Programme and performance budgeting in Chile

3. Performance budgeting in Chile: Strengths and challenges

In recent years, Chile has made notable progress in strengthening its systems for generating performance information to support budgetary decision-making. The country systematically collects and presents various types of performance data, including performance indicators, programme monitoring results, and evaluation findings. The Chilean approach is internationally recognised as a good practice in the monitoring and evaluation of public programmes. Since 2019, DIPRES has further advanced this agenda by reinforcing its spending review framework, and it has recently begun implementing targeted spending reviews to inform resource allocation more effectively (OECD, 2024[15]).

Despite these advances, challenges remain in integrating performance information into budgetary processes. The connection between performance indicators, programme monitoring, and evaluations is often unclear, as these tools are typically developed in parallel rather than within a unified framework. Moreover, while there have been efforts to clarify the relationship between public programmes and their associated budgets, performance information remains only weakly linked to the budget structure, limiting its practical influence on funding decisions.

3.1. The use of strategic objectives and indicators in Chile

In recent years, Chile has developed a comprehensive framework to support the achievement of strategic objectives and track relevant indicators. These strategic objectives are formulated by each ministry as part of a four-year planning process overseen by the President's Office. Each year, ministries and institutions update their strategic objectives and indicators using pre-established templates developed by DIPRES, specifically within the Sub-Department for Planning, Design, and Monitoring (Box 8). DIPRES plays a central role in both developing and monitoring performance information. Notably, two of DIPRES’s strategic objectives focus on improving the effectiveness, efficiency, and relevance of public spending by integrating the Monitoring and Evaluation System with the budget and generating medium-term forecasting data (Dirección de Presupuestos (DIPRES), 2024[16]).

DIPRES also provides methodological guidance and support in defining objectives and indicators. With the 2025 budget formulation, DIPRES is implementing methodological changes aimed at enhancing the overall process. These changes include strengthening the role of ministries in collecting information from their services and providing new guidelines to improve the quality of strategic objectives (Dirección de Presupuestos (DIPRES), 2024[16]).

3.1.1. Improving the quality of performance information and its link to the budget

There are several opportunities to strengthen Chile’s performance management system, particularly in the formulation of strategic objectives and performance indicators.

First, strategic objectives often lack an outcome-oriented focus. Many are framed around inputs or internal management processes, rather than addressing public policy challenges or responding to citizens’ needs. These objectives are frequently broad in scope, blending intended outcomes with the means to achieve them, and failing to clearly specify measurable results that can be monitored and evaluated. A recent monitoring exercise by DIPRES revealed that 26% of strategic objectives are not formulated in a way that enables effective results-based monitoring. Furthermore, objectives are sometimes defined at different hierarchical levels, with interdependencies that complicate alignment and reduce their overall effectiveness.

Similarly, performance indicators could be more closely aligned with strategic objectives and focused on meaningful outcomes. At present, many indicators capture only partial aspects of service delivery or focus on internal processes, rather than measuring broader societal impacts. Notably, approximately 25% of performance indicators do not effectively assess their corresponding strategic objectives, limiting their usefulness in guiding decision-making and improving programme performance.

Finally, there is considerable room to improve the alignment and integration of strategic objectives and performance indicators with the budget structure. At present, multiple templates are used to present objectives and indicators, making it difficult to develop a clear and consolidated overview (Box 8). While there is some linkage between strategic objectives and budget chapters, no single document currently provides a comprehensive and coherent presentation of objectives, indicators, and budgetary programmes. This fragmentation weakens the overall effectiveness of the performance framework.

Although an Excel file is available that compiles the strategic objectives and indicators of all line ministries, services, and regional governments, the file contains over 1 000 lines, making it difficult to navigate and monitor effectively. In addition, the absence of an integrated IT system to support the collection, monitoring, and presentation of this information further reduces the usability and impact of performance data in the budget process.

Box 8. Different templates for performance information

Formulario A0

This template is used to define the strategic objectives of ministries. The methodology is developed by the Ministerial Coordination Division of the Ministry Secretariat General of the Presidency and distributed by DIPRES to all line ministries. It sets out strategic objectives for a four-year horizon, serving as a forward-looking planning tool at the ministerial level.

Formulario A1

Formulario A1 is used to define institutional and regional government objectives, and it also includes the previously defined ministerial objectives. Distributed by DIPRES, this template incorporates the institutional mission of each ministry or public agency. It establishes a loose connection to the budget structure by linking each objective to the corresponding good or service being delivered. However, the presentation of these linkages remains unclear and could be improved to enhance transparency and usability.

Formulario H

This template is designed to capture performance indicators associated with the objectives outlined in Formulario A1. Typically, one or two indicators are defined per objective. The form also includes fields for reporting past results, setting future targets, and providing explanatory notes. While useful for performance tracking, the current structure limits the depth and scope of performance information presented.

Source: Fact finding mission

3.2. Monitoring and Evaluation of public programmes

Chile has established a robust institutional framework, supported by clear methodologies and tools, for the monitoring and evaluation of public programmes. The system operates within a well-defined institutional and legal structure that delineates the roles and responsibilities of various stakeholders. Several legal instruments set out the foundations of this framework, assigning mandates and establishing standards and procedures for implementation.

The most recent regulation - the 2021 “Regulations for the Operation of the Evaluation System for Public Programs and Institutions” - was adopted under Article 52 of Decree Law No. 1,263, the Organic Law of Financial Administration of the State. This regulation provides detailed guidance on the types of evaluations to be conducted and the procedures governing their implementation.

Two main institutions are responsible for the evaluation process: DIPRES and the Ministry of Social Development.

• The Ministry of Social Development oversees ex ante and ex dure evaluations for all social programmes.

• DIPRES oversees ex dure monitoring, ex ante evaluations, and all ex-post evaluations for non-social public programmes (see Figure 6).

Figure 6. Evaluations in Chile and main actors

Source: (Dirección de Presupuestos (DIPRES), 2024[17])

Ex ante evaluations have been conducted regularly since 2008 for all new or redesigned public programmes (both social and non-social) (Dirección de Presupuestos (DIPRES), 2024[17]). These evaluations assess the coherence of the programme in terms of its objectives, goods and services, and beneficiaries. All ex-ante evaluations are published annually on the DIPRES website, organised by year and ministry.

Each year, DIPRES and the Subsecretaría de Evaluación Social (SES) of the Ministry of Social Development jointly manage the ex dure monitoring system, an annual process that covers the entire portfolio of public programmes, encompassing more than 700 initiatives. The system relies on performance indicators to assess key aspects of each programme, including its targeting, effectiveness, and efficiency. As part of this process, ministries are required to submit relevant data using a standardised reporting template, distributed by both DIPRES and SES. Once completed, these templates are published online in dedicated sections on each institution’s website, promoting transparency and public access to monitoring data. Importantly, the information collected through this self-reporting mechanism serves as a screening tool: DIPRES uses it to identify programmes that may warrant more in-depth evaluations, based on identified performance concerns or gaps in effectiveness.

Finally, DIPRES is responsible for conducting ex post evaluations. The Regulations for the Operation of the Evaluation System of Public Programs and Institutions outline various types of evaluations that can be carried out (Box 9). Each year, an Interministerial Committee, composed of representatives from the Ministry of Economy, Development and Tourism (MINECON), the Ministry of Social Development and Family (MDSyF), and the Ministry of Finance through DIPRES, develops and approves an evaluation plan. This plan, approved by the Ministry of Finance, specifies which evaluations will be conducted in the upcoming year. The 2024 evaluation plan included: nine Government Programme Evaluations, four Targeted Scope Assessments, and two Sectoral Evaluations.

Box 9. Different types of ex post evaluations conducted in Chile

Programme Impact Evaluation (IA)

This instrument generates rigorous causal evidence using experimental or quasi-experimental methodologies to assess both intermediate and final outcomes of a programme or public policy. Impact evaluations are carried out through two mechanisms:

1. Impact Assessment Fund: A public competition inviting academics to propose programmes for evaluation.

2. DIPRES Evaluation: Impact evaluations conducted by DIPRES in collaboration with external academic advisors, selected either through a public tender or by invitation.

Government Programme Evaluation (EPG)

This instrument evaluates the design consistency of a programme, its implementation and management, as well as its outputs and final objectives. The evaluation is based on the logical framework methodology, using primarily data administered by the evaluated programme or secondary sources. These evaluations are conducted by panels consisting of three or four independent professionals, selected through a public tender process, and last up to 8 months.

Targeted Scope Assessment (EFA)

These are focused evaluations that provide a deeper analysis of specific aspects of programme performance. Typically, an EFA evaluates one or two key dimensions, such as efficiency, implementation, or strategy design. Currently, these evaluations are led by professionals from the Department of Evaluation, Transparency, and Fiscal Productivity at DIPRES. External evaluators, chosen from a register of programme and public institution experts, are consulted for collaboration and validation, based on their expertise and professional profiles.

Sector Assessment (EN)

This comprehensive evaluation instrument analyses public policies by examining how various initiatives and institutional actions contribute to achieving their objectives. It considers the full cycle of government action, from strategic design to implementation, monitoring, evaluation, continuous improvement, and impact assessment (including outputs, intermediate results, and long-term effects). The evaluation process occurs in two stages:

1. Stage 1: Conducted by DIPRES in collaboration with the Ministry of Social Development and Family (MDSyF) for social policies, this stage involves defining the area of public policy and identifying the relevant programmatic offerings.

2. Stage 2: Conducted by an external expert panel, this stage evaluates public policy performance, validating the programmatic offer and assessing overall outcomes.

Source: (Dirección de Presupuestos (DIPRES), 2024[18])

Evaluations are primarily outsourced through public tenders to ensure the independence of the results. To maintain quality standards, DIPRES has established criteria that evaluators must meet and put in place a registry where evaluators must be registered. Additionally, the National Productivity and Evaluation Commission was established to further enhance the independence of evaluation outcomes (Box 10). While the National Productivity and Evaluation Commission will probably take on some of the evaluation responsibilities previously handled by DIPRES, the exact mechanisms for this transition remain uncertain.

Box 10. A new actor in policy evaluation: CNEP

The National Evaluation and Productivity Commission was established in 2015 as part of the Ministry of Economy and became an autonomous entity in 2021. Initially, the Commission was tasked with conducting studies to improve productivity and providing tailored recommendations to foster economic development in Chile. Since 2022, it has also been responsible for conducting evaluations, a role added to enhance the independence of the evaluation process and its results.

Currently, the Commission is focused on two main formats: the annual evaluation report, and the medium-term evaluation agenda. The 2024 Annual Evaluation report was the first one to be carried out by CNEP and provides analysis of the evaluations conducted in 2023 by different actors and identifies areas for further (Comisión Nacional de Evaluación y Productividad, 2025[19])action. The Medium-term Evaluation Agenda has the objective of better integrating the different instruments used in Chile to perform evaluations and provides recommendations to strengthen evaluation across government (Comisión Nacional de Evaluación y Productividad, 2024[20]).

The Commission is composed of 17 highly qualified professionals, with key decisions made by a Council of five members, each bringing diverse expertise. Since its establishment, the Commission has completed 25 studies, resulting in more than 500 recommendations.

At the moment, there is a bill under discussion for the creation of the Agencia para la Calidad de las Políticas Pública y la Productividad (Agency for the Quality of Public Policies and Productivity (ACPP)). The bill has the intention to define the Agency as a decentralised technical public service, whose purpose is to oversee, promote, and evaluate the effectiveness, efficiency, and co-ordination of the public policies, regulations, plans, and programmes. This agency is created based on existing institutional framework particularly from the National Evaluation and Productivity Commission and evaluation functions of the Budget Office (DIPRES). The objective of the bill is to strengthen the evaluation function with a new, more robust institutional framework.

Source: Fact finding mission, (Comisión Nacional de Evaluación y Productividad, 2025[19]; Comisión Nacional de Evaluación y Productividad, 2024[20]).

Finally, DIPRES has made significant efforts to promote the use of evaluation results by actively communicating and disseminating them. All evaluations are publicly available on the DIPRES website through a dedicated platform. In addition, DIPRES shares evaluation results with Congress and relevant line ministries. Each year, DIPRES publishes a report summarising the evaluations conducted, highlighting key findings and recommendations. In 2024, 15 evaluations were completed across various policy areas. There were considerable differences in the quality of each evaluation (Dirección de Presupuestos (DIPRES), 2024[18]).

3.2.1. Limited links between evaluation results and the budget

While the monitoring and evaluation system has many strengths, certain challenges persist. Specifically, despite its high level of systematisation, evaluation results appear to have limited impact on budget allocations. Since 2023, DIPRES has estimated the influence of the Monitoring and Evaluation System on the Budget Bill. Analysis shows that public programmes receiving positive ex-post evaluations, favourable ex-ante recommendations, or unqualified monitoring assessments receive, on average, a 6% increase in earmarked funding in the Budget Bill. In contrast, programmes with negative performance receive, on average, a 5% decrease (Dirección de Presupuestos (DIPRES), 2025[21]).

As previously noted, evaluation results tend to influence programme design and management but generally do not affect the funding of programmes. However, since 2017, efforts to better integrate evaluation results with budget decisions have been implemented, particularly by integrating the results of evaluations with the formulation phase of the budget.

Several factors contribute to the limited impact of evaluation results. First, the highly centralised nature of the Chilean evaluation system may limit the involvement of line ministries in the evaluation process, limiting their ownership of the results. Second, the interactions between the under directorate of Budgets and the Department of Evaluation, Transparency, and Fiscal Productivity could be strengthened to ensure that evaluation results are more effectively discussed during negotiation meetings with line ministries and the relevant budget offices (See Annex B for DIPRES organigramme).

Finally, a major cause of the disconnect between the budget and the evaluation system is that evaluated programmes are not easily identifiable within budget programmes. Currently, the "public programmes" that are evaluated tend to be more narrowly defined than the budgetary programmes. While recent efforts have been made to link public programmes to budget lines and funding, further improvements are needed (Box 11).

Box 11. Formulario E – linking public programmes to budget lines

In 2008, DIPRES introduced a new template, Formulario E, to improve the competitive allocation of financing for public programmes. Over time, this template has evolved into a tool that links public programmes to their corresponding budgets. Public programmes are no longer strictly tied to a single budget line; instead, multiple budget lines can be associated with each programme. To ensure clarity, the DIPRES team has mapped out these various possibilities, making the connection between programmes and budgets as transparent as possible.

Once the relevant budget lines are identified, they are reported in annual monitoring templates, which are used to track the performance of public programmes. This ensures that the relationship between programmes and their financing is consistently monitored and clearly identified.

Source: Fact finding mission.