1 / 11

Enhancing Public Expenditure Effectiveness in Peru: Key Insights from the PETS Study

This report analyzes the Peru Public Expenditure Tracking Survey (PETS) conducted in 2004, focusing on public spending in municipal and educational sectors. It highlights significant issues like spending leakages, poor targeting, and the inefficacy of social programs such as the "Glass of Milk" initiative. Despite increased social spending, the lack of improvement in outcomes prompts critical questions about financial allocation. Recommendations call for better targeting, conditioned transfers, improved auditing, and enhanced beneficiary registry to optimize resource utilization.

arch
Download Presentation

Enhancing Public Expenditure Effectiveness in Peru: Key Insights from the PETS Study

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Peru Public Expenditure Tracking Survey José R. López-Cálix, LCSPE Highlights from PER Task Managers PEAM Core Course January 14, 2004

  2. PERU PETS • First in LAC • Covered 2 sectors: Municipal Spending and Education (in reality 2 PETS) • Municipal PETS covered 2 aspects: overall transfers (3 types) and the “Glass Of Milk” program • Education was a mix of a QSDS and a PETS on payroll and G&S budget

  3. Literature: Previous PETS Results • Leakages are bigger in non-recurrent spending • Leakages depend on the institutional structure (location of executing units, spending capacity and organization is critical) e.g. Uganda (local government), Ghana (transfer between CG and local) • Leakages are bigger in Education than in Health • Factors like children’s absenteism and ghost teachers have significant fiscal costs (Peru: US$100 million a year=annual investment level)

  4. Motivation of the Study • Social spending increased from 3.9 in 1993 to 6.9 % of GDP in 2002 • Protected pro-poor spending was about 2 percent of GDP • Big Questions: Where is the money? And why do we not see major progress in social outcomes? • Hypothesis: Poor targeting and leakages are the answer. How to prove it? PETS

  5. Issues on Spending Effectiveness • Gov spends on wrong goods and on a non-poor population • Gov spends on right goods and on poor population • Gov spends on right goods and on poor population, but these are not delivered • Gov spends on right goods and on poor population but these are “misused” by beneficiaries

  6. The Glass of Milk Program • Created by President Garcia (1984) under a populist platform—US$100 million a year (3.5% of total social spending, 20 % of extreme poverty) • Direct target: children 0-6 years and pregnant mothers and in post maternity. • Previous findings: • No nutrition impact • Some progressive targeting • Poor official audits • Important network of CSO (Mothers’s Committees)

  7. Vaso de Leche:Leakages Central Government Leak 1 Municipality Proceso de Compra Leak 2 Municipality-VdL team Leak 3 Committee VdL Leak 4 Household Leak 5 Beneficiaries

  8. Conclusions

  9. Policy Recommendations • Redefine rules: start by the basics: a good registry (Mothers’ Ctes and beneficiaries) • Good case for “conditioned transfers” • Cash transfer program could be an alternative (deviation vs leakage is an issue) • Mis-targeting needs different tests • Proper auditing procedures are the solution to the lack of controls

More Related