2012b).

29

In this context, at the end of May 2012 Carolina Trivelli (then the MIDIS’ minister)

announced that the Pronaa would be deactivated at the end of the year and

announces the launch of QW. She also mentioned that the Pronaa would keep on

functioning normally until the end of the year 2012, but that its employees will not

be automatically incorporated to QW; they would have to go through the regular

recruitment process (El Comercio, 30 May 2015)

The reactions of the opposition were immediate. The APRA party accused Humala

of alleged clientelism, i.e. that QW will give employment to the party operators. The

Nationalist Party (NP) denied these accusations and said that the Pronaa had “design

and management deficiencies” (actually referring to its design defects, but specially

to its clientelist management) which justified its deactivation. (However, this

statement is not true. Even one of the interviewees who was very critical to the

MIDIS and Humala’s government in general, mentioned that Humala’s party does

not have political operators)

Trivelli was summoned to the Congress to give an explanation of the measure (El

Comercio, 7 June 2015). She went and gave the respective technical explanation

about the deficiencies in the Pronaa, and that Q’ali Warma’s design is different and

also the skills required.

There was also strong opposition was from the Pronaa’s workers union (680

workers). There organised demonstrations in many cities of the national territory

(Diario de Chimbote, 14 June 2012). Eventually the protests stop as the MIDIS

acted under the labour law. Currently, this union manages a Facebook page, which

is used to make negative propaganda about the social policy of Humala’s

government.

Business groups were also against the reform. According to one of the interviewees,

“the programmes of the MIDIS started with strong opposition of the business sector

because they were not interested that the farmers sell their products for Q’ali

Warma” (Y. Simón, interview, 1 July 2015). Annually the Pronaa spent about

US$150 million dollars on food for the children. When the Pronaa became part of

the MIDIS, the ministry started to ‘purge’ all the business that do not fulfil the

requirements. Thus, the MIDIS started (and continued) with a transparent

management of suppliers for social programmes, as put by one of the interviewees:

“the new ministry has not created links with power groups, what is seen in other

ministries” (CULTURA functionary, interview, 15 July 2015).

30

The technocratic approach followed by the MIDIS allows a more structured

decision-making process, avoiding clientelism. We can summarise this section with

the words of the current MIDIS’ minister: “the attacks and critiques are political,

but the answers are rather technical” (P. Bustamante, interview, 7 July 2015.

5. MIDIS’ perceived performance Since the creation of MIDIS, there were high expectations regarding its

performance from all fronts: Humala’s voters, government functionaries, foreign

governments and international organisations. The expectations were not only

because social inclusion was the main element of Humala’s campaign, but also

because his party –the Nationalist Party– was a relatively new one (created in 2005)

and had a low profile. For the 2011 he had to form a coalition, called Gana Peru,

with other small leftist parties. Therefore, there were doubts and uncertainty

regarding the functioning of the new government. On the other hand, the opposition

was (is) formed by well-organised traditional parties, which were ready to take

advantage of any mistake of the new administration. For the newly elected

government, this was translated, among other things, on high pressure for showing

quick and good results (Consultant, interview, 13 July 2015).

When we study the MIDIS performance we have to look at its two main functions:

policymaking and implementation, which include: policy design, M&E,

focalisation, inter-sectorial and inter-governmental coordination and articulation

capacity, and implementation of social programmes. In the previous chapter, two

main reasons were mentioned as the most important for empowering the ministry:

one political and other technical. It was explained that the implementation of social

programmes is technically less relevant for the MIDIS’ main mission (policy-

maker), but politically is very important for giving strength to the ministry and be

able to fulfil its rector role. In this regard, it is interesting to look at its performance

in time in order to see which of the elements (technical or political) had priority in

practice.

The MIDIS’ perceived performance during its four years of existence could be

summarised as:

31

− Technically well-designed policy: the ENDIS.

− Focalised and wide-reach intervention according population needs.

− High technocratic management.

− Trade-off between policy and implementation functions during the first two

years of operations (2012-2013).

− Incipient capacity for intersectoral and intergovernmental coordination.

− Good social programmes’ design (specially in comparison with previous

ones).

The following sections develop these points in detail.

5.1. Policy design and focalisation

According to all the interviewees, the ENDIS is well designed and has meant

advancement in social policy in Peru. Some of their comments referring the

strategy’s design were “very good”, “good”, “consistent”, “well designed” or “it is

a MIDIS’ success” (MINEDU’s functionary, 11 July 2015; Simón, Y., 1 July 2015;

Consultant, 13 July 2015; MEF’s functionary; Bolaños, F, 14 July 2015,

respectively). The following paragraphs summarise the central points of the

strategy.

The elements guiding the strategy are: (i) taking the household as its starting point

and unit of design and analysis (ii) results-based budgeting and management; and

(iii) territorial approach, i.e. promoting regional and local leadership through

complementarity with subnational initiatives (MIDIS, 2013a). Besides, the

strategy’s operating model acts over three complementary time horizons: for the

short term, it has programs to alleviate extreme poverty; for the medium term, it

promotes income-generating opportunities and investment in basic infrastructure;

and for the long term, it supports the creation of opportunities for the younger

generations, with an emphasis on reducing chronic childhood malnutrition and

promoting early childhood development (MIDIS, 2013a).

The strategy has five strategic axes, which follow the life cycle of the person (see

figure 2): childhood nutrition (0-3 years old); early childhood development (0-5

years old); childhood and adolescence holistic development (6-17 years old);

32

economic inclusion (18-64 years old), and protection for the elderly (65+ years old)

(MIDIS, 2013a). Figure 2: Strategic axes according to the life cycle

Source: Estrategia Nacional “Incluir para Crecer” (MIDIS, 2013a). Originally in Spanish, translation done by the author.

The strategy also sets the criteria that define the “Population in Process of

Inclusion” (or PEPI). The PEPI is the population that meets at least three of the four

criteria associated with social exclusion:

− Rural dwellers: households in communities with fewer than 400 dwellings or

2,000 inhabitants;

− Ethnicity: households where the mother tongue of either or both parents is an

indigenous language;

− Educational level: households in which the female head of household or wife

of the head of household did not complete primary school; and

− Poverty: households in the lowest quintile of income distribution.

Thus, the concept of exclusion refers not only to income poverty or extreme

poverty; it includes social and educational aspects as well. Also, the MIDIS’

approach to social service provision considers these services as a right of the

population; therefore it uses the word ‘users’ instead of ‘beneficiaries’.

33

According to the National Household Survey in 2010, the PEPI was approximately

4.7 million people, or 16% of the country’s population (MIDIS, 2013b). This

population tend to dwell in inadequate housing conditions and lack of public

services that do not allow them to meet their basic needs. The PEPI population is

located mainly in the Southern Sierra, followed by the Northern Selva and to a

lesser extent, in the Costa (MIDIS, 2013b).

Regarding the MIDIS’ performance on effective focalisation and actual coverage of

the PEPI through social programmes, the interviewees mentioned: “the coverage is

high, about 80-90% [of the PEPI]” (MIDIS functionary, interview, 15 July 2015);

“now the MIDIS is reaching to most needed and with a clear focalisation criteria,

before the criteria were not clear and instead were a tool for political clientelism”

(Consultant, interview, 15 July 2015).

In fact, the MIDIS focuses not just on the national average, but mainly on the

poorest and most remote areas, specially the rural Sierra and Selva. As Paola

Bustamante puts it: “after decades of complete neglect of the selva by the

government, we are reaching this area. It is expensive (double or triple than for

other regions), difficult, risky, but we are doing it. We are working with the

MINDEF in order to reach these areas. It was difficult to convince the MEF on

serving the Selva because of the high cost […] the matter is that this work is done in

remote areas and is not well known” (Interview, 7 July 2015).

5.2. Technocratic management

In previous sections, it was said that the MIDIS was empowered with technocratic

capacity in order to give the new ministry more legitimacy and autonomy, and

increase its efficiency and efficacy. According to the interviewees, this is shown in

the following aspects:

• Meritocratic bureaucracy and technical capacity: the MIDIS’ team have high

prestige among the other ministries regarding its technical capacity, as put by

some of the interviewees: “the MIDIS is leader in what refers to technical

capacity” (L. Olivera, interview, 2 July 2015); “the MIDIS people work well

with databases […] and the ministry works based on evidence. This has been

good and many people see it favourably” (CULTURA’s functionary, interview,

15 July 2015). This is also shown in lack of clientelism or party benefit through

34

political operators or ‘militantes’. As put by a PCM functionary: “the ministers

and vice ministers of the MIDIS are not of the Nationalist party […] Humala

could do it with all right, but he didn’t” (PCM functionary, interview, 16 July

2015)

At the same time, the lower levels of the MIDIS’ team lacked experience on

public management: “they are good professionals, but without experience on

public service” (E. Ballón, interview, 16 July 2015). This is one of the reasons

why, following the implementation problems of the programme Q’ali Warma

and the subsequent harsh political attacks (explained in section 5.4), the team

“was discourage” and “there was a lot of dispersion among the staff”

(Consultant, interview, 13 July 2015).

• Continuity of policies and low rotation of ministers: according to the Peruvian

standards, there has been low rotation of ministers in the MIDIS (PCM

functionary, interview, 16 July 2015). In fact, the MIDIS has changed ministers

only twice, which is very low in comparison with other ministries. Even more,

“Peru has very low institutionality, and in a new ministry even less… the risk in

this five years was that the new ministers could have change the way of doing

things. But in the case of MIDIS, the ministers have built on what had been

done, there have been continuity of policies” (Consultant, interview, 13 July

2015).

• Budgeting and management by results: the MIDIS is well known for working

by results, as put by a consultant: “with the MIDIS, the social services have

been professionalised; there is and effective and efficient use of resources”

(Interview, 15 July 2015).

• Management by processes: The MIDIS is pursuing the international

certification ISO 9001 for all its programmes. One of them, Pension 65, has

recently got it (Humala, speech to the Nation, 28 July 2015).  

However, these aspects do not mean that Humala (and his wife, Nadine Heredia)

does not use the MIDIS’ achievements politically. According to the journalist and

political analyst Jaime de Althaus, “specially since the last year [2014], the

president has gone to rural communities telling the farmers to defend the social

programmes because they are being attacked [by opposition parties]. And he uses

the words ‘programas nacionalistas’ [literal meaning: ‘programmes for the nation’,

35

but actually it is a play of words, as Humala’s party is called ‘partido

Nacionalista’]” (Interview, 15 July 2015). At the same time, political publicity is a

common and somehow legitimate behaviour of rulers.

Regarding autonomy for decision-making, a consultant to the MIDIS mentioned one

case –not necessarily the only one, but probably the most relevant– in which there

was political pressure for launching the programme Q’ali Warma (Interview, 15

July 2015). This will be discussed in more detail in section 5.4.

5.3. Inter-sectorial and inter-governmental coordination

In chapter 4 was mentioned that the MIDIS is mainly empowered with political,

financial, and technical aspects for fulfilling its policymaking role (that includes

coordination), which is the main element of its mission. Also, it is important to

remember that the SINADIS’ regulation is not yet ready; therefore there are not

clear and binding role descriptions for the government actors, which make the

coordination role even more challenging. At the same time, clear legal roles are not

a panacea for good coordination and effectiveness of policies. Other social

ministries count with them and find difficult to motivate regional and local

governments for following their directions, as put by F. Bolaños: “as [former] vice-

minister of education, I have experience that it is very difficult to motivate regional

governments” (F. Bolaños, interview, 14 July 2015).

Before entering into the specific sections, there is a common aspect between inter-

sectorial and inter-governmental coordination: both are considered to have taken

strength too late –in the third and fourth years of operations–, according to the low

or high capacity of the MIDIS team for the implementation of the MIDIS’ main role

(Consultant, interview, 13 July 2015; MEF functionary, interview, 14 July 2015).

As put by a close advisor to the MIDIS: “the MIDIS team did not show the need of

managing the relations with other ministers, government agencies, regional or local

governments during the first two years of operations” (Consultant, interview, 13

July 2015). Instead, in these years the ministry concentrated on the evaluation,

redesign and implementation of the programmes that were transferred to the MIDIS

(P. Balbuena, interview, 15 July 2015). Regarding inter-governmental coordination,

it was only in December 2014 when an inter-governmental commission was

installed (approved in June 2014) in order to facilitate coordination and articulation

36

with the regional and local governments; “this was too late” (E. Ballón, interview,

16 July 2015). Mechanisms for incentivise the achievement of results at the

subnational levels, such as the FED and SM (explained in section 5.3.2) also were

introduced at the end of 2014 and the beginning of 2015. These facts do not mean

that there were not coordination efforts since the beginning, but in practice it was

not seen as a priority for the MIDIS (Consultant, interview, 13 July 2015).

The delay on coordination and articulation efforts can be partly explained by the

difficulties that the new ministry had during its second year (2013), as one of the

main programmes –Q’ali Warma– had important problems (intoxication of children,

more details in section 5.4) and produced constant public scandals (Consultant,

interview, 15 July 2015). “This created a lot of dispersion inside the ministry and a

period of stagnation of the political aspect (related to dealings with other actors)”

(Consultant, interview, 13 July 2015). In July of the same year (2013) the first

minister, Carolina Trivelli, resigned to her position (“for exclusively personal

reasons”) and enters Monica Rubio. But the new minister only lasted six months. In

February 2014 she was replaced by the current minister, Paola Bustamante, “who

reconstructs the ministry” (Consultant, interview, 13 July 2015).

5.3.1. Inter-sectorial coordination at the national level

Coordination and articulation functions are complex and challenging, being the

MIDIS a ministry among eighteen more, and it does not have any hierarchical role

(nor a regulation for its functional system). Therefore, MIDIS “does not impose but

accords through agreements, pacts, alliances, uniting all stakeholders in the same

goal: social inclusion and improvement of quality of life” (P. Bustamante,

interview, 7 July 2015). According to the interviews, currently there is generally

good inter-sectorial coordination at the national level12 (P. Bustamante, interview, 7

July 2015; F. Bolaños, interview, 14 July 2015; PCM functionary, interview, 16

July 2015; E. Peñaherrera, interview, 23 July 2015). It largely depends on the

interest of other ministries to work with the MIDIS, and vice versa (Peñaherrera, E.,

interview, 23 July 2015). The MIDIS considers itself as a kind of “‘lobbyist’ of the

poor, guiding the growth of other ministries in the direction of the population in 12 As part of the decentralisation process, most of the ministries have regional offices that directly depend on the regional governments. Next section will deal with these instances.

37

need” (P. Bustamante, interview, 7 July 2015). On the other hand, there were two

interviewees13 who think the MIDIS has not effective leadership with other

ministries because, as put by one of them, “it does not have the political capacity to

do so” (E. Ballón, interview, 16 July 2015).

The following are among the main benefits the MIDIS brings to other ministries, as

expressed by the interviewees:

− Quality information regarding the population in need of social services (P.

Balbuena, interview, 15 July 2015).

− Wide presence and contact with all the local governments, especially in the

remote areas of the rural Selva and Sierra (P. Balbuena, interview, 15 July

2015; F. Bolaños, interview, 14 July 2015).

− Introduction of common platforms, based on budgeting and management by

results, for capacity development of the regional and local governments through

the FED and SM, respectively (more in section 5.3.2) (E. Peñaherrera,

interview, 23 July 2015; MIDIS’ functionary, interview, 15 July 2015).

− Flexible management (opposed to the ‘heavy’ bureaucracy of older ministries

such as health and education) for supporting other ministries’ programmes (E.

Peñaherrera, interview, 23 July 2015).

− Financing of projects (through the FONIE14) and/or project execution that

under the management of other ministries, but are directed to the PEPI (P.

Balbuena, interview, 15 July 2015).

− Fostering of joint-sector initiatives (P. Balbuena, interview, 15 July 2015).

MIDIS’ coordination with specific ministries and other governmental agencies at the national level15

MEF: The MIDIS’ team has prestige before the MEF due to its technocratic

capacity (management and budgeting by results, use of logical framework, etc.). As

put by some of the interviewees: “there is an easy understanding between the two

ministries” (MEF functionary, interview, 14 July 2015); “the first management 13 One from an opposition party who was not well aware of the MIDIS activities and the other had an overall critical opinion of the government’s performance. 14 Fund for building basic infrastructure on sanitation, electrification, and community roads. These projects are not executed by the MIDIS, but by the correspondent ministries and local governments. 15 The ministries and government agencies dealt with here are based on the content of the interviews, but there are more institutions with which the MIDIS is coordinating.

38

team of the MIDIS were leaders and opened the way; the following team has kept

the leadership with the MEF” (PCM functionary, interview, 16 July 2015); “the

best prove [of good coordination with the MEF] is that the MEF grants the budget

the MIDIS asks because the MEF trusts that the it is managed with efficiency and

efficacy” (P. Bustamante, interview, 7 July 2015). This does not usually happen

with other ministries, on the contrary, there is a tendency of high mistrust of the

capacity of other sectors (IDB functionary, interview, 1 July 2015). Also, there are

many initiatives that the MIDIS started and the MEF asks to join or escalate, such as

the SM and FED (P. Bustamante, interview, 7 July 2015).

MINSA, MINEDU and VIVIENDA: There is a good level of coordination with

these three ministries for joint-initiative interventions (not necessarily with the three

at the same time), such as the School Health Programme (Programa de Salud

Escolar), preventive health initiatives, reduction of malnutrition, etc. Also, the

MIDIS’ focalisation guidelines direct the efforts of these ministries in order to reach

and prioritise the population most in need. For example, in 2011 only 1 out of 3

rural households had water; at the present date, 2.6 out of three household has water,

and the aim for 2016 is to reach all households (P. Bustamante, interview, 7 July

2015). Besides, the largest social programmes that the MIDIS administers (Q’ali

Warma and Juntos) are mainly related to these ministries. Regarding Q’ali Warma,

a MINSA functionary said: “in the wake of our fostering healthy food habits, we

are in conversations so that they also fulfil our requirements of healthy food. At the

beginning there wasn’t a good coordination with the MINSA regarding nutritional

assistance (due to too quick political decisions), but it is done now” (E.

Peñaherrera, interview, 23 July 2015).

CULTURA: it is considered a small ministry (low budget, narrow territorial

presence), so it ‘holds’ on the MIDIS to work their policy because the MIDIS is in

direct contact with the population and knows their needs (P. Balbuena, interview, 15

July 2015). The MIDIS is the ministry with which CULTURA “deals more and

closer, and there is constant communication between the vice ministers”

(CULTURA functionary, interview, 15 July 2015). In 2014, the MIDIS and

CULTURA formed a commission inside the CIAS that promotes government

interventions in the Peruvian Selva, where are the highest levels of inequality.

39

Humala’s government has put a lot of emphasis in the Amazon area, due to its

vulnerability and exclusion. The access is very difficult (some areas can be reached

only by air or river), and implies high costs. CULTURA shared its database of

native communities with MIDIS and they were automatically declared as extreme

poor (P. Balbuena, interview, 15 July 2015). The MIDIS is reaching this population

with the different social programmes, with the help of the MINDEF.

RENIEC and INEI: The MIDIS has fostered, more than other ministry or

government agency, the identity of every Peruvian (F. Bolaños, interview, 14 July

2015). A personal national identity document was needed, not just for adults, but

also for children in order to have a reliable users’ database. Therefore, the RENIEC,

in collaboration with the MIDIS, made compulsory the national identity document

for children. This document was then linked to the provision of health and education

services, and the Juntos programme (conditional cash transfers). The MIDIS is also

in close collaboration with the INEI for data collection.

Thus, the strategic axes related to childhood (first and second) have priority in

practice; therefore the high level of coordination with MINSA, MINEDU and

VIVIENDA. Ministries related to the fourth axis (economic empowerment), such as

labour, production and agriculture (MINTRA, PRODUCE and MINAG), are not

mentioned here because, although I tried, I could not arrange interviews with

representatives of those ministries. Nevertheless, according to the interviewees, the

relations with these ministries are weak due to lack of interest (prioritisation) from

the part of the MIDIS (MEF functionary, interview, 14 July 2015; Consultant,

interview, 15 July 2015).

5.3.2. Inter-governmental coordination16

Although incipient, according to most of the interviewees17 who gave an opinion on

the topic, the MIDIS has achieved important legitimacy with the regional and local

16 As mentioned in the introduction, the interviews were done to people from the central government; therefore the views presented in this section regarding the role of MIDIS as inter-governmental coordinator are partial. 17 It is important to remember that the interviewees are from the central government; therefore their opinions may be limited to their particle experience.

40

governments. The main features of the MIDIS’ coordination with inter-

governmental are:

− Management by results: this is a key element and a priority of the MIDIS’

work that everything should have a measurable goal, being more accountable.

The programmes and all the activities of the funds are linked to results

(MIDIS functionary, interview, 15 July 2015).

− Fostering dialogue in order to find out what are the needs regarding the

poorest population and how problems can be solved (P. Bustamante,

interview, 7 July 2015; P. Balbuena, interview, 15 July 2015; E. Peñaherrera,

interview, 23 July 2015). The MIDIS is one of the ministries that is more

renown with regional and local governments due to the joint work.

− Continuity with programmes already being implemented by local and regional

governments (P. Bustamante, interview, 7 July 2015).

− Wide territorial reach: It is the only ministry in the executive power that has

reached in two years to all the regional (26) and local governments (1,838),

specially the most neglected areas by previous governments (P. Balbuena,

interview, 15 July 2015; F. Bolaños, interview, 14 July 2015).

− Working though monetary and non-monetary incentives, which also promote

their capacity development (planning, budgeting, management by results,

etc.) specifically in the areas related to social inclusion, but which can be

applicable to other interventions. This also improves their bargaining power

before the MEF (P. Bustamante, interview, 7 July 2015; E. Peñaherrera,

interview, 23 July 2015). These mechanisms aim to motivate the regional and

local actors to do their duty, as the responsible authorities for the development

of their own region or locality18.

Political challenges at the regional and local levels

Coordination at the regional level presents political challenges (MIDIS’ functionary,

interview, 15 July 2015; Consultant, interview, 13 July 2015). The MIDIS has a

centralised structure, but other ministries (MINSA, MINEDU) are decentralised,

and the regional offices (directorates) depend directly of the regional governments –

18 Decentralisation makes every regional/local authority responsible of the achievement of targets and indicators (MEF functionary, interview, 14 July 2015).

41

headed by the regional governor– which, at the same time, are in charge of the local

ministerial units (health centres, educational institutions, etc.). On the other hand,

the majority of the regional governments are from political parties different than

Humala’s. This presents a “political gap as there is no necessarily political will

(interest) for coordination, and these governments are not legally bound [yet] to

follow the ENDIS” (MIDIS’ functionary, interview, 15 July 2015). Also, the

regional governments are not so close to the people, and they get little political

credit for the implementation of programmes.

In order to fill this lack of interest from the regional governments, at the end of 2014

the MIDIS introduced the Fondo de Estimulo al Desempeño (FED). The FED is a

fund managed by the MIDIS that assigns social budget by results19. If the regional

government achieves the targeted results, the MIDIS gives the government more

funds for the same category. It implies that the regional governments should work

with a better planning and results-based management. According to a MEF

functionary, “so far, the FED is giving good results, but still it is too early to assess

its success” (Interview, 14 July 2015). Each region has its particularities, and it will

depend on the leadership capacity of every regional government (MIDIS’

functionary, interview, 15 July 2015).

In the local governments there is more support than in the regional governments to

the MIDIS’ programmes, because they are in direct contact with the population and

the mayor has more interest on gaining political benefits (MIDIS’ functionary,

interview, 15 July 2015). Local governments cooperate with infrastructure for some

of the MIDIS’ programmes (e.g. for Cuna Mas), guaranteeing the operation and

maintenance. Local governments also contribute with the beneficiaries’ databases

done following the criteria given by SISFOH. Here there is scope for clientelism in

two ways: the first is that some local governments use their power for asking the

population to vote for them; otherwise they will not be added to the beneficiaries’

list. However, it is a punctual problem, especially during political campaigns. The

second problem is that local governments can add beneficiaries who do not meet the

criteria (filtration). Nevertheless, “filtration is much lower than in previous

administrations” (P. Bustamante, interview, 7 July 2015).

19 Currently for results related to early childhood and childhood (first two axes of the ENDIS).

42

The MIDIS has created the “Sello Municipal Incluir para Crecer” (SM) that is a

non-monetary incentive (public recognition) for local governments to manage by

results, with verifiable results (MEF functionary, interview, 14 July 2015). As the

FED, it also fosters capacity development, but at the local level. Through the SM,

the MIDIS gives recognition of good practices and processes to the local

governments, other ministries (MINSA, VIVIENDA, etc.) give them technical

assistance for presenting well-planned projects and budgets to the MEF, and the

MEF approves the necessary funding (E. Peñaherrera, interview, 23 July 2015).

5.4. Implementation of social programmes

The implementation of social programmes was the main focus of the MIDIS during

the first two years of operations. Since the beginning of the presidential campaign in

2011, the programmes were very linked to Humala (let us remember that his initial

idea for improving social inclusion were programmes and not a ministry); for

instance, it was the first thing mentioned in his last 28 July presidential speech to

the nation.

The first task of the MIDIS regarding implementation was the evaluation, redesign

and reorganisation of the inherited programmes. Local consultants as well as

international organisations such as the BID and the GIZ (through the Good

Governance and State Reform Programme) participated on this process. Three of

the five programmes changed their names: Wawa Wasi became Cuna Mas, Pronaa

was deactivated and was replaced by Q’ali Warma, and the pilot project Gratitud

became Pension 65. Juntos and Foncodes retained their original names. Table 2

shows the situation of the five programmes before they were transferred to the

MIDIS (evaluation) and after they became part of the new ministry (redesign and

reorganisation). It is opportune to remember that the MIDIS entered with a strong

technocratic approach, which is reflected on the redesigning of programmes.

43

Table 2: Evaluation, redesign and reorganisation of social programmes transferred to MIDIS

Evaluation Redesign and

Reorganisation General

Absence of focalisation (high levels of filtration) No articulation with other programmes Every programme had its own organisational structure

Clear focalisation and prioritisation of population most in need (PEPI), unification of users’ database Articulation with other programmes Budgeting and management by results Standard organisational structure for all programmes

CUNA MAS

Based on Wawa Wasi, created in 1993 under the MINEDU; in 1998 is transferred to PROMUDEH (previous MIMDES) Cuna Mas was created in March 2012

Target: 0-4 years old from poor households Aim: improvement of early childhood development (cognitive, social, physical and emotional) In 2011, in practice Wawa Wasi was mainly centred on physical development

Target: children 0-3 years old from poor households Aim: Same Holistic development Two areas of intervention: childcare and family support

Q’ALI WARMA

Based on Pronaa, created in 1992 under the PCM; in 1996 is transferred to PROMUDEH. QW was created in 2012 and started activities in March 2013

Target: 0-12 year old children + pregnant women Aim: reduce malnutrition Pronaa was deactivated in 2012 due to design and management deficiencies: lack of focalisation and high filtration; lack of articulation, planning, and monitoring and evaluation

Target: Children 4-12 years old (pre-primary and primary) who study in public schools (poor and non-poor) Aim: improve the cognitive capacity for school children Food provision according to local culinary tradition; all days of academic year; high quality service

JUNTOS

Created in 2005 under the PCM.

Target: Households in extreme poverty Aim: break intergenerational poverty cycle through conditional cash transfers Conditional to health, education, nutrition

Target and aim: Same Conditional to: same + possible hygienic conditions at home Possible differentiated cash transfers to households with extra costs (mainly transport) Improvement of affiliation systems Access to service for remote areas

FONCODES

Created in 1991 under the PCM; in 2003 was transferred to MIMDES.

Target: Rural and urban areas, poor households Aim: Basic infrastructure, agricultural productivity, social and economic development Disarticulated activities, i.e. without programme guidelines or impact evaluation.

Target and aim: Same Framework for articulation of activities and impact evaluation

44

PENSION 65

Based on pilot programme Gratidud, created in 2010 under the MIMDES.

Target: +75 years old who do not count with pension (extreme poverty) Aim: Financial support Pension value: S/.100 per month

Target: +65 years old who do not count with pension (extreme poverty) Aim: Same Pension value: S/.125 per month Improvements in the affiliation system, monitoring & evaluation. Promotion of holistic attention (health, knowledge transfer to younger generations)

Source: Own elaboration based on MIDIS (2012b). Number of users, allocated budget and perceived performance

The following paragraphs collect the interviewees’ perceptions regarding the

performance of each of the five programmes, and the reasons behind them. By far

Q’ali Warma is the most controversial of them and therefore the subject

development is lengthier than for others. But before entering into the analysis,

charts 3 and 4 show the allocated budget and number of users per programme,

respectively. For first year of operations (2012), budget execution for all the

programmes was lower (86-90%) than in the following years (93-100%).

Chart 3: Budget allocation per social programme (2012-2015)* (In millions of PNS)

Source: Own elaboration based on data from the MIDIS (website) and Foncodes (website). * Amounts refer to the PIM for all the programmes, except for Foncodes, which refers to the PIA20. Usually the PIM is a bit larger than the PIA. 20 PIA (Approved Institutional Budget) is the initial approved budget of the public entity. PIM (Modified Institutional Budget) is the updated budget of the public entity as a result of the budget changes from the PIA made during the fiscal year.

0  

200  

400  

600  

800  

1,000  

1,200  

1,400  

Cuna  Mas     Q'ali  Warma   Juntos   Foncodes   Pension  65  

2012  

2013  

2014  

2015  

45

Chart 4: Number of users per social programme (2011-2015)*

Source: Own elaboration based on data from the MIDIS (website). * The number of Foncodes’ users is not available. * The figures for 2011 refer to the number of users when the programmes were not part of the MIDIS. * The figures for 2015 are until July (inclusive). Cuna Mas

Cuna Mas has generally good acceptance and does not had opposition MEF

functionary, interview, 14 July 2015. Also, it is one of the programmes with less

allocated budget and less number of beneficiaries (55,800 children and 52,600

families in 2015).

Q’ali Warma (QW):

QW started in 2013 and is considered the emblematic programme of MIDIS. Its aim

is to improve the cognitive capacity for school children; it is not a nutritional

programme per se. There were high expectations regarding this programme because

of the number of users (more than three million children21), but above all, because

“the idea was to work with perishable goods from local markets, thus promoting

family agriculture and local economy development” (Y. Simón, interview, 1 July

2015). At the beginning of the programme, the goods supply was done in this way,

but unfortunately local markets (from the poorest areas) are not yet prepared to

provide quality fresh goods or/and in time. It was also unfortunate that the MIDIS’

team realised too late of these market failures. Only a few weeks after it started,

21 QW has less number of users than the Pronaa due to both a better focalisation and a narrower age range of the target population (ref. chart 4).

0  

500,000  

1,000,000  

1,500,000  

2,000,000  

2,500,000  

3,000,000  

3,500,000  

Cuna  Mas  (children)  

Cuna  Mas  (families)  

Q'ali  Warma  

Juntos   Foncodes   Pension  65  

2011  

2012  

2013  

2014  

2015  

46

there were constant cases of food poisoning and intoxication of children in various

localities. These cases appeared in the media and opposition groups took advantage

for political attacks, especially the APRA party (as mentioned in section 4.5).

Although the current minister mentioned that “president Humala has not made any

political pressure on the MIDIS” (Interview, 7 July 2015), a consultant to the

MIDIS said that “there was strong political pressure to launch the programme

[QW] quickly” (Interview, 15 July 2015), partly because the previous Pronaa was in

the deactivation process and the supply to the schools was done sporadically.

Consequently, the programme was launched “too early, without trying it with a

pilot project” (Consultant, interview, 13 July 2015) and the unplanned problems

popped up at the national level at the same time. In chart 3 we can see that the

allocated budget in 2013 for QW is higher than in 2014. This is due to ‘emergency’

purchases of non-perishable goods for the programme.

The logistics problems related to food supply make that the service provision is not

even along the whole academic year. Thus, there are children who receive the

service during the whole year, and there are others who get it only for a few months.

This is the reason why the number of users in 2015 is less than in 2014, as shown in

chart 4.

Besides the market failures, there were other problems that the design team did not

take into account. The initial idea of providing the schools with fresh goods implied

that the schools should count with adequate infrastructure for storing, cooking, etc.,

and that the parents will be available for preparing the food for their children at

school (making turns, for example). In many schools, this was not the case, and

these problems also hindered the implementation of QW.

Currently, in order to guarantee the good quality of food, QW provides to the

schools with perishable food where the local market allows it. Where not, QW

provides non-perishable goods and the schools’ parents are in charge of cooking.

The schools’ installations have also been improved and most of the products are

bought locally. According to one of the interviewees, at the beginning, about 30%

of the food provided by QW was non-perishable and 70% perishable, but after the

problems cited above, it is vice versa (Consultant, interview, 15 July 2015). This is

one of the reasons that some of the interviewees gave for its disappointment with

QW’s performance, as there were higher expectations regarding QW’s articulation

with the development of family agriculture (Y. Simón, interview, 1 July 2015).

47

On another ground, the nutritional value of the food provided by QW has also been

questioned. When the programme started to get more non-perishable food, there

were not nutritious and low-cost food items (such as biscuits) available in the

market, so QW provided the schools with less nutritious food. Recently, in

agreement with the MIDIS, two large business organisations have launched non-

perishable nutritious food items for QW and the general public.

Juntos

Juntos is a conditional cash transfer programme –on health, education and

identity22– that was created in 2005, and since then had operated under the PCM.

Per se, the programme does not aim to reduce poverty or extreme poverty, but to

break the intergenerational poverty cycle in the long term (around ten to twenty

years).

In the ENDIS it is specified the path for a household to ‘graduate’ from this

programme –i.e. to be inserted in the economy in such a way that the family does

not need the cash transfer anymore– by capacity development, skills training, etc.

However, in practice it has a very limited reach: out of the more than 800,000 users

of Juntos, only the 3% participate in productive activities’ training by articulation

with Foncodes. Thus, the programme is considered to be highly assistentialist and

with very little articulation with other programmes (MEF functionary, interview, 14

July 2015; Y. Simón, interview, 1 July 2015, E. Ballón, interview, 16 July 2015; J.

de Althaus, interview, 15 July 2015). Besides, Juntos does not have (yet) an

evaluation system for its impact (MEF functionary, interview, 14 July 2015).

Foncodes

Foncodes is considered “an adopted programme that has not been able to adapt to

the MIDIS’ logic and has not received the same support as the other programmes”

(MEF functionary, interview, 14 July 2015). This is clearly seen in the allocated

budget in chart 3: meanwhile the budgets of all the other programmes continuously

increase, the Foncodes’ budget has decreased. Fujimori created the programme and,

in that time, “it was used to ‘burn’ money, i.e. for embezzlement of the programmes’

funds” (Consultant, interview, 15 July 2015). During the government of Alan 22 The children have to attend to school, go to the health centre, take micronutrients and have the national identity document.

48

Garcia (2006-2011), this programme has also been accused of inefficacy (for

spending only 9% of its annual budget, for example), clientelism (high

administrative costs), etc. (El Comercio, 1 August 2009).

With the MIDIS, Foncodes was reformulated, focusing more in the farmers and

capacity development. It currently has three main projects:

• Compras a MYPEru: It has the aim of ensuring independent income to families

linked to small and medium enterprises, by managing direct purchases,

accompanying the production process, increasing its technical production

capacity in a coordinated intervention with PRODUCE (there is no available

data on the number of users of this project).

• Haku Wiñay/Noa Jayatai (‘Let’s grow’): Their aim is to develop the production

and management capabilities of enterprises in rural households. A pilot project

was started in 2012 in articulation with Juntos, the same that has been escalated

in very few areas of the country. In 2014 it only reached 35,000 households.

• KFW Programme: financed by KFW Bank (Germany) and local governments

of two regions. Its aim is to improve the access to drinking water and sanitation,

and for the formation of capital through training.

Pension 65

Overall, there is wide approval of this programme. However, there are still pending

issues to be solved: it has not been thought how the money given to the elderly can

be linked to a commitment from them to use it well (for food, medicine, etc. and not

for alcohol, for instance); neither there is a way of evaluating its impact or if the

resources benefit directly the elderly and not other members of the family (MEF

functionary, interview, 14 July 2015). Also, there have been some cases of

corruption that were out of the MIDIS’ control (bank officers stealing money from

users at one of the local offices), but the MIDIS responded quickly and transferred

the money back to the users.

In brief, the perceived performance of social programmes’ implementation can be

summarised as follows:

• Their design is superior to previous programmes.

49

• Juntos is considered an assistentialist programme, as the ENDIS is not fully

implemented and there is not (yet) a mechanism for ‘graduation’ from Juntos.

It seems that, at the implementation level, the priority has been Early

Childhood Development (DIT) tackled by the two first axes of the strategy. In

fact, the FED and SM focus on these too. As put by E. Ballón: “even though

the MIDIS has tried to improve the design of the programmes (focalisation

and life cycle), in the implementation have not closed the cycle” (Interview,

16 July 2015).

• Too focused on results and targets. This refers mainly to the mentioned

problems related to QW, which implied lack of field study, planning and

logistic arrangements. There were also cases of filtration in Pension 65 due to

the pressure for increasing the number of users (users’ lists that had users who

do not fulfil the selection criteria were approved without proper checking)

(MIDIS’ functionary, interview, 15 July 2015).

• Monitoring and evaluation is still weak. Monitoring is done mainly from

deskwork (MEF functionary, interview, 14 July 2015). Partly this is due to

lack of decision, and [partly due] to high rotation of personnel ((MEF

functionary, interview, 14 July 2015; IDB functionary, interview, 1 July

2015).

• Social programmes are not used for clientelism. All the interviewees who

gave their opinion on this topic agreed that the MIDIS’ programmes are not

clientelist. Even more, “the MIDIS struggles about this with local

governments” (MIDIS’ functionary, interview, 15 July 2015). However, one

of the interviewees said he thinks “the MIDIS is not a tool for clientelism for

Humala; but not because he does not want, but because he cannot, he does

not have the capacity (political operators)[…]. In my opinion, it wasn’t

designed to generate political clientelism, nor to impede it” (E. Ballón,

interview, 16 July 2015).

50

6. Sustainability considerations

President Humala and the MIDIS’ team are trying to close all the gaps that are left

in the MIDIS so the reform is well rooted and becomes part of the national agenda,

independently of who is the president (MEF functionary, interview, 14 July 2015;

Consultant, interview, 13 July 2015). At the same time, Humala has political

interests for leaving the MIDIS (and other aspects of its social reforms) well

established, as put by one of the interviewees: “the main (and maybe only) asset of

the current government, in view of the coming 2016 elections, are the social

programmes […] for promoting the presidential candidate of his party and having

strength in the Congress to defend him of the accusations he will have” (J. de

Althaus, interview, 15 July 2015).

The MIDIS’ sustainability can be placed, not on the grounds of total elimination of

the ministry, as almost every one agrees that in Peru is needed an institution for

inter-sectorial and inter-governmental coordination (Inter-American Development

Bank, 2013), but on having enough empowerment and capacity for being the rector

of social inclusion policy (mainly policy design, coordination and articulation,

monitoring and evaluation). From the political and technical perspectives, it is very

unlikely that the MIDIS would be eliminated, as it would have to be done at the

level of the Congress and “the message to the population of eliminating a ministry

for social inclusion will be highly unpopular” (PCM functionary, interview, 16 July

2015). Nevertheless the MIDIS can be weakened. In this regard, the following

sustainability elements (or challenges) are worth considering:

• Continuity of social programmes

• Social programmes retention

• Settling of the legal framework

• Human resources retention

• Positive positioning in the public opinion

Continuity of social programmes

Individually, the social programmes managed by the MIDIS have created many

mechanisms that, we can say, will play on their sustainability: budgeting by results,

linked to other reforms of the State, they reach to population no one reached before,

51

international certification by processes (ISO 9001, currently only for Pension 65)

(Consultant, 13 July 2015). Also, the elimination of any of those programmes would

be unpopular (F. Bolaños, interview, 14 July 2015). The only programme that has

been weakly supported by the MIDIS is Foncodes.

Social programmes retention

Some of the interviewees with a technocratic background said that the relevance of

the MIDIS resides in its social inclusion role as policy-maker, and it does not

necessarily have to be the implementer of social programmes. As put by one of

them, “the role of the MIDIS in the long term is more of policy, procedures,

evaluate and validate programmes at all government levels, establish quality

standards of programmes not necessarily implemented by the MIDIS. This will

avoid the discussion of poverty alleviation in political grounds –trade off between

policy and implementation levels– that make the MIDIS focus more on

implementation and not so on policies” (MEF functionary, 14 July 2015).

Nonetheless, in chapter 4 it was explained that this gives the ministry the necessary

political strength for being the rector of social inclusion. Then, how dependable is

the MIDIS of being in charge of implementation of social programmes? The

MIMDES’ experience can answer this. Therefore, the MIDIS’ team should realise

of the importance of keeping a balance between both roles.

Settling of the legal framework

In section 4.4 it was mentioned that there are two elements to be settle: the Sinadis’

regulation and the upgrading of the ENDIS to state policy. Respondents mentioned

that it is important that both elements should be finalised before the end of the

administration of Humala in order to give the MIDIS more strength both political

and technical, which will be specially needed when the Humala’s presidential

support is not there anymore (Consultant, interview, 13 July 2015; MEF

functionary, interview, 14 July 2015). Currently, the legal bounding between MIDIS

and other actors is through agreements that are valid only in the present

administration. Instead, once the Sinadis’ regulation is approved, it will permanently

set the roles all actors in the social inclusion arena at the central, regional and local

levels (PCM functionary, interview, 16 July 2015). Therefore, “[once the regulation

is approved] even if the central government changes in the upcoming elections, the

52

ones from the regional and local governments will remain, and it would not be

politically positive for the new administration to ‘fight’ with the regional and local

governments. Even more, the new administration will seek to strengthen the

institutionalisation of MIDIS” (PCM functionary, interview, 16 July 2015).

Human resources retention

Another challenge of the MIDIS is its human resources. The characteristics of the

ministry require a good professional level of the staff and also permanence. At the

same time, good professionals may have an opportunity cost if, for example, they

can have higher salaries or the working conditions are better (not politicised, no

bureaucracy, etc.). A consultant to the MIDIS also mentioned that the technical

staffs of the ministry appreciate a technical minister, who also knows how to

manage the political aspect, like the current minister (Interview, 13 July 2015)

Positive positioning in the public opinion

The MIDIS’ minister mentioned that, currently, (positive) positioning in the public

opinion is a “huge challenge” (Interview, 7 July 2015). She also mentioned that the

media do not transmit the advances of the government in social matters for political

reasons (P. Bustamante, interview, 7 July 2015). Nevertheless, other respondents

said that, on the one hand, the MIDIS’ efforts for promoting a better communication

have been scarce (MINEDU functionary, interview, 11 July, 2015); and on the

other, that the media usually transmits negative news (like the QW’s scandals, for

example) and that “good news is no news” (J. de Althaus, interview, 15 July 2015).

The MIDIS’ team should inform better the population about its achievements, also

through the social media, as done by other ministries.

7. Conclusions

Humala’s political commitment was (and still is) crucial for building the

foundations for a deep social inclusion reform in Peru. His political commitment

and leadership were manifested in the creation of a ministry –the MIDIS– to be in

charge of social inclusion policy. The meaning of this is of high relevance.

53

First, it shows that Humala (and his advisory team) had deep understanding of the

implications of achieving social inclusion in Peru: it is a long-term process (one or

two decades), it requires the intervention of several inter-sectorial and inter-

governmental actors (therefore coordination and articulation among them), it needs

to be focalised (it is not a universal problem, but of a specific group of the

population), it requires an evidence-based knowledge of the characteristics of that

population (therefore the need of a users registry), it entails an assessment of the

existing government interventions and its improvement (if required), it implies the

design of a clear long-term strategy (with specific indicators, targets, and the means

for achieving them and mechanisms for monitoring and evaluation). Therefore the

need of an institution –in this case a ministry– for managing these elements.

Second, it shows Humala’s full understanding of the processes of political decision-

making. Hence, he endowed the MIDIS with all the necessary means – political and

technical empowerment– for fulfilling its policy-making role: establishing it as the

rector authority for social inclusion policy, high budgetary allocation, strong

technical capacity and a legal framework (not finalised, but it is a priority). The last

three elements are like three pillars that support the MIDIS’ policy-making role.

Third, it shows that Humala and his team took risks of uncertain future payoffs both

positive and negative. The performance of a new ministry can hardly be without

blemish, and given its direct link with Humala, any mistake or fault of the ministry

would affect Humala’s popularity and credibility (as was the case with Q’ali

Warma’s problems). Even more, these failures are an opportunity for the opposition

or losers of the reform for attacking the government.

Besides Humala’s commitment, good performance is also essential for the reform to

take deep roots and building of institutional capacity. Chapter five analysed the

MIDIS’ performance based on the perceptions of relevant and well-informed

stakeholders. Is the MIDIS’ performance good? This is not a straight answer; it

depends on the elements at consideration and their development in time, as shown

in chapter five. We also need to take into account that it is a new ministry working

in a complex environment: on-going decentralisation process, difficult geography,

costly access to the target population, diverse culture, market failures, etc.

Although in the first two years of the MIDIS there was a trade-off between policy-

making and service provision, this was a necessary risk to take, taking into account

the way politics work in Peru. The MIDIS needs the implementation of social

54

programmes in order to have enough political strength for coordination and

articulation of social inclusion policy with other government actors. However, in the

future, it has to focus more on its policy-making role, without neglecting the

implementation of social programmes. Politics affect policies and vice versa:

policies could not advance during 2013 because there was a lot of due to Q’ali

Warma, and the reputation as social ministry fell. Therefore, there should be a

balance between the policy-making and service provision roles.

Building institutional capacity is also a matter of time and it surpasses Humala’s

five-years presidential period. The MIDIS itself is one more link (a very important

one, though) of the reform ‘chain’ of previous years: Fujimori (1990-2001) created

many social programmes that were technically well-designed but assistentialist and

clientelist; Toledo (2001-2006) transferred substantial resources for social

programmes to the local governments, but the funds were ‘diluted’ due to corruption

and lack of capacity; Garcia (2006-2011) reduced the number of social programmes

from 82 to 25 (also clientelist management); and Humala creates the MIDIS, giving

consistency and organisation to social policy. Therefore, the success of the recent

social inclusion reform also depends of the upcoming government. In this regard,

there are two main risks for the MIDIS: on the one hand, that the new

administration politicise the MIDIS (by using it as a clientelist tool, for example);

on the other, that the new president does not give enough support to the MIDIS,

mainly political and financial, as he might have other priorities in his agenda.

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Appendix 1 Peruvian situation of poverty and social exclusion (priority indicators

baseline 2010 and goals for 2016) Source: MIDIS, 2012a

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Appendix 2 MIDIS’ organisational chart

Source: MIDIS, 2012a

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Appendix 3 Social programmes that are in the framework of the ENDIS

Source: MIDIS, 2012a