Since 1989, the Bank has given increasing support to Mexico's National Solidarity Program (PRONASOL) in projects for education, health, transportation, and regional development. Despite the Bank's growing association with PRONASOL, given its magnitude and complexity, it is easy to underestimate its sweeping scope, size and impact on Mexican development. PRONASOL is a matching grant program that, except for its scale, can be compared to some of the Bank- financed social investment funds in Latin America (see Glaessner, 1994). Like social funds, much of PRONASOL's operational rules require extensive local participation in identifying and sponsoring small to medium-sized projects. However, the annual flows in PRONASOL are an order of magnitude larger than the largest social funds. Another difference is that unlike the funds, PRONASOL operates within a standing ministerial structure, rather than through autonomous institutions created in most social funds to act as executing agents. PRONASOL's programmatic predecessors (going back to the 1970s) were mainly instruments to foster coordinated investments in infrastructure. Under PRONASOL social spending has increased significantly, and this adds an equity dimension to its promise of improving allocational and production efficiency and coordinating intersectoral investments at the local level. Already, PRONASOL has fostered intensive grass-roots activity throughout the country. If implemented as designed, PRONASOL could strengthen the capacity of community residents as well as local governments to play important roles in identifying felt needs and providing public services. Some evidence suggests PRONASOL could help reduce the costs of local projects compared to conventional, ministerial investments. But all of these judgments about effectiveness, though tested against seasoned opinions of practitioners, still require more careful evaluation. The purpose of this note is to describe the scope and mechanics of PRONASOL and to identify where further work may be necessary on specific issues of interest to the Bank.
