Punjab Devolved Social Services Program

The focus of the EA and PSU was on implementation of the policy matrix. Considerably less importance was given to the loan covenants. The PSU indicated that it would have recruited local support groups if it had been a condition in the policy matrix; however, since it was not a tranche condition, the PSU did not feel compelled to comply. This was also the case with covenants related to social sector expenditures and conditional grants, which were key covenants for ensuring improved social sector performance. Major covenants should have been included in the policy matrix for greater consistency and to increase the likelihood of compliance.