Green budgeting refers to the use of budgetary policy-making tools to progress climate and environmental objectives. It involves assessing the climate and environmental impact of budgetary and fiscal policies and aligning them with national and international commitments. Green budgeting comprises four building blocks applicable throughout the budget cycle: 1) institutional arrangements; 2) methods and tools; 3) accountability and transparency; and 4) enabling environment in budgeting (OECD, 2020). In 2022, 5 of the 12 surveyed countries in Latin America and the Caribbean (LAC) region (Chile, Colombia, the Dominican Republic, Honduras and Mexico) reported implementing green budgeting (42%). Argentina also has plans to introduce green budgeting and five others are actively considering it (Figure ‎6.1). In contrast, the majority of OECD countries – 24 of the 36 surveyed (67%) – implement green budgeting, a figure that has almost doubled between 2021 and 2022 (OECD, 2023).

Gender budgeting is a public governance tool that can be used to ensure that the budget reflects the priorities of the government on gender equality (OECD, 2023). When implemented effectively, gender budgeting helps reduce gender inequalities in public policies and in the allocation of resources. The successful implementation of gender budgeting requires a strong institutional and strategic framework, developing effective methods and tools to facilitate its adoption and execution, and fostering an enabling environment within the administration to support effective implementation. Accountability mechanisms and a focus on delivering and measuring impact also help ensure the effectiveness and sustainability of gender budgeting (OECD, 2023). In Latin American and Caribbean (LAC) countries, the use of gender budgeting is widespread. Of the 13 countries surveyed, 10 practise gender budgeting (77%), compared to 61% of OECD countries. In addition, Costa Rica and Guyana are considering its implementation (Figure ‎6.4).

Spending reviews are a core instrument for expenditure prioritisation and reallocation. They offer a way for governments to support the sustainability of public finances by systematically analysing existing expenditure. They also provide opportunities to align spending with government priorities and improve its effectiveness. Efficient public spending needs information and evidence to support the reallocation of resources or reformulation of programmes that are not delivering the expected results or may no longer reflect the priorities of citizens. Spending reviews are gaining momentum in Latin American and Caribbean (LAC) countries, especially considering the impact of the COVID-19 pandemic on the region's public budgets. Their scope varies from country to country, and their implementation also requires customised institutional setups. Spending reviews require the participation of all ministries or public agencies within a country. However, certain individual reviews require either the participation of a single ministry or several ministries, if it is a cross cutting review. Their roles depend both on the country’s set up and which stage of the process they are involved in (e.g. implementation or decision-making phase).

Health systems worldwide were at the forefront of the response to the COVID-19 pandemic. In a context of urgency and uncertainty, additional financial resources were allocated to this sector, and procedures were often relaxed to cope with emergency requirements. As a result, and in a similar way to OECD countries, Latin American and Caribbean (LAC) countries resorted to the use of contingency and extra-budgetary funds, supplementary budgets, and other measures including loans and resource readjustments, as well as tracking these measures. As elsewhere, the response to the COVID-19 within LAC was not homogeneous and was influenced by different institutional realities and the available tools.