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Enhancing Creditworthiness of Subnational Authorities in Latin America Through Peer Learning

This report explores the peer-to-peer assistance model implemented by ICMA to improve the creditworthiness of subnational authorities in Latin America. Funded by the World Bank's PPIAF, the project was executed in Mexico, Costa Rica, and Argentina, providing a structured approach to financial management, including the establishment of long-term capital improvement plans and multi-year budgets. The initiative showcases the impact of collaborative learning and technical assistance, illustrated by successful partnerships and implemented reforms that helped maintain credit ratings during economic turbulence.

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Enhancing Creditworthiness of Subnational Authorities in Latin America Through Peer Learning

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  1. Improving Creditworthiness of Subnational Authorities in Latin America: Using Peer-to-Peer AssistanceDavid GrossmanDirector, International ProgramsICMA

  2. Regional Credit Rating Improvement Program • Funded by World Bank, Public-Private Infrastructure Advisory Facility (PPIAF) • Implemented by ICMA México-Latinoamérica • What are the essential elements of the peer-to-peer approach? • How was the peer-to-peer approach implemented in Mexico, Costa Rica, and Argentina? • What was the impact on participating subnational authorities?

  3. Essential Elements of Peer Learning: • ICMA CityLinks Model • Philosophy: Cities learn best from other cities

  4. CityLinks Process • Programmatic selection criteria • Intention to borrow for infrastructure • Commitment to reform • Selection of partners • Exchange visits • Diagnostic assessment • Definition of work plan • Direct technical assistance • ICMA facilitation • Documentation of experience • Regional workshops

  5. RCRI Partnerships • Mexico Pilot • State of Jalisco – Phoenix, AZ • State of Guerrero – El Paso, TX • Municipality of Puebla – Burlingame, CA, and Genesee County (MI) Road Commission • Costa Rica • Municipality of Cartago and regional electric utility (JASEC) – El Paso, TX • Municipalities of San Carlos and Esparza – Burlingame and the Genesee County Road Commission • Argentina • Municipality of Mendoza and province of Salta – Santa Fe County, NM

  6. Impact of RCRI Program • Established long-term capital improvement plans • Established multi-year budgets • Developed written debt and budget policies • Two Mexican entities kept their credit ratings and obtained a line of credit at a time when many ratings were being lowered

  7. Practitioner’s Guide • Outlines the management policies • and practices that affect an entity’s • creditworthiness • Provides step-by-step guidelines • for reviewing management issues • relating to debt, liquidity, financial • controls, and other factors • Provides model financial management • policies that address areas in need of • improvement

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