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Latin American Discussion Papers on Public Management

Discussion Papers on Public Management

Paper #6 - Studying the Use of Public Sector Boards for Enhancing Ministry-Agency Coordination and Agencies’ Performance in Selected OECD Countries.

In order to increase the efficiency of the public sector, as well as to benefit responsibility and accountability, many governments around the world have favored, with different historical trajectories, the separation of policy design and implementation in different organizations. The result has been the separation of policy design in relatively small ministries, with implementation through a separate agency. Freeing agency‟s service delivery and policy implementation from political intervention and policy development, however, gives rise to a challenge for the parent departments, ministries, or other political authorities in charge of the agency: how to make sure that agency managers set the right targets, and how to monitor their performance.

OECD countries have tried different ways of enhancing coordination between ministries and agencies. One of the structural instruments is the use of public sector boards. These governance or advisory boards strengthen control and accountability over public sector agencies by bridging the information gap between busy and not necessarily technical expert political authorities at the ministries and the public sector managers leading the agencies. This paper aims to fill a gap in the existing public management literature by studying the use of public sector boards with the objective of enhancing coordination between ministries and agencies, and improving agency performance in selected OECD countries.

Paper #5 - Towards a Fiscal Pact: The Political Economy of Decentralization in Bolivia.

The decentralization game in Bolivia has been altered quite significantly with the presence of new bargainers at the departmental level. Two, opposing groups have emerged and which follow intricate strategies to enforce their claims. The highland departments are strongly aligned to the MAS party and the charismatic leadership of the country’s first indigenous leader Evo Morales. The Media Luna departments in the lowlands demand autonomy and seek a greater share of the national pool of hydrocarbon revenue.

The paper discusses how a Fiscal Pact can be forged to bring agreement around the most pressing issues. It considers several bargaining packages which could be crafted and analyzes the extent to which decentralization principles need to be sacrificed in order to achieve agreement among competing actors. It is likely that these agreements may eliminate some inefficiencies, but also create others. An important insight is that the Fiscal Pact should be renegotiated at certain pre-defined times, in order to provide flexibility and adjust to the constraints of actors to engage in inter-temporal commitments. Explicit exit options would enhance the possibilities for agreement.

Paper #4 - Executive-Legislative authority over public servants' pay: Lessons from Paraguay. 

This paper reviews the impact of the distinctive ability of Congress in Paraguay to determine public sector pay levels. Pay determination in Paraguay seems likely to have a dual impact on the ability of managers to motivate staff and implement programs effectively.  On the fiscal side it creates the circumstances which require ad hoc under-execution of the budget, a form of unpredictability that reduces effectiveness.  On the human resources management side, it seems to generate a de facto pay policy in which pay does not motivate as it is unlikely to be generally regarded as fair.

In Paraguay, as Congressional involvement will not be reduced in the short term, one possible approach is to introduce, gradually, a variant on a "Single Pay Spine" model in which the relativities between different posts and occupational streams can be assessed and reviewed – and, crucially, where the fiscal impact of an aggregate pay increase can be readily assessed and, potentially, incorporated into a more formal process in which the fiscal space for salary increases is set by the Ministry of Finance at the start of the budget process. Conclusions drawn from this single case cannot be generalized and do not intend to be useful for any country with Congressional involvement in pay determination. However, looking at this extreme outlier can be instructive as there are implications for public management reforms in Paraguay and for public sector management data collection.

Paper #3 -
 Performance-Informed Budgeting in Latin America Experiences and Opportunities.

Governments around the world are having to adjust institutions, including their budget systems, to operate in a more global, market-orientated environment. For many OECD, and increasingly for emerging market countries, including those in Latin America, this incorporates the move toward performance-informed budgeting, i.e. systematically incorporating nonfinancial performance information into budgetary decision-making and allocation processes.

This paper firstly distinguishes how performance-informed budgeting differs from traditional budget systems through: the explicit, and greater, focus on the results of public program objectives; institutional arrangements that seek to promote a performance culture through a network of structured performance agreements; and the emphasis on holding senior officials accountable for deliverables, often in return for greater delegation of authority. The paper then provides a framework for analyzing the potential roles of key decision-makers and institutions that create this network of structured performance agreements throughout budget cycle. The framework is applied in four selected Latin American countries to highlight the progress made so far and also to identify possible opportunities for deepening the reforms. Lastly, the paper offers some suggestions with regard to the broader public sector reforms that are necessary to support performance-informed budgeting, particularly in the Latin American context.

Paper #2 - Public Management Reforms and Property Tax Revenue Improvements: Lessons from Buenos Aires. 

Property taxes in Buenos Aires represent a concern from both a fiscal perspective and an equity perspective. From a fiscal perspective, the weight of property taxes in Buenos Aires has been decreasing steadily over the last seven years, due to the existing property assessment process. Apart from reducing potential government expenditures, the significant reduction in property tax revenue adds to the regressive nature of the overall tax structure: as property ownership tends to be heavily concentrated among the wealthy in developing countries and often income tax is either very difficult to collect, or does not exist, property taxes are often seen as a vehicle that contributes to vertical equity. From an equity perspective, the distortions generated by the current system have created serious inequities and represent a very important concern for the citizens of Buenos Aires and their local authorities.

This paper recommends options for improvements to property tax revenue in the city of Buenos Aires, focusing on management reforms based on international experiences, and provides potential lessons for other local governments in Latin America.


Paper #1 - Review of the Policy Utility of the Worldwide Governance Indicators for the Countries of Central America.

Conditions for good governance in Central America have improved considerably over the last ten years. New governments have prioritized good governance and reinforced the reform processes. However, there are particular governance concerns for Guatemala where the consolidation of democracy is still fragile and problems related to the impoverished indigenous population remain largely unsolved. Nicaragua and Honduras also continue to face important governance challenges. The World Governance Indicators (WGI) data shows little advance in the quality of governance for the Central American countries. The average percentile rank for the Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) continues to be below the Latin American regional average.



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