Second Programmatic Public Sector Development Policy Loan (PPDPL 2)

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The Second Programmatic Public Sector Development Policy Loan (PPDPL 2) Project for Turkey supports a sustained medium-term process of legal, institutional, and structural development that promotes growth, improves public governance and service delivery and strengthens social conditions by: (a) maintaining an enabling macroeconomic framework; (b) reforming the country's social protection system; (c) continuing the ongoing process of upgrading financial controls and public expenditure management; and (d) improving the administration and governance of the public sector. The government's program supported by the loan contains actions, milestones, and expected results in each of the above four broad areas of public policy. This reform program supports a substantial portion of the authorities' strategy to improve public service delivery and public institutions. There are four components of the project. The first component of PPDPL 2 supports the macroeconomic framework that has underpinned Turkey's recovery and strong growth after the 2001 crisis, with an aim to ensure sustainability of growth and mitigate risks arising from a complex and dynamic external environment. The second component focuses on improving the quality of fiscal adjustment as well as social protection through parametric pension reform, implementation of administrative reforms intended to strengthen administrative capacity, and supporting efficiency increasing and cost-saving measures in the health system in order to contain pressures in health expenditures. The third component supports sustained implementation of the Public Financial Management and Control (PFMC) Law that has underpinned the outstanding improvements in the public expenditure management system in Turkey. The areas supported focus on establishing strategy development units in all government institutions, introducing accrual basis accounting for the government, and improving the link between policy objectives, resources allocation process and the public investment. The fourth component supports improvements in the administration and governance of the public sector through actions intended to reduce regional disparities, improve quality of public delivery at local level, and improve the justice system. The areas supported focus on increasing the efficiency and the quality of judicial services, including increasing resources available to the judiciary, institutional and structural changes (such as the establishment of Regional Courts of Appeal) and modernization of the judiciary through upgrading of infrastructure and automation.