Promoting Fiscal Recovery and the Vision 2025 Agenda in the Decentralization and Subnational Government Sector

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The objective of this TC is to promote the subnational fiscal recovery and intergovernmental coordination of countries in LAC and to strengthen the capacity of subnational governments (SNG), in line with IDB's Vision 2025. In particular, this TC will develop country-specific diagnoses, focusing on the opportunity areas of the Vision 2025 more akin to the nature of the functions of SNG, including promotion of the digital economy to enhance public service delivery and improve the competitiveness of small and medium companies; and the prioritization of responses in gender and diversity and climate-change action. In addition, this TC will develop studies to tackle traditional and new challenges of LAC's SNG that have been highlighted by the pandemic, including, among the former, weak subnational fiscal capacities, high dependence on transfers, and regional fiscal disparities; and among the latter, underdeveloped intergovernmental coordination mechanisms. These priorities are reflected in the policy dialogues that the Bank has been coordinating within the "Decentralization and Subnational Fiscal Management Network"; hence, the activities proposed in this TC are regional in nature, although they will focus on three countries that have expressed interest and allow for a contrast in LAC's regions and experiences: Costa Rica, Paraguay, and Peru.