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Public Sector Brief
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THE PUBLIC SECTOR IN LATIN AMERICA AND THE CARIBBEAN
Throughout Latin America and the Caribbean (LAC), citizens are demanding more efficiency, accountability and honesty from government.
Objective studies confirm the view that the region's institutions have been lagging behind those in other regions. A World Bank analysis found that LAC scored lower in the 1980s and 1990s than all regions except sub-Saharan Africa on an index of institutional strength based on perceived quality of service, corruption, the enforceability of contracts and other indicators.
Among citizens, surveys throughout the Americas show that skepticism concerning the honesty of public officials runs deep. According to results collected by Transparency International, 71 percent of citizens in Chile saw corruption as worsening. Among Peruvians, 75 percent also thought corruption would remain.
But citizens are increasingly unwilling to accept the status quo. Thanks to democratic reforms of the past two decades, the public is making its discontent felt at the ballot box.
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THE WORLD BANK'S WORK IN PUBLIC SECTOR REFORM IN THE LATIN AMERICA & CARIBBEAN REGION
As governments respond to the pressure, the World Bank is increasingly a part of efforts to improve institutions and of creating better ways in which citizens can interact with government.
Traditionally, public sector improvement was a matter for governments themselves. But years of work in development projects have made it clear that the scale of a country's economic growth, and the extent to which it can be sustained, depend largely on the quality of public institutions. For instance, citizens of a country whose laws and courts can't be counted on to protect investors will find that loan interest rates are high, to compensate for the added risk. Consequently, business activity is lower than what is needed to generate more jobs. |
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Issues of integrity aside, inefficiency in basic government operations such as maintaining roads, providing or regulating electricity and water service, and administering public hospitals and clinics has effects beyond impairing the quality of life of citizens. Such deficiencies also add to the costs of doing business, thereby acting as a brake on economic development. Consequently, expansion of anti-poverty programs are hurt as well. Raising the standards of governance is essential to meeting Millennium Development Goals, whose target year is 2015.
Examples of recent projects by the Bank's Public Sector Group include:
- Support for design of government financial management systems in Bolivia, Colombia, Ecuador, Guatemala and Honduras which provide real-time data on all recorded financial transactions, new procurement procedures that save money on purchases, and decentralized spending control that allowed for major improvements in social sector projects.
- Aid in the design and launching of an electronic tax-payment system for Guatemala that processed approximately 95 percent of tax revenues.
Assistance to the four key justice sector institutions of Peru- the Supreme Court, the Ministry of Justice, the Judicial Council and the Judicial Academy- to provide a comprehensive approach to refom, including support to formal and traditional authorities. This includes assisting in the training of justice of the peace (jueces de paz) and magistrates, increasing access for by women and vulnerable communities and improving court administration.
Goals of other projects include: upgrading or creating financial management systems; strengthening the capabilities of regional and municipal governments, the units of government that citizens deal with most frequently; and reforming judicial systems, a frequent target of public criticism.
Projects are designed to deliver practical solutions within a short time span. But comprehensive reform will be a long-term process. Even so, the LAC countries are moving faster than the industrialized countries once did. There, the counterparts to the public sector modernization programs now under way in the Americas took decades if not centuries. In recognition of that imbalance, the Bank's strategy emphasizes working closely with countries and citizens, respecting the legitimacy of national models and histories – and acknowledging that changing laws is less important than enforcing them fairly and fully.
Citizens are increasingly aware of the relationship between governance and their own well-being. The Bank is committed to aiding in the design of systems and procedures. |
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For more information on World Bank support to the reform of the public sector in Latin America and the Caribbean, visit:
http://www.worldbank.org/lacpublicsector Updated April, 2006 |
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