Central America Social Expenditures and Institutional Review

Abstract

Social spending in Guatemala needs to achieve efficiency gains and increase to minimum levels to meet basic human development objectives. Current levels are so low that fiscal reform (in revenue generation and spending allocation) is urgently needed so that the state can fulfill its mandated coverage and quality in social service provision. In the last ten years, Guatemala has had decent economic growth but failed to improve human development indicators or reduce poverty (which has increased). Low and inefficient public spending, coupled with outdated legal and institutional frameworks, are significant barriers to increasing enrollment and providing quality education. Moving forward, more efficient, equitable, and cost-effective public education spending will require some important policy and institutional changes, including greater use of the incipient monitoring and evaluation system. There is need for increased spending in social assistance interventions, better coordination among implementing agencies, and revised targeting to ensure decent coverage of programs among the poorest. On the institutional side, the launching of the Ministry of Social Development (MIDES) provided a platform to manage the different programs of the sector under one umbrella; however, MIDES has not yet been able to tackle technical deficiencies in implementation.