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Guatemala - First and Second Programmatic Fiscal and Institutional Development Policy Loan Project (English)

Ratings for the First and Second Programmatic Fiscal and Institutional Development Policy Loan (DPL) Project for Guatemala were as follows outcomes were moderately satisfactory; risk to development outcome was Substantial; Bank performance was satisfactory and borrower performance was moderately satisfactory. Some lessons learned include: the implementation challenges relating to the fiscal reform component of the first and second DPLs illustrate the difficulties of achieving program objectives that depend on legislative approval, particularly in the area of tax reform. Repeated attempts to increase revenue collections through raising tax rates and expanding the tax base have failed in the past, and continue to face stiff opposition. Moreover, it is important to acknowledge the intrinsic difficulty of implementing redistributive tax reform in a highly unequal society and within a short time horizon. The experience of the first and second DPLs implies that the Bank could be more modest in its expectations, and could foster support for reform by identifying and helping build constituencies with shared interests or who stand to gain from reform. Another related lesson that can be drawn from the DPLs is that although the planned fiscal reforms would have generated significant revenues, measures to improve tax administration can also generate large revenue gains, and are politically more palatable. In Guatemala, introducing tax controls and modernizing tax systems not only increased efficiency but had a big pay-off through reducing evasion. Another lesson that can be derived from the operation relates to the policy measures on increasing the transparency of public trust funds. The stated objective was to increase transparency in the hope that eventually this would create pressure to increase oversight and efficiency.

Details

  • Document Date

    2010/06/30

  • Document Type

    Implementation Completion and Results Report

  • Report Number

    ICR1909

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Guatemala,

  • Region

    Latin America & Caribbean,

  • Disclosure Date

    2011/10/20

  • Disclosure Status

    Disclosed

  • Doc Name

    Guatemala - First and Second Programmatic Fiscal and Institutional Development Policy Loan Project

  • Keywords

    access to public information;small and medium enterprise;Fiscal Reform;outcome indicator;Public Financial Management;financial and private sector development;financial group;customs management system;public financial management reform;ip disbursements archived;Macroeconomic Stability;Integrated Financial Management System;conditional cash transfer program;decline in tax revenue;personal income tax regime;short period of time;per capita growth rate;efficiency in public spending;general public administration sector;fiscal space;quality at entry;income tax withholding;access to finance;result indicator;Tax Administration;fiscal deficit;economic crisis;demand for transparency;General Finance Sector;Poverty & Inequality;customs clearance time;opportunities for corruption;financial sector stability;international financial institution;total tax revenue;amount of credit;risk profile;regular supervision;social spending;medium size companies;area of customs;secondary debt market;customs clearance process;real estate collateral;gross revenue tax;measure of poverty;rural indigenous population;quality of supervision;global financial crisis;exchange rate;Exchange Rates;commodity price fluctuation;verification of eligibility;loss of life;customs clearance documentation;household living standard;high poverty rate;civil society group;amount of collateral;civil society network;living standard survey;share of credit;financial market development;domestic public debt;tax administration measure;customs clearance procedures;commodity price shock;tax administration system;Social Safety Nets;Development Policy Lending;financial sector soundness;Rule of Law;perception of corruption;Public Procurement System;tropical storm;current account deficit;foreign direct investment;current account balance;nominal exchange rate;expenditure policy;increase tax revenue;local government entity;Development Policy Loan;reduction in poverty;global economic slowdown;domestic financial system;macroeconomic policy framework;total credit;natural disaster;business income;tax declaration;financial reporting;Tax Reform;measure of support;competitive bidding;movable asset;financial conglomerate;public resource;budget framework;Tax Modernization;debt issuance;political party;temporary tax;financial indicator;positive impact;transparent monitoring;improving governance;political parties;fiscal revenue;additional revenue;results framework;investment climate;risk indicator;political risk;increasing transparency;electronic submission;Tax Evasion;credit access;primary author;program development;exogenous shock;Banking Supervision;vulnerable group;prudential rule;short-term debt;customs official;debt instrument;short-term measures;public accountability;congressional approval;

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Citation

Guatemala - First and Second Programmatic Fiscal and Institutional Development Policy Loan Project (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/236891468254095622/Guatemala-First-and-Second-Programmatic-Fiscal-and-Institutional-Development-Policy-Loan-Project