Governance for sustainable poverty reduction: The social fund in Nicaragua

Like other social funds, the Nicaraguan Emergency Social Investment Fund (FISE) has been created on the initiative of the donors to alleviate the social consequences of adjustment policies. It finances small infrastructural projects in education, health, water and other sectors and focuses on poor communities. FISE accounts for approximately 11% of public investment and 48% of public investment in the social sectors. The size of FISE and its apparent permanent character raise questions of its contribution to sustainable poverty reduction and on institutional development in the country. The article concludes that there are serious doubts on whether maintaining a social fund as a separate agency enhances effective governance for sustainable poverty reduction.

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