Costa Rica Social Risk Management DPL DDO

The objective of the Social Risk Management Development Policy Loan with a Deferred Drawdown Option Program is to strengthen the targeting and efficiency of Costa Rica’s social protection system. It is comprised of two pillars that reflect priorities identified in the 2023 Costa Rica SCD update: improvements of social assistance’s targeting and reforms to lessen fragmentation and enhance coordination. The first pillar focuses on improving the poverty targeting of social spending in Costa Rica by strengthening the uptake, robustness, and inclusiveness of its integrated social registry. The second pillar addresses the need to enhance the efficiency of social spending in Costa Rica by reducing fragmentation, improving and coordinating the delivery of social assistance programs, and reducing costs of the delivery of social protection interventions. The stand-alone DPL/DDO modality offers the option of quickly mobilizing liquidity to finance priority spending, including if Costa Rica is hit by climate, social, or economic shocks and needs to cover a targeted and temporary social assistance response. The DPL-DDO supports the government in developing and implementing policies aimed at improving social spending, strengthening adaptation to climate change, and improving opportunities, with a focus on poor and vulnerable groups. The operation also supports outcome area one of the new corporate-score card: protection for the poorest. By improving the targeting and coverage of social assistant programs among the lower income segments of the population the operation directly contributes to advancing these outcome areas. Additionally, by helping improve the adaptiveness of the social protection system, the operation contributes to the prevention and mitigation of the impact of climate shocks among these segments.