Public finance management - Subnational Strengthening Program

This program aims at providing technical assistance and training to Peruvian subnational governments in the area of public finance management (PFM). The objective is to improve public services delivery and increase cost transparency at the decentralized level. In Peru, regional governments and local governments represent more than 40% of total public spending. However, very little systematic action has been directed so far to support the strengthening and modernization of regional and local governments, thus reducing the capacity of sub-national governments to soundly deliver key public services in areas such as education, health, water and sanitation, waste management, public transport, and security.

Country/region Topic Period Budget
Economic and financial policy
14.02.2013 -
CHF 8'000'000
Background As of 2002, Peru has begun a new process of decentralization involving the gradual transfer of responsibilities and competences of economic and social matters to subnational governments (SNGs), which assume responsibility for an increasingly significant part of public investment. In 2013, subnational governments represented 42.6% of total public expenditure and 68.8% of public investment. Despite a significant transfer of competences and a large increase of internal resources, the decentralization process in Peru has not been accompanied by the strengthening and modernization of SNGs that is required to take on these new challenges.
Objectives The program’s goal is to strengthen Subnational PFM in order to reform public service provision at regional and local levels, in line with the PFM reform priorities defined at the national level, and with the purpose of promoting development and reducing poverty.
Medium-term outcomes Budget processes (planning, execution, control) are strengthened and better coordinated at subnational level.Transparency and accountability at subnational level have increased.Institutional capacity at subnational level has improved.Quality of dialogue between SNGs, national authorities and development partners has improved.The technical assistance at subnational level is more sustainable.

Expected results:   Implementation of best pratices to strengthen the coordination between planning and budget and to improve the level of execution and the quality of expenditures.Technical support to increase local revenues, in particular the property tax.Technical assistance for strengthening systems and procedures in the area of internal control.Peerlearning exchanges between subnational governements facilitating learning through the sharing of successful experiences.Implementation of a Post-Graduate Degree in Public Management in partnership with national and regional universities.

Directorate/federal office responsible SECO
Credit area Development cooperation
Project partners Contract partner
  • HELVETAS Swiss Intercooperation

Budget Current phase Swiss budget CHF   8'000'000 Swiss disbursement to date CHF   0 Budget inclusive project partner CHF   16'000'000
Project phases Phase 10 14.02.2013 - 31.12.2019   (Current phase)