Public Expenditure on Human Development in Argentina

Therefore, to avoid duplications, fund transfers from the National government to the provinces and municipalities, and from the provinces to municipalities are deducted from the financin

This publication was prepared and produced by the World Bank Office for Argentina, Chile, Paraguay and Uruguay The series “Working Papers” does not constitute a formal document of the World Bank It is informally published and distributed to promote discussion and comments from the community that works on the topics presented The findings, interpretations, judgements and conclusions expressed in this paper are those of the author or authors and should not be attributed to the World Bank, its affiliate organizations, the members of the Executive Board or the governments they represent.

(*) Head of the Directorate of Consolidated Social Expenditure The statements made in this document are exclusively those of the authors and

do not necessarily reflect the opinions of the Ministry of Economy and Production

Damián Bonari*

Marcelo Becerra Ariel Fiszbein

World Bank Office for Argentina, Chile, Paraguay and Uruguay –Working Paper N.03/04

Table of Contents

INTRODUCTION 5

I ANALYSIS OF PUBLIC EXPENDITURE ON HUMAN DEVELOPMENT 2000-2001 6

II PUBLIC EXPENDITURE ON HUMAN DEVELOPMENT IN THE CONVERTIBILITY PERIOD 24

POST-THE POST-CONVERTIBILITY PERIOD GENERATED CHANGES IN GPDH COMPOSITION AND LEVEL.

ON THE ONE HAND, THE MAGNITUDE OF THE SOCIAL CRISIS REQUIRED EMERGENCY RESPONSES

ON THE PART OF THE STATE WHICH GENERATED INCREASES IN CERTAIN ITEMS ON THE OTHER, THE RISE IN THE LEVEL OF PRICES IMPLIED A FALL IN SALARIES AND RETIREMENT PAYMENTS IN REAL TERMS, WHICH, TO A GREAT EXTENT, REMAINED CONSTANT IN NOMINAL TERMS. 24

III CONCLUSIONS 35

ANNEX 38

BIBLIOGRAPHY 59

Box 2: Considerations on Mutual Funds Expenditure ……… 8 Box 3: Fiscal Relation between the National Government and the Provinces………… ……21 Box 4: Social Assistance in Times of Crisis……… ….27

This paper develops the sectoral, structural and financing composition of public expenditure on

human development The objective of this paper is to provide a first contribution to the multiples

aspects that are treated, laying analytical foundations for further developments

In particular, the report analyses the distribution by government level and expenditure composition during and after convertibility For that purpose, the period 2000-2001 is compared with years 2002-2003 The document provides information to identify and quantify social expenditure, simultaneously considering the sectors included and the agents involved The purpose of this document is eminently descriptive, and therefore, the analyses and conclusions to be inferred from

it will be the result of future research

The report is organized in the following way: the first part of the document focuses on public expenditure on human development in the 2000-2001 period and the responsibility of each government level for its execution and financing

The second part refers to public expenditure on human development during the 2002-2003 period The main changes in the sectoral and pragmatic composition of expenditure are described for the national government, and financing for social plans is analysed With respect to provincial governments, the paper studies a group of provinces which were selected on the basis of the data available.

I ANALYSIS OF PUBLIC EXPENDITURE ON HUMAN DEVELOPMENT 2000-2001II

I.1 Definition

This section will analyse the structure of public expenditure on human development (GPDH) in Argentina in the period 2000-2001, that is to say, in the last two years of the convertibility regime Although as from 2002 there are a series of important changes –which are reviewed in detail in the second part of the document–, many of the structural aspects identified are still valid The availability of detailed information on the provincial level is limited for years 2002 and 2003 However, the structural analysis performed for 2000-2001 is valid for the following years without major accuracy losses.iii

The frame of reference of analyses performed in Argentina has traditionally been Consolidated

Social Public Expenditure (GPSC), that is expenditure that is meant to provide health, education,

housing and fresh water services; to enforce compensatory nutrition, labor and social assistance policies aimed at mitigating situations of uncertainty in relation to income, health, employment and other contingencies.

GPSC comprises budget and extra-budget expenditure from the non-financial public sector of the

three government levels The usual consolidation process follows the criterion of recording expenditure in the jurisdiction that executes it and not in the one that finances it Therefore, to avoid duplications, fund transfers from the National government to the provinces and municipalities, and from the provinces to municipalities are deducted from the financing jurisdiction and are included

in the executing jurisdiction.iv

In this document, we will use a narrower definition, in an effort to reflect the activities that are typically related to human development more closely.v In particular, the analysis focuses on public expenditure that finances activities linked to social services traditionally aimed at individuals The

first difference with the definition of GPSC is that expenditure on housing and fresh water is

excluded From the point of view of public policy making, expenditure on these items is strongly linked to infrastructure services

The definition of GPDH used includes, in the first place, the provision of education services in the

different levels; but it excludes culture and science and technology, -as we understand that to a great extent, these areas do not involve the provision of basic services for the development of individuals–, and expenditure on education for the armed and security forces, as from the point of view of public policy making, these services belong to the defence and/or security areas and not to

the field of social policies, which are part of GPSC Thus, the Education sector comprises the items

that are directly linked to the provision of education services to the population –public sector teachers’ salaries and transfers to the private sector, the purchase of goods and services, expenditure

on infrastructure and equipment, and transfers to national universities– and the policy, coordination, regulation and system management actions that enable the provision of such services Likewise, expenditure on compensatory programs –for e.g scholarships– executed by the ministries of Education is included in the Social Assistance sector and not in Education, as it is considered to provide support to vulnerable groups and not a part of the cost of providing education services.

In the second place, GPDH encompasses the provision of public health services and expenditure on

public providers of health services –for e.g hospitals and health centers– and the drugs and inputs that the national government provides for the fight against AIDS and for maternal and child health care for the needy.

also includes the Federal Health Program (PROFE) – that is to say, expenditure allocated to medical assistance for non-Contributive pension beneficiaries (PNC)?? – and expenditure on health service providers’ infrastructure and equipment As in the case of education services, it includes policy,

Box 1 Consolidated Social Public Expenditure

GPSC for 2000 reached $59,341.62 million of 2001 –in other words, 21.23% of GDP In 2001, there

was a slight decrease of 0.25%; however, due to the fall in the level of economic activity, it increased

in terms of GDP Concerning consolidated total public expenditure (GPT), GPSC represented 62.82%

in 2000 and 61.62% in 2001 At National level, as a percentage of GPT, GPS is approximately of 62% and in the provinces, of 66% Instead, municipalities show a lower ratio, closer to 51% For

2000, disaggregation by government level reflected that $30,467.90 million of 2001 correspond to the national government, $24,858.63 million of 2001 to provincial governments and $4,015.08

million of 2001 to municipal governments In other terms, 51.34% of GPSC correspond to the

national government, 41.89% to the provinces and 6.77% to municipalities.

Consolidated Social Public Expenditure, 2000-2001

In millions of pesos of 2001 and in percentages

Source: analysis based on data from the Directorate of Consolidated Expenditure

According to the classification used by the Directorate of Consolidated Social Expenditure (DGSC),

GPSC can be broken down into the following functions: Education, Culture, and Science and

Technology; Health; Fresh Water and Sewerage; Housing and Urbanism; Social Development and Assistance; Social Security; Labor and Other Urban Services The most relevant functions in budgetary terms are Social Security, Health and Education, which concentrate more than 80% of GPSC.

Consolidated Social Public Expenditure by Function, 2000-2001

In millions of pesos of 2001 and in percentages

Source: analysis based on data from to Directorate of Consolidated Social Expenditure.

coordination and regulation actions to ensure that services will be adequately provided, for e.g prevention of AIDS and specific diseases and risks The main difference with the health expenditure included in GPSC is that expenditure executed by social security agents is excluded, and in this document, it is considered expenditure on Social Insurance.

The other two sectors of GPDH correspond to Social Assistance and Social Insurance The former comprises programs that grant monetary and non-monetary benefits, as well as the administrative expenditure of the social development and labour ministries, which are the main executors of these programs On the other hand, Social Insurance includes expenditure from money transfers – retirement payments, pensions, family benefits and unemployment insurance - and health insurance

for the beneficiaries of different social security regimes in force in the country, including PAMI and

provincial programs.vi It is worth noting that the traditional distinction between “contributive” and

“non-contributive” programs represents the difference between Social Assistance and Social Insurance only partially, as part of the Social Insurance expenditure is financed by the same general treasury resources as is Social Assistance expenditure The distinction is mainly institutional: social insurance benefits are derived from a legal right that is generally granted as a result of a labor relationship, whereas social assistance benefits are derived from a decision of the State based on wider eligibility criteria.

Main differences in the classification of GPSC and GPDH

education Include as expenditure in Social Assistance Housing and Potable Water

Table 1 summarizes the main figures of the GPDH classification adopted The sectoral composition reflects that over 60% of expenditure corresponds to Social Insurance and almost 25% to Education, while percentages for Health and Social Assistance are much lower This composition remained relatively stable during the 2000-2001 period, but, as it will be analysed later on, important changes are observed in the post-convertibility period.

Table 1 Public Expenditure on Human Development by Sector, 2000-2001

In millions of pesos of 2001, as a percentage of GDP and in percentage structure

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

In millions

of $ of 2001

As a %

of GDP

% Structure

Education 12,000.54

4.29

23.16

12,185.42

4.54

23.56

1.55

8.35

4,371.50

1.63

8.45

Social Assistance 3,187.20

1.14

6.15

3,252.54

1.21

6.29

Social Insurances 32,298.17

11.56

62.34

31,916.33

11.88

61.70

Total 51,811.55

18.54

100.00

51,725.79

19.25

100.00

Sector

Box 2 Considerations on Social Security Health Insurers Expenditure

Considering Social Security Health Insurers (including PAMI) as public expenditure on human

development deserves a methodological clarification since it is not executed by a state entity and it

is not included in the budget, as the rest of the social programs included in public expenditure This

category, which could be called “quasi” public expenditure, presents characteristics by which it

should be included as public expenditure In the case of social security health insurers, there are

three important aspects: (i) compulsory provision: all formal workers have the right to be provided

services by social security health insurers (health) and by law, both employers and employees are

obliged to contribute a percentage of their gross salaries Therefore, it is an insurance that is

regulated by the State, who delegates its execution to a private entity and lets employees choose

among the providers in this system; (ii) collection: the collection of personal and employers’

contributions is performed by an official collection agency, the AFIP; (iii) insurance is based on a

solidarity criterion: although each employee can choose among the health insurers of the system,

there is not a relation between the contributions made and the services provided, as the former are

distributed among contributors of different salary level and therefore, of different contribution

level, following a solidarity criterion – all of them receive the same service package Recording

this social insurance as public expenditure is also validated by international methodology, typically

the methodology of the International Monetary Fund

In the case of Argentina, there are two other types of insurance that would also belong to this

“quasi” public expenditure category: expenditure on retirement annuities and pensions from the

fully funded system (expenditure of AFJPs) and expenditure on the insurances of labor risk

insurance companies (expenditure of ART companies) These two insurances are not officially

recorded as social expenditure in Argentina yet, although they will be soon included in social

expenditure, as this is the standard established by internationally accepted methodology Until now,

the incidence on expenditure has been low, fundamentally because the private retirement regime

still has few beneficiaries.

However, and beyond conventions, it is considered that expenditure on health insurers has a

characteristic that further justifies its inclusion as public expenditure: the solidarity nature of health

insurance makes it different -in particular from private retirement, where benefits are directly

related to contributions In other words, risk pooling is an essential aspect of the program.

I.2 Responsibility of the Different Government Levels

Responsibility for executing and financing GPDH, once municipalities are excluded, is shared by

the National government and the provinces.vii

The national government is in charge of defining and coordinating health, education and social

assistance public policies, and of financing national universities It designs and finances health care and prevention, education, poverty reduction and social vulnerability programs.

process of transferring provincial retirement funds to the Integrated Retirement and Pension System (SIJP) was performed in 1994 and 1996; 11 of the 24 provinces have already completed the transfer The national government is also responsible for administering and regulating family benefits, unemployment insurance, PAMI and social security health insurers.

Provincial governments are responsible for financing and administering public health and

education services In 1992 it was decided that the decentralization process of non-university public education and health had to be completed by transferring most secondary education and health institutions to the provinces Concerning Social Insurance, as it is inferred from the previous paragraph, 13 provinces have kept their social security systems, and all of them have their own health insurance system for civil servants Additionally, provinces finance and execute their own social assistance programs

Next, GPDH is presented from the point of view of execution This implies that fund transfers to the provinces are discounted from the national government Therefore, expenditure on programs that the national government finances through transfers to provincial governments is included in provincial expenditure Conditional transfers from the national government to the provinces – those allocated to the execution of specific programs - are shown separately

In 2000/2001viii GPDH execution was distributed in similar magnitudes between the national

government and the provinces; on average, the national government executes 55.48% and provincial governments, the remaining 44.52% Of this percentage, on average the national government finances 5.23% by means of conditional transfers; the rest is financed with resources generated by the provinces –provincial and co-participation revenue, among others– and unconditional national transfers

Table 2 Public Expenditure on Human Development Executed by the Provinces, and Share in

Conditional Transfers, 2000-2001

In percentage

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Education The Argentine legal framework establishes that provincial governments are responsible

for financing, administering and supervising all levels of non-university education, and for implementing compensatory policies and infrastructure programs On the other hand, the national government is responsible for financing and defining basic education compensatory actions -aimed

at mitigating regional or social imbalances-, for financing and regulating the national university system, and for coordinating, supervising, assessing and providing technical assistance to ensure the quality of basic education.ix

During 2000/2001, the expenditure on Education executed by the provinces reached an average of 86.13% of the national-provincial consolidated expenditure, mainly due to teachers’ salaries, which represent 89.97% of provincial expenditure National government execution –which represents 13.86%– almost entirely corresponds to national universities (92.21%) Besides, the national government finances 8.05% of provincial expenditure through conditional transfers During 2000/2001, such transfers were mainly used to finance the National Teacher Incentive Fund (FONID), as opposed to what happened in the nineties, when they were allocated to infrastructure

programs and other compensatory actions, such as the Educational Social Plan (Plan Social

Educativo) and the Federal Education Pact (Pacto Federal Educativo)

Provincial

Execution

Conditional Transfers / Provincial Execution

Provincial Execution

Conditional Transfers / Provincial Execution

8.40

86.58

7.69

0.02

89.43

0.02

Social Assistance 65.20

5.10

63.70

7.07

Social Insurances 20.26

2.60

21.44

2.14

5.43

45.19

5.02

Sector

Table 3 Public Expenditure on Education, 2000-2001

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Table 4 National Government Conditional Transfers to Education, 2000-2001

In millions of pesos of 2001

Transfers to tertiary institutes are used to finance the salaries of provincialtertiary teachers

Out of the total transfers accrued by/ transferencias devengadas del?? FONID

in el 2001, only $330 million were paid The rest was paid during 2002

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

2000 National Provincial Total National Provincial Total Provision of Education Services 1,636.32 9,574.84 11,211.17 1,563.54 9,845.89 11,409.44

Teachers’ Salaries 14.43 9,229.29 9,243.72 10.97 9,516.60 9,527.57 Public Schools -

7,891.38 7,891.38 -

8,112.28 8,112.28 Transfers to Tertiary Institutes 14.43 -

14.43 10.97 -

10.97 Transfers to Private Sector -

1,337.91 1,337.91 -

1,404.32 1,404.32 Goods and Services / Maintenance -

146.95 146.95 -

172.69 172.69 Infrastructure and Equipment 54.96

198.61

253.56 28.74 156.60 185.34 Transfers to Universities 1,566.94 -

3.73 5.77 9.49

Curriculum Management and Training -

15.04 15.04 6.47 27.22 33.69 Strengthening of Provincial Educational Administration

(PREGASE, PRISE and

PRODYMES)

6.29 54.26 60.55 3.90 26.70 30.60 Decentralized Entities (INAP, CONEAU, etc.)

10.82

-

10.82

5.99 -

5.99

Other Programs 30.33 71.65 101.99 21.75 49.13 70.88 Total 1,717.63 10,282.91 12,000.54 1,635.10 10,550.32 12,185.42

2001 Item

Provision of Education Services 822.52 774.67

Teachers’ Salaries 803.49 714.34 Public Schools 649.04

660.00 Transfers to Tertiary Institutes 154.46 54.34 Transfers to Private Sector -

- Goods and Services / Maintenance -

- Infrastructure and Equipment 19.02 60.32 Transfers to Universities -

-

Policy, Coordination and Regulation Actions 24.20 31.63

Central Administration -

- Quality Information and Assessment 5.99

2.41

Curriculum Management and Training -

24.85 Strengthening of Provincial Educational Administration

PRODYMES)

18.22 4.37 Decentralized Entities (INAP, CONEAU, etc.) -

-

Other Programs 17.00 5.29

811.59

Health Provincial governments are responsible for financing, managing and supervising health

services provided by the public network of health providers –hospitals, health centers and other services such as ambulatory care– and implementing specific public health programs financed by the national government, among others The national government is in charge of epidemiologic prevention and control, coordinating and financing maternal-child care and supporting provinces with health emergency, mainly by providing HIV/AIDS drugs and basic medicines for primary care During 2000/2001, the composition by government level of the health sector was similar to that of Education: on average, provincial governments executed 88.84% of expenditures, of which only 2.12% were financed by the national government through conditional transfers Provincial health service providers concentrate more than 85% of the total expenditure of the provinces The rest is mainly distributed between provincial programs and policy, coordination and regulation actions Expenditure on the salaries of health services providers and of the central administration concentrates more than 90% of provincial expenditure At national level, 68.08% of the expenditure

on Health corresponds to health providers and goods and inputs contributed by the national government, 12.04% corresponds to public health programs and the rest to policy, coordination and regulation actions, which comprise expenditure on central administration.

Table 5 Public Expenditure on Health, 2000-2001x

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

It should be noted that during this period, national government conditional transfers to the health

sector were fewer than those for education services –even without considering FONID In principle,

this is an important point as it somehow predefines potential instruments by means of which the national government can orientate health policies at provincial level.

84.91

44.86

129.77 56.51 45.04 101.56 Goods and Inputs Contributed by National Gov 52.46 -

52.46 49.74 0.09 49.82 Fight against AIDS and

Sexually Transmitted Diseases 52.46 -

52.46 49.74 0.09 49.82 Infrastructure and Equipment -

69.15 69.15 -

65.97 65.97

Policy, Coordination and Regulation Actions 101.81 350.37 452.18 91.10 364.52 455.61

Central Administration (mainly salaries) 65.58

289.81

355.39 50.70 305.94 356.63 Training for Health and Assistance

Human Resources 23.51 47.39 70.90 20.60 46.12 66.72 Health Policy Planning, Control, Regulation

-

-

5.29 -

5.29 Health Sector Reform 7.90 9.04 16.93

8.07

7.66 15.74

Public Health Programs 50.37 143.63 193.99 66.47 91.17 157.64

Fight against AIDS and

Sexually Transmitted Diseases 3.24 0.57

3.81

3.41 0.76

4.16 Prevention and Control of Special Diseases

And Risks (including immunizations, VIGI-A,

etc.)

27.18 12.14 39.32

38.81

13.12 51.93 Maternal & Child

Care

10.35 47.79

58.14

10.46

23.62

34.08 Coverage for Sanitary Emergencies 1.22

9.86

11.09 1.26

12.80

14.06 Other Programs

Table 6 National Government Conditional Transfers to Health, 2000-2001

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Social Assistance Although the provinces have a preponderant role in the execution of expenditure

on Social Assistance, the share of the national level is significantly larger than in the case of Health and Education From a conceptual point of view this is not surprising, as the expectation is that the greatest redistributive effort is to be made by the national government This item includes monetary and non-monetary transfer programs (transfers in kind) In the case of monetary transfers, the national government share (54.77%) is slightly higher than the share of the provinces (45.23%), while the latter are the main executors of expenditure on programs that provide benefits in kind (90.29%), among which food programs stand out The balance between monetary and non-monetary transfers seems to be slightly slanted in favor of the former, mainly on account of the relative share

of PNC During this period, there were a series of programs with monetary transfers, also at provincial level.

Provision of Health Care 44.86 45.13

Providers (hospitals and health care centers)

44.86

45.04 Salaries, Inputs and

Maintenance

-

- Assistance to PNC Beneficiaries

44.86

45.04 Goods and Inputs Contributed by National Gov -

0.08 Fight against AIDS and

Sexually Transmitted Diseases -

0.08 Infrastructure and Equipment -

-

Policy, Coordination and Regulation Actions -

- Health Policy Planning, Control, Regulation

And Enforcement/Fiscalización?? -

- Support for Public Health Studies and Research -

- Health Sector Reform -

-

Public Health Programs 49.89 22.73

Fight against AIDS and Sexually Transmitted Diseases -

- Prevention and Control of Special Diseases

And Risks (Including Immunizations, VIGI-A, etc.)

6.08

3.65 Maternal & Child Care

43.81

19.00 Coverage for Sanitary Emergencies -

-

0.08

Total 94.75 69.17

Table 7 Public Expenditure on Social Assistance, 2000-2001xi

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

National Provincial Total National Provincial Total Social Programs /

Personal Monetary Transfers 905.59 799.61 1,705.20 998.36 771.00 1,769.36

Employment Programs 187.67 226.66 414.33 177.53 335.45 512.98

Jefes/as de Hogar -

-

-

-

-

-

Trabajar

88.21

-

88.21

41.98

-

41.98 Labor Emergencia Plan (PEL) 99.45 -

99.45 135.55 -

135.55 Financial Assistance for Social Expenditure -

-

-

-

-

- Provincial Programs -

226.66 226.66 -

335.45 335.45 Scholarships 55.87 162.36 218.23 45.16 27.93 73.09 National Education Scholarships 55.87 -

55.87 45.16 -

45.16 Polimodal Scholarships, Buenos Aires Province -

162.36 162.36 -

27.93 27.93 Non-Contributive Pensions

661.78

137.35 799.12 755.75

140.64

896.39 Other Programs

-

-

-

-

-

Solidaridad

0.28

-

0.28

19.92 -

19.92 Provincial Programs -

-

-

-

-

- Provincial Food Programs -

-

6.90 -

6.90 Others 82.72 431.61 514.33 84.99

463.88

548.87

Central Administration 75.95 157.26 233.21 67.13 165.59 232.72

Ministry of Social Development

60.68

101.52 162.20 51.79 108.11 159.90 Ministry of Labor 15.27 55.74 71.01 15.34 57.48 72.82

Total 1,109.22 2,077.98 3,187.20 1,180.57 2,071.97 3,252.54

Table 8 National Government Conditional Transfers to Social Assistance, 2000-2001

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Social Insurance The main items included in this sector are retirement and pension payments,

which represent 63.19% of the total, and the expenditure executed by diverse health insurances, which concentrate 27.09% As opposed to the other sectors, for Social Insurance the national government executed nearly 80% of the 2000/2001expenditure; this is mainly due to the weight of national retirement and pension payments, which represent 49.52% of the total expenditure on this sector Besides, it finances 2.37% of provincial expenditures through conditional transfers, mostly allocated to provincial social security fundsxii.

Social Programs / Personal Monetary Transfers 0.71 87.17

Employment Programs 0.71 87.17

Jefes/as de Hogar -

-

Trabajar 0.71 1.37 Labor Emergency Plan (PEL) -

- Financial Assistance for Social Expenditure -

85.80 Provincial Programs -

-

- National Education Scholarships -

- Polimodal Scholarships, Buenos Aires Province -

- Non-Contributive Pensions -

-

- Human Development Income

(IDH)

-

-

Solidaridad -

- Provincial Programs -

-

Non-Monetary Social Programs 105.17 58.50

Food Programs 1.55 4.19 School Kitchens -

-

Unidos/ Food Emergency Program

Community Kitchens (FOPAR) -

- Provincial Food Programs -

-

Prohuerta -

-

0.80

Total 105.88 146.48

Table 9 Public Expenditure on Social Insurance, 2000-2001

In millions of pesos of 2001

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Table 10 National Government Conditional Transfers to Social Insurance, 2000-2001

I.3 Financing of Public Expenditure on Human Development

Public Expenditure on Human Development (GPDH) is financed by three funding sources: the

national treasury, provincial treasuries and payments and contributions from employers and individuals.xiii Fiscal expenditure is public expenditure financed with resources from the national

and provincial treasuries This concept provides a more accurate measurement of the resources that

the State allocates to social policy.xiv

National Provincial Total National Provincial Total

Administration of ANSeS, SSS, etc 288.12

87.02

375.14

249.11

89.09

338.20 Retirement and Pensions 16,107.83 4,259.60 20,367.43 15,690.20 4,520.36 20,210.56 National (including ex-provincial

funds)

16,107.83

16,107.83 15,690.20 -

15,690.20

4,259.60 4,259.60 -

4,520.36 4,520.36

-623.18

609.00

-609.00

1,834.04 1,807.95 -

1,807.95

-297.15

353.70

-353.70

2,521.20 2,389.23 -

2,389.23 Social Security Health Insurers 4,082.28 2,197.74 6,280.02 3,973.84 2,233.85 6,207.69

4,082.28 3,973.84 -

3,973.84

2,197.74 2,197.74 -

2,233.85 2,233.85

-Retirement and Pensions 165.26

142.27 National (including ex-provincial

funds)

142.27

-Social Security Health Insurers 5.02

4.09

4.09

146.35

During 2000/2001, fiscal expenditure represented 59.55% of GPDH on average –26.84% from the national treasury and 32.71% from provincial treasuries The rest corresponds to expenditure financed with payments and contributions The breakdown by government level shows that for the national government fiscal expenditure represents 48.40% on average, while in the provinces it reaches 73.47% The analysis by sector reflects that Social Insurance is the only sector where payments and contributions finance part of the expenditure –their share reaches 65.21%– as Education, Health and Social Assistance are totally financed by the treasuries However, Social Insurance financing by means of payments and contributions reaches 91.6% in the provinces, and 58.31% in the national government This situation responds to various factors: in the provinces, expenditure on Social Insurance is only allocated to retirement and pension payments and social security health insurers; while in the national government, it also includes family benefits, unemployment insurance, health insurance for retirees and pensioners (PAMI) and subsidiesxv National social security health insurers are regulated by the national government, but they are totally financed with payments and contributions; instead, 58.94% of resources allocated to retirement and pension payments come from the national treasury.xvi In summary, the financing structure of Social Insurance is complex: the weight of the national fiscal expenditure reaches 32.98% of the total, and covers 46.12% of retirement and pension payments, 75.12% of administration costs, 100% of subsidies, 7.62% of unemployment insurance and 17.30% of PAMI.

Table 11 Composition of Public Expenditure on Human Development Financing, 2000-2001

In millions of pesos of 2001

The fiscal expenditure of PAMI includes resources that are self-generated by the institution, although they represent

a minor percentage

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Concerning the entities that manage GPDH, we observe that 61.70% corresponds to social

insurance administration agencies At national level, the Social Security National Administration Agency (ANSES) administers retirement and pension payments, family benefits, unemployment insurance and subsidies On the other hand, the Health Insurance Superintendence (SSS) supervises the transfers of payments and contributions to social security health insurers through the revenue collection agency, the Public Revenue Federal Administration Agency (AFIP) Concerning provinces, in those which have not transferred their social security funds yet there is an administration agency for health insurance and the retirement and pension system.

National Provincial Total Fiscal

Expend.

Payments

& Contrib. Total

Fiscal

Expend.

Payments

& Contrib. Total

Fiscal

1,717.63 10,282.91 -

10,282.91 12,000.54

12,000.54 Health 508.25

-508.25

3,817.39 -

3,817.39 4,325.64 -

4,325.64 Social Assistance 1,109.22 -

1,109.22 2,077.98 -

2,077.98 3,187.20 -

3,187.20 Social Insurance 10,273.52 15,480.29 25,753.81 558.40

5,985.97 6,544.36 10,831.92 21,466.26 32,298.17 Administration 288.12

-288.12

87.02

-87.02

375.14

-375.14 Retirement and Pensions 8,931.86 7,175.97 16,107.83 466.36

3,793.25 4,259.60 9,398.22 10,969.21 20,367.43 Subsidies 623.18

-623.18

-623.18

-623.18 Family Benefits -

1,834.04 1,834.04 -

-1,834.04 1,834.04 Unemployment Insurance -

297.15

297.15

-297.15

297.15 PAMI 430.35

2,090.85 2,521.20 -

-430.35

2,090.85 2,521.20 Health Insurers -

4,082.28 4,082.28 5.02

2,192.72 2,197.74 5.02

6,275.00 6,280.02

Total 13,608.63 15,480.29 29,088.92 16,736.67 5,985.97 22,722.64 30,345.30 21,466.26 51,811.55 2001

Education 1,635.10

1,635.10 10,550.32 -

10,550.32 12,185.42

12,185.42 Health 462.05

-462.05

3,909.44 -

3,909.44 4,371.50 -

4,371.50 Social Assistance 1,180.57 -

1,180.57 2,071.97 -

2,071.97 3,252.54 -

3,252.54 Social Insurance 10,902.04 14,171.00 25,073.04 599.26

6,244.04 6,843.30 11,501.29 20,415.04 31,916.33 Administration 249.11

-249.11

89.09

-89.09

338.20

-338.20 Retirement and Pensions 9,575.38 6,114.82 15,690.20 506.08

4,014.28 4,520.36 10,081.46 10,129.10 20,210.56 Subsidies 609.00

-609.00

-609.00

-609.00 Family Benefits -

1,807.95 1,807.95 -

-1,807.95 1,807.95 Unemployment Insurance 49.60

304.10

353.70

-49.60

304.10

353.70 PAMI 418.94

1,970.29 2,389.23 -

-418.94

1,970.29 2,389.23 Health Insurers -

3,973.84 3,973.84 4.09

2,229.76 2,233.85 4.09

6,203.6 0

6,207.69

Total 14,179.77 14,171.00 28,350.77 17,130.99 6,244.0

4 23,375.03 31,310.75 20,415.04 51,725.79 Sector

Table 12 Public Expenditure on Human Development Financing Composition by Administration Agency, 2001

In millions of pesos of 2001

Conditional transfers from the national government to the provinces are recorded in the “national treasury” column

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Administration Agency National

Treasury

Provincial Treasuries

Payments and Contributions (Workers and Employers)

Total National Government – Central Administration 3,277.73

3,277.73

Provincial Governments – Central Administration 1,027.23

15,504.49

16,531.73

Social Insurance Agencies 11,048.39

452.90

20,415.04

31,916.33

Nacional Social Insurance Agency

(ANSeS)

10,483.10

8,226.87

18,709.96

Administration 249.11

249.11

Retirement and Pensions 9,575.38

6,114.82

15,690.20

Family Benefits

1,807.95

1,807.95

Unemployment Insurance 49.60

304.10

353.70

Subsidies 609.00

609.00

Provincial Retirement and Pension Agencies (Funds) 142.27

452.90

4,014.28

4,609.45

Administration 89.09

89.09

Retirement and Pensions 142.27

363.81

4,014.28

4,520.36

Health Insurance Agents (Social Security Health

Insurers)

423.03

8,173.89

8,596.92

Social Security Health Insurers (National

System)

3,973.84

3,973.84

Provincial Health Insurers 4.09

2,229.76

2,233.85

PAMI 418.94

1,970.29

2,389.23

Total 15,353.35

15,957.40

20,415.04

51,725.79

II PUBLIC EXPENDITURE ON HUMAN DEVELOPMENT IN THE POST-CONVERTIBILITYPERIOD

The post-convertibility period generated changes in GPDH composition and level On the one hand, the magnitude of the social crisis required emergency responses on the part of the State which generated increases in certain items On the other, the rise in the level of prices implied a fall

in salaries and retirement payments in real terms, which, to a great extent, remained constant

in nominal terms.

II.1 Changes at National Levelxvii

At national level, the post-convertibility period can be characterized by two major changes: (i) a significant increase of resources allocated to Social Assistance (35.06% in real terms), particularly

to Social Assistance executed by the national government or “net expenditures” (97% in real terms) and to some health programs, in the framework of the social emergency program in both cases; and

Box 3 Fiscal Relations between the National Government and the Provinces

During the last decades, fiscal relations between the National Government and the provinces were characterized by continuing modifications to primary and secondary allocation and distribution rules in the context of successive fiscal pacts This has generated an extremely complex system formed by different types of transfers and fund sources In this scheme, provincial resources of national origin have come from two types of sources: the Federal Co-participation Tax Regime and a set of specific laws that consist in the total or partial commitment of the revenue generated by certain taxes, which is allocated to specific purposes Among these laws, we can mention the Buenos Aires Urban

Conglomerate Fund (Fondo del Conurbano Bonaerense) and Basic Social Infrastructure Works, funded by the income tax and aimed at infrastructure works of social purpose; FONAVI, which is aimed at housing; and FEDEI, which is aimed at electric power generation, road and infrastructure

works, among others

The Federal Pact (Compromiso Federal) of 1999 –Law N° 25,235– established that the provinces

“cannot allocate funds assigned to specific purposes by special laws, up to 50% of their value.” Later,

in 2000, the Growth and Fiscal Order Pact (Compromiso para el Crecimiento y la Disciplina Fiscal) –

Law N° 25,400– ratified this provision Likewise, the Agreement of the National Government and the

Provinces on Financial Relation and Basis for a Federal Co-Participation Tax Regime (Acuerdo

Nación-Provincias sobre Relación Financiera y Bases de un Régimen de Coparticipación Federal de Impuestos) of February 2002 raised the free availability of these resources to 100% (Law N° 25,570).

In this work, the special co participation regimes of the 2002-2003 period are included in total national government expenditures under the function that corresponds to the item for which they were originally allocated, in line with the national budget presentation However, it should be taken into account that transfers to these items are not necessarily allocated to the functions where they are aimed to.

In the GPDH, there is a portion of total expenditures that appears under Social Assistance and is to be

executed in that sector On the contrary, amounts for Basic Social Infrastructure and the Buenos Aires

Urban Conglomerate Fund (Fondo del Conurbano Bonaerense) are freely available and therefore are

(ii) the freeze on all remaining expenditures in nominal terms, mainly retirement and pension payments, and salaries As a consequence, an important change in GPDH composition took place in the context of a strong downfall both in real terms and in relation to GDP In particular, national government expenditure fell 29.16% in real terms and 7.58% in terms of GDP –from 11.39% in

2001 to 10.53% in 2002

The analysis by sectors indicates that in 2002 the share of national expenditure on Social Assistance increased from 7.91% to 15.08% of total GPDH Likewise, the relative weight of Health went from 1.74% to 2.12% Conversely, Social Insurance fell from 82.36% to 77.61% and Education decreased from 7.99% to 5.20% In 2003, total national GPDH kept similar levels to 2002 in terms

of GDP (10.5%) However, concerning GPDH composition, the relative weight of expenditure on Social Assistance continued increasing to reach 18.04%, Health increased its share to almost 3% and Education to 6%, while expenditure on Social Insurance lost share and fell to 73.01%, thus compensating the rise in the other sectors.

The relative importance of each sector was thus modified, although Social Insurance remained preponderant, sharing three quarters of GPDH In the case of net expenditures (national expenditure net of transfers to the provinces), the decrease was slightly lower- 27.75% in real terms This reflects a fall in transfers to the provinces, which decreased 46.79%, due to a stronger intervention

of the national government through more participation in social policy execution on account of the socio-economic emergency In 2003, according to the initial credit, net expenditures decreased

Box 3 (Cont.) Public Expenditure on Social Assistance, 2002-2003

In millions of pesos de 2001

(*) Provisional accrual, (**) Initial credit(1) a) 4% of income tax revenue is distributed among all provincialjurisdictions, excluding Buenos Aires province, according to the BasicUnfulfilled Needs index, and b) 10% of revenues up to an amount of $650millions per year is allocated to Buenos Aires province If this 10% exceedsthis amount, the surplus is distributed among the rest of the provinces

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Table 13 National Government Public Expenditure on Human Development, 2001-2003

(a) Total and net expenditures in millions of pesos of 2001

c) Percentage structure

(*) Provisional accrual, (**) Initial credit

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Education In 2002, national government expenditure on Education fell 53.92% in real terms and

39.89% in terms of GDP, as total expenditures dropped from 0.91% to 0.55% of GDP, mainly due to

the fact that FONID transfers to the provinces were not included in the budget Instead, in 2003 an amount of $184.53 million of 2001 was included for FONID.xviii Both the inclusion of FONID in the

budget and the increase of expenditure on national universities in nominal terms explain the total real increment of 17.60% of the Education sector in 2003.

Total Expend.

Net Expend.

Total Expend.

Net Expend.

Total Expend.

Net Expend.

Education 2,446.69

1,635.10

1.127.31

1,070.99

1,325.71

1,086.96

462.05

459.05

404.95

629.73

565.51

Social Assistance 2,421.59

1,180.57

3,270.54

2,331.27

3,938.98

2,872.33

Social Insurance 25,215.30

25,073.04

16,828.87

16,673.81

15,945.81

15,693.95

Total 30,614.80

28,350.77

21,685.77

20,481.03

21,840.23

20,218.76

Sector

Total Expend.

Net Expend.

Total Expend.

Net Expend.

Total Expend.

Net Expend.

0.61

0.55

0.52

0.65

0.53

0.17

0.22

0.20

0.31

0.28

Social Assistance 0.90

0.44

1.59

1.13

1.92

1.40

Social Insurance 9.38

9.33

8.17

8.10

7.77

7.65

Total 11.39

10.55

10.53

9.95

10.65

9.86

Sector

Total Expend.

Net Expend.

Total Expend.

Net Expend

Total Expend.

Net Expend

5.77

5.20

5.23

6.07

5.38

1.63

2.12

1.98

2.88

2.80

Social Assistance 7.91

4.16

15.08

11.38

18.04

14.21

Social Insurance 82.36

88.44

77.60

81.41

73.01

77.62

Total 100.00

100.00

100.00

100.00

100.00

100.00

Sector

Table 14 National Government Public Expenditure on Education, 2001-2003

In millions of pesos of 2001

(*) Provisional accrual, (**) Initial credit

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Health In 2002, national government expenditure on Health decreased 13.59% in real terms with

respect to 2001; nevertheless, it slightly increased in terms of GDP, going from 0.20% to 0.22% Those figures reveal several modifications in sectoral composition On the one hand, there was a significant increase in real expenditure on public health programs in the context of the health emergency –Maternal and Child Care, and mainly Prevention and Control of Specific Diseases and Risks- The increase in expenditure on these programs is due to larger coverage as well as to the increase in the prices of certain drugs and inputs –vaccines, among others– which rose beyond inflation Conversely, expenditure on coordination and regulation actions and on health care for PNC beneficiaries decreased.

In 2003 expenditure allocated to Health increased 37.18% in real terms The most significant

increases are recorded in Health Emergency programs (Remediar)xix and the Fight Against AIDS

program On the other hand, expenditure on health care for PNC beneficiaries grew 26.23% in real

terms.xx Expenditure allocated to coordinating and regulating the sector remains the same in real terms, on account of the freeze on expenditure on personnel, its main component.

Total Expend

Net Expend

Total Expend

Net Expend

Total Expend

Net Expend Provision of Education Services 2,338.21

1,563.54

1,060.64

1,018.18

1,263.57

1,040.33

Teachers’ Salaries 725.31

10.97

15.16

6.14

209.19

9.33

Public Schools 660.00

-184.53

-Transfers to Tertiary Institutes 65.31

10.97

15.16

6.14

24.65

9.33

Transfers to Private Sector

-Goods and Services / Maintenance

-Infrastructure and Equipment 89.06

28.74

51.32

17.89

30.47

7.09

Transfers to Universities 1,523.84

1,523.84

994.15

994.15

1,023.92

1,023.92 Higher Education Development 1,523.84

1,523.84

994.15

994.15

1,023.92

1,023.92

Policy, Coordination and Regulation Actions 81.44

49.81

54.97

44.56

47.70

33.20

Central Administration 29.72

29.72

15.69

15.69

16.99

16.99

Quality Information and Assessment 6.13

3.73

2.65

1.91

3.35

2.45

Curriculum Management and Training 31.32

6.47

9.06

2.59

-Strengthening of Provincial Educational Administration

(PREGASE, PRISE Y PRODYMES) 8.27

3.90

22.47

19.26

22.26

8.64

Decentralized Entities (INAP, CONEAU, etc.) 5.99

5.99

5.10

5.10

5.11

5.11

Other Programs 27.04

21.75

11.71

8.25

14.44

13.43

Total 2,446.69

1,635.10

1,127.31

1,070.99

1,325.71

1,086.96

2002*

Item

2003**

2001

Table 15 National Government Public Expenditure on Health, 2001-2003

In millions of pesos of 2001

(*) Provisional accrual, (**) Initial credit

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Social Assistance Expenditure on Social Assistance for 2002 increased 35.06% in real terms, due

to the implementation of new employment and scholarship programs (monetary personal transfers) and of food programs (non-monetary transfers) Net expenditures on Social Assistance – excluding

transfers to the provinces – increased 97% in real terms The implementation of Plan Jefas y Jefes

de Hogar Desocupados (Unemployed Heads of Households program) explains most of this

increase: in 2002 it already represented 45.23% of national government expenditure on Social Assistance and 0.72% of GDP Within income transfer programs, expenditure allocated to scholarships for school students and subsidies granted to poor families through the Human

Development Income (IDH) program, called “Familias”, also grew significantly.xxi Expenditure allocated to scholarships almost tripled in real terms with respect to 2001

Expenditure on food programs rose abruptly in real terms –over eight times– mainly due to the

inclusion of the Food Emergency Program (PEA), which in 2002 concentrated 70.66% of food

programs Expenditure on school kitchens, which was traditionally financed by the provinces, also

Total Expend

Net Expend

Total Expend.

Net Expend.

Total Expend.

Net Expend Provision of Health Care 349.62 304.49 255.84 218.89 431.35 391.29

Providers (hospitals and health care centers) 299.80 254.75 194.86 165.11 208.90 169.40 Salaries, Inputs and

Maintenance

198.24 198.24 144.73 144.73 145.62 145.62 Assistance to PNC Beneficiaries

PNC

101.56 56.51 50.13 20.38 63.28 23.78 Goods and Inputs contributed by National Gov 49.82 49.74 60.98 53.78 222.44 221.89 Fight against AIDS and

Sexually Transmitted Diseases 49.82 49.74 49.59 48.96 103.86 103.31

Health Emergency (Insumos

-

11.39 4.81 118.58 118.58 Infrastructure and Equipment -

-

-

-

-

-

Policy, Coordination and Regulation Actions 92.41 91.10 52.36 49.60 53.58 52.86

Central Administration (mainly salaries) 52.01 50.70 32.91 30.20 31.66 30.95 Training for Health and Assistance

Human Resources 20.60 20.60 13.05 13.00 12.76 12.75 Health Policy Planning, Control, Regulation

And Enforcement/

Fiscalización??

6.43 6.43 4.33 4.33 4.39 4.39 Support for Public Health Studies and

Research

5.29 5.29 1.68 1.68 1.96 1.96 Health Sector Reform 8.07 8.07 0.39 0.39 2.81 2.81

Public Health Programs 89.19 66.47 150.84 136.47 144.80 121.36

Fight against AIDS and

Sexually Transmitted Diseases 3.41 3.41 1.03 1.03 0.29 0.29 Prevention and Control of Specific Diseases and Risks

including iimmunizations, VIGI-A, etc.) 42.46 38.81 100.52 100.08 78.23 76.25 Maternal and Child Care 29.46 10.46 40.32 26.39 49.69 28.38 Health Emergency Coverage 1.26 1.26 0.67 0.67 1.05 1.05 Other Programs 12.61 12.61 8.31 8.30 15.55 15.40

Total 531.22 462.05 459.05 404.95 629.73 565.51

Item

2002* 2003**

2001

stands out National government participation in school kitchen financing allowed greater coverage and in 2002 represented approximately 17.54% of expenditure on food assistance.

According to the 2003 budget, expenditure on this sector grows 20.44% in real terms This is mainly due to increments in monetary transfer programs –expanded coverage and consequently, of

expenditure on Plan Jefas y Jefes de Hogar Desocupados, which rises 40.72% in real terms, and the

over 100% growth of “Familias” program The other monetary transfer programs –basically social

assistance to PNC beneficiaries and scholarships for school students– remain at the same nominal

values, and therefore, decrease in real terms Concerning non-monetary transfers, they increase 10.55% in real terms given the real increment of food programs (11.04% on average).

Table 16 National Government Public Expenditure on Social Assistance, 2001-2003

In millions of pesos of 2001

(*) Provisional accrual, (**) Initial credit

Source: analysis based on data from the Directorate of Consolidated Social Expenditure

Total Expend

Net Expend

Total Expend

Net Expend

Total Expend.

Net Expend Social Programs/

Personal Monetary Transfers 1,085.54 998.36 2,143.77 2,143.35 2,694.33 2,666.39

-

-

1.16

1.16

18.17

18.17 Labor Emergency Plan (PEL) 135.55 135.55 38.29 38.29

-

- Financial Assistance for Social Expenditure

88.58

88.58 National Education Scholarships 45.16 45.16 132.13 132.13

88.58

88.58 Non-Contributive Pensions 755.75 755.75 422.87 422.87

378.81

378.81 Other Programs 19.92 19.92 52.18 51.79 127.22 99.28 Human Development Income

45.86

868.67

12.10 Ministry of Labor

16.14

15.34 11.55 11.55

9.81

9.81

Total 2,421.59 1,180.57 3,270.54 2,331.27 3,938.98 2,872.33

Item

2002* 2003**

2001

Box 4 Social Assistance in Times of Crisis

Throughout 2002 there were fundamental changes in social program design and execution In particular, several programs were implemented to mitigate the impact of the crisis on vulnerable groups In 2002,

Jefas y Jefes de Hogar Desocupados program was created by Decree N° 565, to guarantee the Family

Right to Social Inclusion This plan is mainly aimed at unemployed heads of households with children up

to 18 years of age Beneficiaries receive a monthly allowance of $150 and in exchange, they have to prove that their children are attending school, and to comply with vaccination plans for children under 18 years of age Formally, the plan foresees the participation of beneficiaries in productive projects, community services or training courses; however, this plan has not been extensively implemented The budgetary execution of the program is the responsibility of the national government, but the provinces and municipalities are involved in its implementation Besides, in each locality consulting councils formed by representatives from workers, business owners and social organizations are in charge of monitoring the program.

The Food Emergency Program (PEA) was created by Decree N° 108 in 2002 It is aimed at purchasing

food to cover the basic needs of the population with high vulnerability and subsistence risk According to that decree, program resources are to be distributed among provinces in the following way: 40% according to the percentage of the population under the poverty line and the rest by the co-participation coefficients established by Law N° 23,548.

The Human Development Income Program (IDH), also called “Familias”, which was created in 2002, is

aimed at promoting child development, health and school attendance and to avoid social exclusion of vulnerable families The program has two components: Income for Families and Joint Implementation

(Gestión asociada) The former grants subsidies to poor families that are not receiving economic help

from the State or family benefits, and have children under 19 years of age; in turn, families are expected

to comply with health and schooling objectives The latter is aimed at providing beneficiaries with access

to basic health and education services so that they can comply with the required objectives

The Health Emergency Program was created in 2002 and is formed by the Drugs and Hospital Inputs Supply project and the Generic Drug for Primary Health Care project or Remediar The former is aimed at

collaborating with the provinces in purchasing inputs and drugs to keep primary and secondary health

care services in operation On the other hand, Remediar is aimed at preventing the deterioration of the

health conditions of the poor Its objective is to ensure timely and free access to appropriate treatments, which should include drug therapy for approximately 80% of the reasons for primary care consultations.

Medicines are delivered by means of the Primary Health Care Centers (CAPS) public network, run by

provinces and municipalities.

The National Scholarship Program is aimed at students aged 13 to 19 who belong to low income families and are attending secondary school or EGBIII/Polimodal level These students are granted an annual

scholarship of $400 The objective of the program is to increment the schooling years of the adolescents who belong to the most vulnerable families, encourage their attendance and promotion, reduce the number of adolescents who do not comply with mandatory schooling years and increase their future employability The selection of beneficiaries takes into account the social and economic conditions of each family On the basis of these characteristics, students are selected on a priority scale The operation

of this program is decentralized and it is run by means of school circuits based on geographic proximity and assigned by provincial authorities For each circuit there is a scholarship quota assigned that is distributed among schools according to solidarity criteria that give priority to higher precariousness cases.