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Latin America & Caribbean

South Africa

gac in latin america & caribbean

Rebuilding Trust in the State

The LCR Region brought together in February Bank management and staff from within and outside the region, across sectors, country offices and central departments to discuss LCR’s approach paper on good governance in the region and draw lessons from the rich diversity of experience within the Bank.
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about gac in latin america & caribbean

In contributing to improvements in governance, Bank approaches must address two distinctive challenges that are present in the region and the effectiveness of the Bank's engagement is constantly tested.

Most of the countries are middle income with, at least pre-crisis, little fiscal pressure to borrow, and increasing political self-confidence and assertiveness in connection with issues of global recognition.

With some striking exceptions, the region’s public sectors are broadly typified as having poor service provision, limited redistribution, low citizen engagement and low trust. Citizens and firms often avoid contact with the state, and particularly in lower income countries, have comparatively little trust in its competence.

While corruption is doubtless a significant contributor to the limited confidence that citizens have in the public sector, inefficiency and regressive spending policies are also a major factor. The result is that governments find it difficult to justify raising revenues beyond their current rather low levels since citizens and firms are skeptical that they will be used for positive social or economic results.

Against this backdrop, the pilot CGACs (Guatemala, Honduras, Paraguay and Peru) provided an opportunity to test approaches for working and remaining engaged in challenging circumstances. They provided some clues about the "how" and the "what" of working with governments to improve governance in the Region.




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