Digital Treasury Reform and Fiscal Efficiency

This paper evaluates the impact of Costa Rica’s adoption of SUPRES, a digital treasury platform that centralizes and automates cash transfer payments for social assistance programs. While most GovTech literature has focused on service delivery improvements, the effects of digitalization on treasury operations remain largely unexplored. Addressing this gap, we provide an empirical assessment of how GovTech reforms support treasury efficiency by improving cash management and reducing opportunity costs of borrowing for treasury. Using administrative data and survey evidence, this analysis finds that average lead times for the analyzed social cash programs fell with the adoption of SUPRES - from 9–13 days before the reform to 2-3 days after-, generating estimated opportunity cost savings for the Treasury exceeding USD 4 million, at a relatively low implementation cost, highlighting the strong value-for-money of this reform. In 2020, the pre-SUPRES opportunity cost was about 1.1% of total domestic short-term interest payments, underscoring the importance of digital treasury reforms for managing liquidity. Although the savings are modest compared to GDP, they are significant for treasury operations, especially during tight cash periods. Survey responses from administrative staff indicate enhanced operational efficiency, transparency, and inter-institutional coordination following SUPRES adoption. Beyond treasury efficiency gains, the reform also strengthens targeting, expands financial inclusion, and supports the diversification and resilience of the social payments ecosystem by enabling a multi‑bank payment model. Overall, the analysis shows how relatively low‑cost digital treasury reforms can deliver meaningful efficiency gains in cash management while generating broader operational and financial inclusion benefits.