Public Expenditure in Latin America: Trends and Key Policy Issues
IMF Working Papers, February 1, 2007
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Bibliographic details
- Authors: Benedict J. Clements, Christopher Faircloth, Marijn Verhoeven
- Published: February 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451865851.001
Overview
- Examines trends in government spending in Latin America from the mid-1990s to 2006.
- Focus areas: the cyclicality of spending, public investment, public employment, and social expenditures.
Key findings
- Primary expenditures have trended upward for the past ten years as a share of GDP.
- The upward trend was driven by increases in current spending, in particular for social expenditures.
- Fluctuations in real spending have continued to follow a procyclical pattern.
- There is substantial scope to improve the efficiency of:
- public investment,
- public employment,
- social spending.
Policy issues examined
- Cyclicality of spending: patterns and implications for stabilization and fiscal policy.
- Public investment: quality and efficiency concerns.
- Public employment: composition and cost-efficiency considerations.
- Social expenditures: drivers of spending growth and efficiency of outcomes.
Implications and recommendations (as derived from the paper's analysis)
- Strengthen mechanisms to reduce procyclicality of real spending to improve fiscal stabilization.
- Improve the efficiency of public investment to enhance returns on capital spending.
- Reform public employment structures to raise efficiency and contain recurrent costs.
- Enhance efficiency of social spending to better target outcomes while containing fiscal pressures.
Source: Public Expenditure in Latin America: Trends and Key Policy Issues
Content in this bundle
- _wp0721 — Government Effectiveness