2. The Strategic Plan’s Methodology and Structure: Identifying Clear and Sound Policy Priorities for Nuevo León

The Strategic Plan reflects a high-level commitment to long-term policies in Nuevo León

The main planning instrument of Nuevo León’s council is the Strategic Plan for the state of Nuevo León 2015-2030 “Nuevo León Mañana” (SP). The Plan is widely perceived as an important initiative, especially as it is the first integrated long-term planning instrument designed jointly by government and civil society in a Mexican subnational government. The Strategic Plan also brings value as it offers the possibility to plan beyond the electoral cycle, which offers opportunities to bring greater stability to policy making.

The Strategic Plan was published in 2016, following almost a year of events, meetings, public consultations with citizens and experts from the council’s commissions (Council of Nuevo Leon, 2019[1]). These stakeholders worked with the state government to define key indicators for monitoring the plan and aligning the visions of each commission. Article 3 of the Strategic Planning Law states that in addition to contributing to the sustainable development of the state, the Plan aims to consolidate democracy, promote government integrity, accountability, efficiency and productivity.

The Plan’s development started with a comprehensive diagnosis of the economic, environmental and social conditions of the state of Nuevo León. The data was collected by a consulting firm through benchmarking exercises, interviews with experts, and different sources such as the different secretaries of the state government and the National Institute of Statistics and Geography (INEGI). The diagnosis exercise aimed to be consensual, with an element of civic participation through the organisation of expert and public consultations.

This analysis led the commissions to identify many “opportunity areas” for the state of Nuevo León. These opportunity areas were then prioritised according to their degree of feasibility and impact. The Strategic Plan is organised into 11 thematic areas (each one associated with a sub-commission or commission of the council) with 47 opportunity areas, divided into 101 strategic lines and accompanied by 45 projects (see Figure 2.1). Moreover, the Plan has 8 transversal central themes.

Figure 2.1. Pyramid of the main layers of the Strategic Plan

Note: This figure represents the main layers of the Plan and their hierarchical structure in general terms. However, it should be noted that certain sub-commissions have chosen to use a slightly different structure as is further explained in this chapter.

Source: Authors

The problem analysis phase did not build on lessons learned from previous reforms

Problem analysis, which is the analysis of the current state of affairs (achievements, challenges and opportunities) based on lessons learned from previous reforms and development plans, is an essential step for strategic planning (OECD, 2018[2]). It provides lessons on why previous policies were successful or not, as well as the evidence base for prioritisation and objective setting (steps 2 and 3 of the strategy setting process).

In Nuevo León, the data for the diagnosis in each thematic area was collected by a consulting firm through benchmarking exercises, interviews with experts, and different sources such as the different secretaries of the state government and the National Institute of Statistics and Geography (INEGI) (Council of Nuevo León, 2016[3]).The diagnosis aimed to be consensual, with an element of civic participation through the organisation of expert and public consultations (Council of Nuevo León, 2016[3]). Therefore, the diagnosis has been context-specific, shared by the major stakeholders and based on sound international and national sources – thus laying a credible evidence-base for the rest of the strategic planning.

Nevertheless, the diagnosis established for each commission/sub-commission (section on “Diagnóstico de la situación actual”) did not systematically include a thorough assessment of previous reform initiatives in Nuevo León. In order for strategic planning to be truly effective, it should draw lessons from previous reforms and evaluate why previous plans or reforms have succeeded (or failed).

The prioritisation process omitted factors such as sequencing and trade-off between opportunity areas

These diagnoses led the commissions to identify many opportunity areas for the state of Nuevo León. As Figure 2.3 shows, these opportunity areas were then prioritised according to their degree of feasibility and impact: In the end, 47 opportunity areas were retained.

Figure 2.3. Methodology for prioritising opportunity areas

Source: Adapted from Council of Nuevo León (2016[3]). Plan Estratégico para el Estado de Nuevo León 2015-2030 [Strategic Plan for the State of Nuevo León 2015-2030], http://www.nl.gob.mx/publicaciones/plan-estrategico-para-el-estado-de-nuevo-leon-2015-2030

This type of prioritisation is crucial to ensure that the designed plan is realistic and can be implemented (OECD, 2018[2]). In Nuevo León, the general perception from stakeholders is that the Strategic Plan accurately reflects the general priorities of the state from the point of view of civil society, suggesting that the prioritisation exercise led by the commissions and the consultancy firm was effective in identifying most important long-term issues for the state.

However, the methodology did not take into account how the different opportunity areas link to each other, and specifically how some opportunity areas may actually contribute to the achievement of others. Likewise, the methodology does not offer an analysis of potential trade-offs between opportunity areas.

For instance, the “Effective Government and Transparency” commission left aside opportunity areas such as “Access to information” or “Open and Transparent State” to favour much broader objectives such as “Accountability in Public Institutions”. Nevertheless, OECD experiences show that both access to information and open and transparent government, like integrity, can be key elements to achieving accountability in public institutions (OECD, 2017[4]).

Similarly, the “Effective Government and Transparency” axis mostly includes opportunity areas related to anti-corruption and control. Including further opportunity areas on the topic of good governance, state modernisation and public spending efficiency may be a way to support the implementation of the Plan. Most other states in Mexico have chosen to select opportunity areas or strategic lines related to these topics (see Box 2.1).

Objective setting did not rely on a clear logic model and some objectives are difficult to measure or to understand

Objective setting is the process by which policy-makers define the level of ambition of change compared to the current state of affairs, in relation to the selected problems to be addressed (OECD, 2018[2]). In the case of the Strategic Plan, the objective setting stage was key to breaking down the vision into aspirations; opportunity areas, strategic lines and initiatives, as well as projects (see also Figure 2.1 for a schematic representation of the Plan’s layers).

Objective setting for the Strategic Plan did not consistently rely on a clear logic model (or theory of change see Box 2.2) or even a shared methodology amongst commissions ensuring consistency between the level of objective (outcome or output objective for example) defined for opportunity areas throughout the Plan. It lacks an explicit or consistent framework to define how a downstream layer, for example a strategic line, can influence an upstream layer, for example, an opportunity area across the various commissions. As a result, the Plan does not demonstrate how the state government should and can mobilise its resources in order to reach the intended policy results – making buy-in for the Plan more difficult.

A more consistent framework would entail some coherent links for how inputs and processes can be geared towards outputs and achieving outcomes, along the policy value chain, as is demonstrated in Figure 2.4. Reliable data is also required to inform the setting of objectives, targets and eventually performance indicators.

Figure 2.4. Moving from objectives to impact

Source: adapted from (Schumann, 2016[7])

This lack of a consistent framework and reliable data affects the adaptability of the Plan in the face of changing political, economic and social circumstances. Indeed, having a clear understanding of the conditions for change would allow decision-makers to make corrections if the selected approach is not working or if anticipated risks materialise (see Box 2.2).

The objectives should be formulated in simple language, avoid the use of abbreviations, professional jargon and long and complex sentences (OECD, 2018[2]), if they are to be clearly understood by stakeholders and the public. In order to ensure that objectives set out a realistic and clear pathway for policy reform, the suitability of objectives can be tested against the so-called SMART model, explained in detail in Box 2.3.

In the case of the Strategic Plan, opportunity areas do not consistently hold up to this framework. Opportunity areas such as “Promote the prevention of high frequency crime” do not appear to be concrete concerning the intentional impacts for society, as the concept to “Promote” is not necessarily linked with better outcomes. Another example are the areas of opportunity of the Effective Governance and Transparency Commission. Under their current format, opportunity areas such as “Vulnerable procedures, services and operations” or “Canales de detección” are neither measurable nor action-oriented. Moreover, the Human Development’s priority opportunity area “Prevent family and community violence” would benefit from being more specific and containing measurable goals.

The Plan has been broken down into too many layers

Practice-based evidence suggests that the Strategic Plan has too many layers. The Strategic Plan has five main layers that break down the vision and aspirations (which are intentions more than objectives), into prioritised opportunity areas, strategic lines, strategic initiatives and strategic projects (see figure 3.3). International good practice recommends that each layer of a development plan should correspond to a level of the policy value chain (see Figure 2.5) (Máttar and Cuervo, 2017[9]). It also suggests that long term strategic planning should be focused on impacts and long-term outcome objectives (Schumann, 2016[7]) along the policy value chain. Figure 2.5 offers a schematic representation of the policy value chain.

Figure 2.5. Policy value chain

Source: Authors

In the case of Nuevo León, this would suggest that prioritised opportunity areas are meant to be long-term outcome/impact level objectives, while strategic lines, initiatives and projects should be respectively output, process and input level objectives. Nevertheless, the Strategic Plan of Nuevo León does not rest on a clear logical framework, as seen in section 3.1. Therefore, it is difficult to identify all opportunity areas to outcome level objectives, or strategic lines to output level objectives.

Fewer layers, and therefore greater clarity, would allow the Plan to be more readily understood and used by the public. This also enables greater adaptability in development planning as inputs and outputs may change depending on fiscal, economic, political and social circumstances, while policy impacts remain more stable in the longer-term. In that sense, the Strategic Plan would benefit from being refocused on the long-term impact/outcome levels, as is common practice in long-term strategic planning. As a result, the Strategic Plan should only retain one of its layers, specifically the priority opportunity areas, which would correspond to long-term outcome level objectives. Output-level objectives, process and inputs, should be reserved for the State Development Plan and, until the achievement of this alignment between both plans, to the action plan (see section 4.3 on the latter).

Opportunity areas have been insufficiently prioritised

The current Strategic Plan for Nuevo León contains prioritised opportunity areas and projects that go beyond the state’s financial capacities, which reduces its credibility and effectiveness as a tool for policy implementation. Good international practices suggest that there should only be a limited number of objectives in order to focus and mobilise resources for their achievement. Conversely, too many objectives will scatter scarce resources and lead to unfocused delivery of policies and reforms (OECD, 2018[2]).

Yet, the Strategic Plan is organised into 11 thematic areas (each one associated with a sub-commission or commission of the council) with 47 opportunity areas, divided into 101 strategic lines and accompanied by 45 projects. The Plan also has eight transversal central themes. A gap analysis shows that at least five opportunity areas of the Strategic Plan remain completely unlinked to objectives of the State Development Plan (see Annex 2.B), suggesting that these opportunity areas have not been costed in the budget of the state administration. This plethora of objectives can reduce the policy impact of the Plan.

As underlined by several key stakeholders during the first OECD fact-finding mission, greater prioritisation will be crucial in rendering the Plan more realistic in light of the state’s limited fiscal and budgetary margins of manoeuvre (Council of Nuevo León, 2017[10]). Prioritisation is necessary to ensuring that the strategy is realistic and can be implemented with the state’s existing resources. It will therefore be important that the plan be thoroughly examined by the Public Finance Commission to ensure credible pathways for implementation in the future, so that resources can be clearly identified.

The coherence between thematic areas can be improved

A closer look at the Plan shows that there are important disparities in the number of prioritised opportunity areas attributed to each commission. For instance, the Human Development Commission monitors 53% (28 of the 47) of the prioritised opportunity areas (for the sub-commissions on Education, Social Development, Health, Art and Culture, Sports, Citizenship, and Citizen’s participation), whilst the commission on Security and Justice is in charge of 9% (5 prioritised opportunity areas).

Because each commission is responsible for the monitoring and evaluation of the opportunity areas that fall under its thematic area, having important disparities in the number and type of prioritised opportunity areas monitored by each commission has made their work more difficult. In particular, the Human Development Commission monitors a large number of prioritised opportunity areas through its sub-commissions, potentially hindering greater internal coordination and homogeneity in the work of the commissions.

The number of layers varies between thematic areas, with some commissions, such as the economic development commission who chose to forgo the strategic lines (only retaining prioritised opportunity areas and strategic initiatives). Moreover, the prioritisation criteria of the opportunity areas might not be clear for all the commissions or sub-commissions. In fact, some commissions developed strategic lines and initiatives for opportunity areas that were not a priority according to the feasibility/impact matrix. This is the case for the sub-commission on Health with the opportunity areas “Acceso y atención inmediata en caso de infarto de miocardio” and “Detección temprana y atención inmediata de diabetes, hipertensión y depresión”. This scenario is also found in the sub-commission on Sport and the commission on Economic Development. This creates confusion about the exact number of priority opportunity areas in each commission and for the Plan over all, when the priority opportunity areas are meant to be the cornerstones of the Strategic Plan.

Given the importance of communicating objectives and priorities in order to ensure political support for the reform, the lack of standardisation between thematic areas may lead to diminished legibility within and outside the administration. The lack of clarity around the priority opportunity areas may also affect the buy-in for the Plan.

There are some inconsistencies in aligning the methodological framework of the Strategic Plan with the SDGs

The council of Nuevo León was mandated to oversee the implementation of the SDGs (Nuevo León Council, 2017[14]). The fact that the timeline of the Strategic Plan (2015-2030) is aligned to that of the 2030 Agenda for Sustainable Development shows the commitment of the council and the state of Nuevo León to pursue this international agenda of social inclusion, poverty reduction, gender equality, environmental sustainability and just and peaceful societies. In fact, 14 of the 17 Sustainable Development Goals are reflected in their substance in one or several opportunity areas of the Plan (see Table 2.1 for an example of this alignment and Annex A for a more detailed analysis of the alignment between the SDGs and the SP).

However, the OECD has found that there is no clear methodological framework to link the Strategic Plan with the SDGs (OECD, 2018[2]). For instance, some SDGs are reflected in a single opportunity area, while others are reflected in several or none at all. This lack of systematic linkage, both in terms of substance (as three SDGs are not reflected in the Plan) and language (the opportunity areas do not use the same key words as the SDGs) will make monitoring the progress of the SDGs in Nuevo León, and how the Strategic Plan contributes to the process, difficult. Moreover, the lack of a clear methodological framework is somewhat reflected in the institutional arrangements, as the exact manner in which each commission is to oversee the implementation of the SDGs relevant for their theme of work is yet to be determined.

There is no clear methodological framework for articulating the elements of the Strategic Plan with the elements of the State Development Plan (SDP)

Strategic planning in the state of Nuevo León rests on a nested hierarchy across levels of government, as the Federal Planning Law of 5 January 1983 suggests that the state’s plans be aligned with the National Development Plan (2013-2018), while the state planning law dictates that the Strategic Plan (2015-2030) and the State Development Plan (2016-2021) be aligned to one another1

In spite of these legal provisions, there is no clear methodological framework to articulate the elements of the Strategic Plan with the elements of the State Development Plan (SDP), as can be seen in Table 2.2. While many of the opportunity areas of the Strategic Plan resonate with the objectives or lines of action of the Development Plan, their alignment is not systematic. Firstly, links between the two Plans do not follow a consistent pattern (for example, the substance and language of prioritised opportunity areas – SP – and objectives – SDP – being coherent). Instead, a detailed analysis of both Plans shows that opportunity areas sometimes find resonance in objectives, strategies or lines of actions indifferently. Conversely, five opportunity areas2 do not find any resonance in the State Development Plan.

Furthermore, the timeline given to opportunity areas and objectives may even be seen as contradictory in some cases. For instance, as it can be observed in Table 2.3, objective 6 of the Human and Social Development theme of the SDP requires the state of Nuevo León to achieve total coverage in education by 2021 (“Alcanzar la cobertura total en materia de educación”), while a prioritised opportunity area of the Strategic Plan only aims to increase coverage in elementary and pre-schools by 2030 (“Incrementar la cobertura en educación inicial y preescolar”).

In order to increase the coherence between the long-term Strategic Plan and the medium-term State Development Plan, Nuevo León could consider aligning the two plans in one single point or layer. For instance, the SDP’s objectives could be explicitly aligned to the SP’s prioritised opportunity areas or even fully harmonised, when relevant, as can be seen for example in Table 2.3.

This practice can be seen clearly in other Mexican states. In Guanajuato, for example, strategic planning involves both horizontal and vertical coordination mechanisms to align the timelines and objectives of all planning instruments, from the national level (with the National Development Plan and the Sustainable Development Goal), to the state level (with the State Development Plan and the State Government Program), as is explored in Box 2.4. In order to make this alignment possible, Nuevo León could consider adopting methodological guidelines for the preparation of the next State Development Plan for 2022-2027, that require a clear theory of change to align the SDP’s objectives and indicators, to that of the Strategic Plan. Until the renewal of the State Development Plan, however, Nuevo León could consider relying on action plans to establish this link, as further explained in the following section.

The Strategic Plan and the State Development Plan can be articulated with an action plan

Although breaking the Strategic Plan’s opportunity areas into strategic lines and initiatives suggests that the council has identified actions to implement their long-term goals, neither strategic lines nor initiatives are directly linked to the use of inputs (human, financial or material resources) with clear responsibility for their implementation. Moreover, there is no clear methodology for designing strategic projects, priority programmes or assessing their progress. As such, the Strategic Plan does not contain a clear action plan for its implementation as is consistent with long-term strategic planning.

International good practice recommends that an action plan be prepared together with the development of any strategy, in order to clarify and identify the inputs and processes that will be used for its implementation (OECD, 2018[2]). In fact, the Strategic Plan itself (chapter 5 “Implementation and monitoring”) suggests that, in order to be implemented, the Plan should be associated with a detailed action plan clarifying deliverables, deadlines, resources and lines of responsibility; an action plan is a means to achieve change.

The development of such an action plan, which is crucial to assessing the feasibility of a Plan, could potentially be the responsibility of the state public administration, as is usually the practice in OECD countries. As such, the action plan would be a list of activities and measures, linked to the use of inputs (human, financial or material resources), that will be mobilised to produce certain outputs (OECD, 2018[2]). This implies that the action plan does not need to propose new actions, but rather explain how, and by when, government activity and resources will achieve the output objectives of the State Development Plan and how they will ultimately contribute to the achievement of the Strategic Plan.

As such, the action plan would serve to detail the implementation pathways for the overlapping objectives/priority opportunities areas of the SDP and the SP. This would facilitate the monitoring of these pathways by the state public administration and their evaluation by the council. Therefore, it would be useful for the council to consider evaluating the implementation of the action plan, in order to collect evidence on how the government is endeavouring to mobilise resources in pursuit of the Strategic Plan’s objectives.

Furthermore, as an action plan can easily be updated, it would enhance the adaptability of the Strategic Plan to political and economic developments. This would therefore address another concern raised by several stakeholders, namely that the implementation of the Plan’s long-term goals has been impacted by short-term political circumstances (budgetary restrictions, changes in the political agenda).

Put differently, devising an action plan – in conjunction with the alignment of the Strategic Plan and the State Development Plan – would allow Nuevo León to ensure that its actions and priorities across the different analysis and time horizons are harmonious (see Table 2.4). In particular, the action plan, would enable short-term decision-making in Nuevo León (for e.g. executive actions) to reflect the priorities of its long and medium-term planning instruments.

The articulation of the Strategic Plan and the State Development Plan with an action plan can support a coherent whole-of-government framework to manage strategic planning and development priorities in Nuevo León. In this regard, OECD country experiences are quite instructive. For example, as detailed in Box 2.5, Poland’s national development management framework is a good case study for eliminating redundancies and ensuring coherence between instruments across the different analysis horizons.

A clear need to link strategic planning with budgeting

In addition to the aforementioned planning instruments, the state budget is a vital consideration for identifying pathways for implementation, as well as ensuring policy coherence. First, since the implementation of a strategy relies on the proper calculation of the required resources, as well as appropriate budgeting and allocation of such resources, the strategic objectives should be well-reflected in annual and medium-term budgeting documents (Vági and Rimkute, 2018[18]). Second, as per OECD recommendations, budgeting processes ought to be governed by principles like performance-based budgeting. Integrating these principles with strategic planning instruments (and their initiatives) is crucial for the mainstreaming of these practices, and thus, ensuring policy coherence across government.

The 2015 OECD Recommendation on Budgetary Governance (see Box 2.6) indicates that budgets should be closely aligned with the medium-term strategic priorities of government. Structuring and organising budget allocations with medium-term considerations in mind ensures that the budget extends beyond the traditional annual cycle (OECD, 2018[19]). Thus, effective medium-term budgeting helps create clearer links between budgets, plans and policies, and is a vital part of reducing uncertainty for policy-making (OECD, 2018[19]). Notably, medium-term budgeting can promote the following:

• greater assurance to policy planners about multi-year availability of resources

• identification of appropriate medium-term goals against which resources should be aligned (OECD, 2018[19]).

In Nuevo León, public expenditure is governed by the Expenditures Law for the State of Nuevo León (Ley de Egresos del Estado de Nuevo León). This legal document aims to regulate the allocation, execution, control and evaluation of public spending on an annual basis (OECD, 2018[21]). The 2020 Expenditures Law was signed into effect on December 20, 2019. Furthermore, the Law for the Financial Management of the State of Nuevo León (Ley de Administración Financiera para el Estado de Nuevo León) regulates financial management and financial planning of state and parastatal entities in Nuevo León (OECD, 2018[21]).

The link between government expenditure and strategic planning in Nuevo León is governed by article 3.XIV of the Strategic Planning Law, which dictates that strategic planning shall be based on, among other factors, the link with the expenditure budget so that government expenditure is related to the fulfilment of the Strategic Plan and the State Plan. To do so, article 28 of the regulations of the Strategic Planning Law declares that annual public expenditure should be linked to strategic planning using a programmatic budgetary structure. This necessitates the inclusion of classification categories that explicitly link the instruments of the strategic planning process (understood to be both the Strategic Plan and the State Development Plan as per article 15 of the regulations of the Strategic Planning Law) with public resources.

In practice, budgetary programmes follow a classification framework that specifies their relationship to the State Development Plan; this framework does not map each budget programme to a component of the Strategic Plan (see Figure 2.7). Whilst it is often challenging for long-term plans to contain precise budgetary envelopes as they focus on the end of the policy-value chain (OECD, 2018[2]), and while it is not necessarily wrong that in a specific year a long-term objective is not explicitly financed, the conceptual framework linking objectives to the budgetary programmes should be clearer.

Furthermore, article 25 of the regulations of the Strategic Planning Law states that entities of the state public administration must prepare annual operational programmes. These programmes serve as the basis of the preliminary draft of the annual budget for each entity. They contain the activities to be carried out during the year by the state public administration to achieve the objectives of the State Development Plan, as well as sectoral, special programmes (Article 21 of the regulations of the Strategic Planning Law). It is clear, however, that these operational programmes are not currently mapped to the objectives of the Strategic Plan.

Figure 2.7. Classification code components of budgetary programmes

Note: CONAC stands for Consejo Nacional de Armonization Contable

Source: OECD questionnaire I (2019[22]).

Performance budgeting is in its very early stages in Nuevo León

Performance budgeting is defined as “the systematic use of performance information to inform budget decisions, either as a direct input to budget allocation decisions or as contextual information to inform budget planning, and to instil greater transparency and accountability throughout the budget process, by providing information to legislators and the public on the purposes of spending and the results achieved” (OECD, 2018[23]). This concept is ingrained in the 2015 Recommendation on Budgetary Governance (Principle 8, see Box 2.7), which states that countries should “ensure that performance, evaluation and value for money are integral to the budget process.”

In Mexico, performance-based budgeting was introduced in 2006, through the Fiscal Responsibility Law, which outlined the gradual implementation of a performance-based budgeting system (Presupuesto basado en Resultados, PbR), aimed at defining, for each budgetary programme, clear objectives to be achieved. In 2007, this system was also complemented by a system of monitoring and evaluation of the social impact of programmes (Sistema de Evalución del Desempeño, SED). The federal performance-based budgeting system was also extended to the state level in 2008. See Box 2.8 for more information on the performance-based budgeting system in Mexico.

In Nuevo León, performance-based budgeting is reflected in several normative instruments. Specifically, the executive branch of the state of Nuevo León issued the General Guidelines for the Consolidation of Results-Based Budget and the Performance Evaluation System in 2017. The intent of these guidelines is to institutionalise a results-based budgeting system with tools such as performance indicators linked to budgetary programmes, logical framework methodology to organise objectives in a causal way, etc.

The concept of performance-based budgeting is reflected in the strategic planning instruments of Nuevo León, notably the State Development Plan. To that end, article 16 of the Strategic Planning Law defines the State Development Plan as not only a medium-term planning instrument, but also a source of guidance on results-based management and results-based budgeting. The State Development Plan is also cited in the General Guidelines for the Consolidation of Results-Based Budget and the Performance Evaluation System. In fact, the preamble of the guidelines recalls theme 2 of the State Development Plan, Effective and Efficient Government, which notes the need to implement innovative mechanisms to ensure that services are provided with high quality standards, in the shortest time and with the least amount of resources possible.

Furthermore, the Strategic Planning Law also alludes to a performance budgeting approach in the evaluation of the State Development Plan and the Strategic Plan. In particular, the Law mandates that an annual report be sent to the state congress that assesses the relationship between public expenditure and the impact on economic and social development indicators pertaining to the objectives of both the State Development and the Strategic Plan (Article 26).

However, in practice, implementing performance-based budgeting to produce evidence on how the state’s funds contribute to achieving policy goals set out in the Strategic Plan (as well as the State Development Plan) is currently infeasible. In addition to the absence of classification codes connecting budgetary programmes with the objectives of the Strategic Plan, the performance indicators used in the General Guidelines for the Consolidation of Results-Based Budget and the Performance Evaluation System are not necessarily the same as the indicators identified in the State Development Plan and the Strategic Plan. In fact, the latest 2020 comparative data on Mexican states shows that Nuevo León went from being below to above the national average in the implementation of a performance-based budgeting system3

The implementation of the Strategic Plan is also constrained by historic fiscal limitations of subnational governments

Linking the budget to strategic planning may also be hindered by the limited budgetary autonomy of subnational governments (SNG). According to OECD literature, this limited autonomy can be explained by three main factors. Firstly, subnational governments have a smaller revenue base and a high reliance on transfers from central governments; this is compounded by the fact that SNGs have less autonomy in changing tax rates or tax bases. Secondly, a substantial share of SNG expenditure is mandatory under federal regulations. Finally, SNGs are constrained by more stringent fiscal rules; they have less flexibility in using debt to adjust their budgets. As such, any decrease in their revenue base is followed by a decrease in expenditure (OECD, 2015[25]).

Whilst it is often challenging for long-term plans to contain precise budgetary envelopes as they focus on the end of the policy-value chain (Máttar and Cuervo, 2017[9]), and while it is not necessarily wrong that in a specific year a long-term objective is not explicitly financed, the conceptual framework linking objectives to the budgetary programmes should be clearer. In the case of the Strategic Plan, prioritised opportunity areas / strategic objectives can be clearly linked to the budget through the State Development Plan), when relevant.