How public money is managed at the local level has a direct impact on people’s lives – from whether children get their school books to the conservation of local environments on which many communities depend for their health and livelihoods.

For more than a decade, the Basel Institute on Governance and the Swiss State Secretariat for Economic Affairs (SECO) have partnered with regional and municipal governments across Peru to strengthen public financial management and improve public service delivery.

Through the Programa GFP Subnacional, a dedicated team combines practical technical assistance with innovative approaches, including data analytics, digital tools and behavioural interventions. Together, these help governments make better decisions, use resources more effectively and communicate better with the people they serve.

In this Q&A, Programme Director Carlos Vargas explains how Programa GFP Subnacional – the Subnational Public Finance Management (PFM) programme – works, what it has achieved and why its lessons matter beyond Peru.

How does the programme help governments deliver better services?

Broadly speaking, the programme aims to enhance processes for public service delivery and improve the capacity of subnational governments to use public resources responsibly.

In practice, this means really hands-on assistance with things like tax management or budget planning that both covers the required resources (e.g. teaching materials) and considers what’s needed to deliver a service (e.g. enough vehicles to distribute the materials to schools).

This in turn ensures that citizens receive public services in the quantity and quality they need and projects are completed within budget and on time.

In other words, the programme aims to make a real difference in people’s lives – particularly in areas like education, health, biodiversity conservation and the fight against climate change.

Our advisors work hand-in-hand with local officials, providing technical assistance, training and support with technology in line with national priorities and systems.

What difference has the programme made in terms of revenue generation?

The results have been significant.

One of the clearest examples comes from Tarapoto in the San Martín region. Through automated WhatsApp reminders, streamlined processes and a new online payment system, the municipality increased property tax collection. The additional revenue helped fund a bridge that now provides around 800 pupils with safe, direct access to their school.

In the Municipality of Piura, we helped automate tax collection processes using algorithms and artificial intelligence to better understand taxpayer behaviour.

This allowed us to group taxpayers into categories and design tailored communication strategies for each, which helped increase property tax revenue – funds governments need to invest in public services.

How about in education or conservation?

In education, we have assisted regions to ensure that around 95 percent of school materials now arrive on time before the start of the school year. The programme has also contributed to the timely delivery of vaccines and medicines.

On biodiversity conservation, we have supported three regional governments in Peru to establish a baseline for deforestation, drawing on 24 years’ worth of data to identify zones that are particularly vulnerable to deforestation and other illegal activities.

Based on this, we have developed an early warning system that enables regional governments to act more quickly and direct their limited resources towards the most critical areas rather than trying to cover vast territories.

Why are regional and municipal governments so important?

In Peru, public spending is highly decentralised – around 35 to 45 percent of the budget is allocated to regional governments and municipalities.

These are the entities closest to citizens. If this final link in the chain does not work well, citizens will not receive the services they need.

How does better public finance management reduce corruption risks?

By improving the efficiency and transparency of processes within public bodies, we limit discretionary power and reduce opportunities for corruption.

The programme has generated concrete evidence of this. The regional government of Loreto – Peru’s largest region – for example, rose from 18th to 4th place in the national ranking of corruption prevention capacity after becoming a programme beneficiary.

This kind of progress matters, because corruption ultimately undermines the delivery of public services and the responsible use of public resources.

What can other countries learn from Peru’s experience?

We see the Programa GFP Subnacional as a laboratory for public finance innovation. Over more than a decade, it has generated proven tools and approaches that improve efficiency, reduce losses and help ensure the quality of public services.

This body of evidence – tested and refined over time – represents a form of global learning.

The lessons and best practices the programme generated can be shared not only across Peru but also with other countries, where they can be adapted to local needs.

In this sense, the Swiss government’s investment in the programme goes beyond impact in a specific region: it is an investment in generating knowledge and innovations that can inform public financial management reforms and help improve public services and the lives of citizens elsewhere.