{
  "title": "Peru: Selected Issues",
  "publication": "IMF Staff Country Reports, June 10, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2025/06/10/peru-selected-issues-567577",
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  "summary": "This Special Issues paper explores the impact of revamping fiscal decentralization to secure Peru’s position as a leading critical mineral exporter. After 20 years, fiscal decentralization has failed to fulfill its goals.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- This Special Issues paper explores the impact of revamping fiscal decentralization to secure Peru’s position as a leading critical mineral exporter.\n- After 20 years, fiscal decentralization has failed to fulfill its goals.\n- While fiscal decentralization has the potential to enhance local governance and improve public service delivery, significant challenges persist."
    },
    {
      "heading": "Key findings",
      "content": "- Reducing horizontal inequality could allow for a better targeting of resources.\n- Enhancing the capacity for medium-term planning in regional and district governments would improve spending efficiency.\n- Closing development gaps will require enhancing the scale and impact of investment projects.\n- Traceability of the final use of central government transfers at the subnational government level is critical for effective oversight."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Amendments to the decentralization framework should be accompanied by strengthening accountability and oversight from the central government.\n- Establishing internal controls and revamping audit processes to shift the focus away from intrusive, legalistic monitoring and toward facilitating project implementation would both promote more efficient investment while preventing corruption.\n- Improve the fiscal decentralization framework to better position Peru to benefit from the green transition."
    },
    {
      "heading": "Fiscal decentralization challenges (summarized)",
      "content": "- Two decades of decentralization have not met intended objectives.\n- Persistent horizontal inequality undermines resource targeting.\n- Limited medium-term planning capacity at regional and district levels reduces spending efficiency.\n- Current audit and oversight practices are overly intrusive and legalistic, impeding project implementation."
    },
    {
      "heading": "Priorities for implementation",
      "content": "- Strengthen central government oversight mechanisms while preserving local decision-making where effective.\n- Increase traceability of transfers to ensure final use aligns with intended investment and service-delivery objectives.\n- Reorient audit processes toward facilitation of project implementation and corruption prevention.\n- Scale up and enhance the impact of public investment projects to close development gaps.\n\nPeru: Selected Issues, IMF Staff Country Reports, June 10, 2025.\n\n---\n\n Content in this bundle\n\n- Peru: Selected Issues; IMF Country Report No. 25/126; May 20, 2025\n  - Peru: Selected Issues; IMF Country Report No. 25/126; May 20, 2025 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Peru: Selected Issues; IMF Country Report No. 25/126; May 20, 2025 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 10, 2025",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798229013741.002",
    "This Special Issues paper explores the impact of revamping fiscal decentralization to secure Peru’s position as a leading critical mineral exporter.",
    "After 20 years, fiscal decentralization has failed to fulfill its goals.",
    "While fiscal decentralization has the potential to enhance local governance and improve public service delivery, significant challenges persist.",
    "Reducing horizontal inequality could allow for a better targeting of resources.",
    "Enhancing the capacity for medium-term planning in regional and district governments would improve spending efficiency.",
    "Closing development gaps will require enhancing the scale and impact of investment projects.",
    "Traceability of the final use of central government transfers at the subnational government level is critical for effective oversight.",
    "Amendments to the decentralization framework should be accompanied by strengthening accountability and oversight from the central government.",
    "Establishing internal controls and revamping audit processes to shift the focus away from intrusive, legalistic monitoring and toward facilitating project implementation would both promote more efficient investment while preventing corruption.",
    "Improve the fiscal decentralization framework to better position Peru to benefit from the green transition.",
    "Two decades of decentralization have not met intended objectives.",
    "Persistent horizontal inequality undermines resource targeting.",
    "Limited medium-term planning capacity at regional and district levels reduces spending efficiency.",
    "Current audit and oversight practices are overly intrusive and legalistic, impeding project implementation.",
    "Strengthen central government oversight mechanisms while preserving local decision-making where effective.",
    "Increase traceability of transfers to ensure final use aligns with intended investment and service-delivery objectives.",
    "Reorient audit processes toward facilitation of project implementation and corruption prevention.",
    "Scale up and enhance the impact of public investment projects to close development gaps.",
    "**Peru: Selected Issues; IMF Country Report No. 25/126; May 20, 2025**"
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