Eurosocial+ is a cooperation program between Latin America and the European Union that aims to contribute to improving social cohesion in Latin American countries, as well as strengthening institutions by supporting their design, reform, and implementation of public policies, with a focus on gender, governance, and social policies.

Following a process of identification, dialogue, and definition, the project entitled “Methodology for the Formulation of Results-Based Budgets with a Gender Focus in Central America, Panama, and the Dominican Republic” was developed. This process is implemented jointly by the EUROsociAL+ Program and COSEFIN.

The Central America, Panama, and Dominican Republic region faces a dual fiscal challenge. On the one hand, it must develop and consolidate tax administrations capable of collecting sufficient revenue to expand the social coverage of redistributive

policies. On the other hand, it must improve the efficiency of public spending so that limited resources maximize their impact in terms of reducing income gaps and enhancing the quality and coverage of its social services.

In relation to this second challenge, the present initiative was defined, focusing specially on the development and strengthening of results-based budgeting methodology. This approach makes it possible to align budget programs objectives with specific goals aimed at improving citizens’ quality of life, while also establishing quantitative and qualitative monitoring and evaluation mechanisms to assess progress and impact.

This action is being promoted by the Council of Ministers of Finance of Central America, Panama, and the Dominican Republic (COSEFIN), through its Executive Secretariat in public budgeting matters. It builds on the Council’s efforts, which materialized in 2017 with the identification of ministerial priorities reflected in the Fiscal Priority Matrix, and in 2018 with the development of the “Regional Work Plan of the COSEFIN Fiscal Priority Matrix”, which included budgetary processes as priority area 6.

The work on this area was entrusted to the national representatives participating in COSEFIN’s Public Budget Working Group (GTTP), composed of national budget directors.

Of the seven priorities established in the fiscal matrix, this initiative corresponds to the implementation of results-based budgeting as a key line of work.

The Medium-Term Budget Framework (MPMP, by its Spanish acronym) project was a program design to support the implementation of Medium-Term Budget Framework (MPMP). It was a European initiative aimed at providing technical assistance to Central American countries represented in COSEFIN. The project—funded by Swiss cooperation—focused on capacity building in public finance topics such as the implementation and use of multi-year budgeting, the link between strategic planning and budgeting, and results-based management systems, among others.

Between 2005 and 2012, Swiss Cooperation, particularly through to the State Secretariat for Economic Affairs, supported the process of developing and implementing the Medium-Term Budget Framework (MPMP) tool in Nicaragua through

two consecutive phases of the Institutional Strengthening Program for the Government of Nicaragua to support the development of an MPMP.

Nicaragua’s progress in the MPMP field positioned it as a regional reference in the development of this tool, contributing to increasing the interest of the other COSEFIN member countries in advancing along the same path of budgetary modernization. This regional willingness is consistent with the interest of bilateral donors such as GIZ and AECID, and multilateral organizations such as the IDB, World Bank, and European Union, which aim to provide financial support to these countries within a results-based, multi-year budgetary planning framework.

Phase 3 of the MPMP Program was approved in April 2013 with an initial duration of three years. The implementation of this new phase was entrusted to the same consortium that carried out the previous two phases, composed of Eptisa and Fiscus.

In April 2015, the implementation period was extended for an additional six months (until September 30, 2016) without a budget increase, followed by a three-month reporting and closure period that concluded on December 30, 2016.

The so-called Regional MPMP Program had a dual objective:

On the one hand, to continue supporting the process in Nicaragua, which during previous phases focused on developing the MPMP as a budget formulation tool. Once progress had been made in formulation, the focus shifted towards strengthening the government’s monitoring and evaluation capacities. The objective was for Nicaragua to have, by the end of this phase, sufficient tools to apply throughout the entire budget cycle the approach linking planning and budgeting, results-based management, and multi-year budgeting.

On the other hand, in 2013, technical support was initiated for COSEFIN and its member countries by incorporating a Regional Component to promote and develop the MPMP tool and foster interaction among countries, by strengthening the role of COSEFIN Executive Secretariat. The countries eligible to receive this regional assistance were Guatemala, Honduras, El Salvador, Costa Rica, Panama, and the Dominican Republic. The assistance provided complemented national planning, existing reform plans, and ongoing cooperation efforts. Various types of support were offered, including dissemination seminars, diagnostic studies, support for the formulation and/or monitoring of roadmaps, and their implementation.