Challenge
In Peru, there is significant dispersion in municipal-level service delivery and outcomes; the percentage of the population without access to water ranges from 3.1 to 100 percent (2007), while municipal level poverty rates range from approximately 0.1 to 97.8 percent (2009). Over recent years, the Government has been particularly concerned with improving service delivery and, through raising awareness of this progress, strengthening the social compact between the Government and the general population. While a lack of financial resources can complicate service delivery, as evident in some municipalities in Peru, the availability of funds does not guarantee their use. (Municipal budget execution was 72.9% in 2011, pointing to a suboptimal use of resources.) Given the gaps in service delivery and the availability of public resources, the focus of dialogue has shifted from the availability of funds towards how funds can be used more effectively and efficiently to support development outcomes.
Solution
Building upon recent decentralization efforts, work undertaken in previous years, and the growing importance of extractive industries, a set of analytical products designed to assess the determinants of public expenditure, propose recommendations to strengthen public spending and development outcomes, as well as improve institutional capacities at national and sub-national levels was prepared. These products were intended to inform decision-makers, serve as a basis for generating dialogue around complex questions in state modernization, and provide inputs for more targeted future engagement.
Results
Understanding the constraints on implementation is critical for improving local governments’ performance as well as for informing national-level considerations, like subnational capacity-building strategies and resource allocations. In order to understand these constraints and possible solutions, three analytical pieces were produced:
- Case studies of municipal development and public management in mining areas
- A literature review of recent analyses of public management, investment and outcomes in Peru (with an emphasis on the subnational governments)
- A municipal-level analysis linking public financial management and outputs/outcomes. Work also contributed to identifying activities within the scope of the Local Governance and Mining (PKS) (P143505), emphasizing the Apurimac region.
Work focused on improving national government capacity to monitor national goals supported the Presidency of the Council of Ministers (PCM) in identifying potential areas for institutional strengthening and possible future improvements to administrative systems under the PCM’s responsibility (civil service, strategic planning, and public sector modernization).
The NLTA also fostered dialogue and helped to identify areas for future engagement, on topics such as tax and customs administration, logistics, and civil service reform.
