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 processes of designing, reforming, and implementing public policies, focusing its action on the areas of 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” is being carried out. This process is implemented jointly by the EUROsociAL+ Program and COSEFIN (the Costa Rican Financial Finance Council).

The Central America, Panama, and Dominican Republic region faces a dual fiscal challenge. On the one hand, it must develop and consolidate a tax administration capable of collecting sufficient revenue to expand the social coverage of its redistributive policies. On the other hand, it must improve the efficiency of its public spending so that limited resources maximize their impact in terms of closing income gaps and increasing the quality and quantity of its social services.

It is in relation to this second point that the present action was defined, specifically focused on developing and strengthening the results-based budgeting methodology. This methodology allows for aligning the objectives of budget programs with specific goals for improving citizens’ quality of life, as well as establishing quantitative and qualitative monitoring and evaluation mechanisms that allow for assessing the progress and impact of the programs.

This action is being promoted by the Council of Ministers of Finance and Treasury of Central America, Panama, and the Dominican Republic, through its Executive Secretariat for Budgetary Matters. This supports the institution’s efforts that materialized in 2017 with the sharing of priorities among the ministers, reflected in what was called the “fiscal interest matrix,” and in 2018 with the development of the “Regional Work Plan of the COSEFIN Fiscal Interest Matrix,” which included budgetary processes in fiscal interest area 6.

The work on this matter was entrusted to the national representatives integrated into the Public Budget Working Group (GTPP) of COSEFIN, composed of the various national budget directors.

Of the seven priorities established in the fiscal matrix, this one refers to the implementation of results-based budgeting as a line of work to be developed.

The Medium-Term Budget Framework (MPMP) project was a program supporting the implementation of a Medium-Term Budget Framework (MPMP). It was a European initiative to provide technical assistance to Central American countries represented on the COSEFIN (National Finance Council). The project—funded by Swiss cooperation—focused on training in public finance topics such as the implementation and use of multi-year budgets, the link between strategic planning and budgeting, and results-based management systems, among others.

Between 2005 and 2012, Swiss Cooperation, particularly through SECO (Secretariat for Economic Cooperation and Development), supported the development and implementation of the Medium-Term Budget Framework (MPMP) tool in Nicaragua through two consecutive phases of the Program for Institutional Strengthening of the Government of Nicaragua to Support the Development of an MPMP.

Nicaragua’s progress in the field of Multi-Year Budgetary Planning (MPMP) has positioned it as a regional leader in the development of this tool, a fact that has contributed to increasing the interest of the other COSEFIN member countries in pursuing this same path of budget modernization. This regional commitment aligns with the interest of bilateral donors such as GIZ and AECID, and multilateral donors such as the IDB, World Bank, and EU, which aspire 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 task of implementing this new phase was entrusted to the same consortium that implemented the previous two phases, comprised 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 Regional MPMP Program had a dual objective:

First, it continued to support the process in Nicaragua, which in its previous phases focused on developing the MPMP tool as a budget formulation instrument. Once formulation was well underway, the focus shifted to strengthening the government’s monitoring and evaluation capacities. The goal was that, by the end of this phase, Nicaragua would have the necessary tools to apply the logic of linking planning and budgeting, results-based management, and multi-year budgeting throughout the entire budget cycle.

On the other hand, in 2013, technical support was initiated for COSEFIN and its other members, adding a Regional Component to promote and develop the MPMP tool and foster interaction among countries by strengthening the role of the 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 offered complemented national planning, existing reform plans, and current cooperation efforts. Various forms of support were provided, including outreach seminars, diagnostic studies, support for the formulation and/or monitoring of roadmaps, and their implementation.