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The National Institutions Strengthening Project supports the Government of Guatemala (GOG)’s reform efforts to create an effective and transparent public financial management system (PFM) that will enhance effective governance by improving the GOG’s ability to address citizen demands through improved budget programming and spending.

The project also promotes responsible citizen participation that guarantees that diverse voices are heard throughout the budget cycle, while increasing citizen’s tax compliance to enhance the GOG’s domestic resource base. Through these activities, the project supports improved and more efficient delivery of public services, mitigating key drivers of poverty, inequality, and irregular migration. 

The project works primarily with four key GOG institutions: the National Planning Secretariat (SEGEPLAN), the Tax and Customs Administration (SAT), the Ministry of Finance (MINFIN), and the Presidential Commission for Open and Electronic Government (GAE). Additionally, the project engages civil society organizations (CSOs) across objectives to improve fiscal transparency and strengthen citizen oversight, while fostering the increased participation of women, youth, and Indigenous People.

GEOGRAPHICAL AND DEMOGRAPHIC APPROACH

Through improved tax collection and planning and programming of the national budget, the project promotes effective and inclusive governance aimed at improving the lives of all Guatemalans. In recognition that different populations face their own unique challenges, we follow an inclusive approach to PFM, seeking to advance the participation, oversight, and advocacy capacity of vulnerable groups across key budget planning, domestic revenue mobilization, and civic participation decision-making processes. In doing so, the project ensures that a broader range of voices are included in program design and implementation, with a special focus on engaging women, youth, and Indigenous People.

CONTEXT AND CHALLENGES

The GOG faces several PFM and governance challenges in the effective management of public funds and delivery of quality public services. Increases in social spending in recent years have not translated into improved access to basic public services for all Guatemalans. Additionally, decades of economic growth in the country have not resulted in a significant reduction in poverty and inequality, especially among vulnerable populations. As a result, Guatemala continues to face development challenges that contribute to deepening social and economic disparities within society that drive many to migrate irregularly every year.

With the project’s support, the GOG will strengthen its institutional capacity to raise domestic resources and improve budget planning and public expenditure efficiency, while effectively engaging civil society to enhance the transparent and accountable stewardship of public funds.

APPROACH AND RESULTS

The project strengthens Guatemala’s PFM systems—a pillar of efficient, transparent, and accountable service delivery and good governance. The project employs an adaptive, demand-driven approach to achieve its objectives by aligning interventions to the strategic priorities and needs of GOG counterparts and civil society. Complementing technical assistance to the GOG, the project supports civil society to advocate for greater public transparency, accountability, and oversight. While promoting citizen participation throughout the budget programming and expenditure cycle, we seek to increase tax compliance to support the GOG’s ability to deliver quality public services.

Key expected results include:

  • Budget planning, execution, monitoring, and evaluation strengthened
  • Tax awareness and voluntary tax compliance improved
  • Innovative public procurement mechanisms implemented
  • Civil society oversight of PFM and anti-corruption efforts strengthened

This project is expected to run from April 2022 through August 2025 with an estimated total USAID investment of $16.587,342.

USAID’s implementer for this project is DAI Global.