Guatemala: Selected Issues

This Selected Issues paper provides a preliminary diagnostic of spending adequacy and efficiency in education, health, social assistance, and infrastructure, using an aggregate and sectoral lens, and assessing some of the institutional and personal financial management constraints hindering the government’s capacity to plan, execute and evaluate allocation of public resources. The Guatemalan government has placed renewed emphasis on social protection to reduce chronic poverty and food insecurity. Poverty levels in Guatemala remain high despite the existence of social assistance programs, in part because these programs operate at limited scale and with weak targeting performance. Guatemala has launched several promising initiatives to improve the quality and efficiency of public spending, which now need to be consolidated and institutionalized. While fiscal space may take time to materialize, efforts to evaluate the effectiveness of existing programs should begin now. Strengthening the link between spending and results through systematic spending reviews and a reviewed results-based budgeting model can help ensure that any additional resources are directed toward interventions with the highest social returns.