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Criticism of the capacity of the state to deliver quality services has become widespread,
generating cynicism and undermining trust in government. Too often, governments
overpromise and underdeliver, faced with increasingly complex problems and citizens
pent-up expectations. Reinventing the state is about restoring trust in the governments
ability to deliver better public services; it is about leaner and smarter government capable
of bridging the gap of expectations between citizens demands and governments
capacity. This, in turn, calls for a rethinking of how government and citizens interact in a
digital age. Achieving good governance requires the right mix of legitimacy, that is,
being responsive and accountable to citizens; capacity, that is, the ability to get things
done; and autonomy, that is, protection from political meddling. There is thus renewed
interest in how to measure and strengthen state capacity, govern-ment effectiveness, and
democratic accountability.
How to close this gap in Latin America and the Caribbean? While the region has made
important progress in anchoring fiscal responsibility in the past decade, the quality of
public spending and service delivery has lagged behind. The rise of the middle class has
raised both expectations for better services and citizens ability to demand them, reflected
in the protests in Santiago or Sao Paulo. This expectations gap is rooted in the gap
between the policies adopted and their actual implementation, which, in turn, is due to
dysfunctions in the machinery of government, especially at the municipal level.
Admittedly, the size of government remains small in the region. Government spending
represented 28% of gross domestic product in 2011, compared to 45% in the
Organisation for Economic Co-operation and Development (OECD), according to a
recent study by the Inter-American Development Bank (IDB) and the OECD, but its
perfor-mance and delivery capacity are disappointing.
There are three key dimensions to getting government right. We must increase the
capacity of executives to steer government, improve efficiency in service delivery, and
apply new technologies to make government more open and accountable.
COMMENTARY
An effective government is one that achieves results that respond to the needs of its
citizens and is accountable to them. It manages by and for results and makes decisions
based on credible data and robust evidence. The strategic management of the state
requires agile centers of government able to steer, coordinate, and regu-late public
policies. It also requires the ability to plan and budget strategically, managing public
spending effectively using robust information management systems, and monitoring and
evaluating the impact of public service delivery, as Mario Marcel, Marcela Guzmn, and
Mario Sangins note in a recent IDB study on budgeting for development in Latin
America.
Where to start? There are two crucial areas: improve the capacity of the executive to steer
government and put statistics at the forefront of policy design. An effective state requires
a strong strategic corenot a strong state. The strategic center of governmenttypically
the presidencies and prime ministers officeswhile politically strong remains
technically weak with insufficient steering capacity, as noted in a recent IDB report by
Martin Alessandro, Mariano Lafuente, and Carlos Santiso on governing to deliver in
2014. Several countries in the region have made important strides in the past few years to
strengthen their center of govern-ment. In 2010, Chile established a delivery unit in the
Ministry of the Presidency to track progress in the governments key goals. Colombia
introduced significant reforms to the office of the presidency in 2014 to improve delivery
and policy coordination. In 2013, Paraguay established a center of government to
strengthen its capacities to plan, coordinate, and monitor the implementation of priority
initiatives. Ecuador and Honduras have created coordinating ministries respon-sible for
harmonizing policies.
Effective governments require strong executive capacity supported with better statistical
capacity using statistical information and empirical evidence in the making,
implementation, and evaluation of policies. Better data and stronger evidence augment
public policies chances of impact. However, government statistics are not sufficiently
used to inform policy choices, and government programs are seldom evaluated
rigorously, the statistical institute often remain-ing a peripheral and weak government
agency. Nevertheless, some countries such as Mexico are investing in their statistical
capacity, granting greater autonomy to its statistical agency. At the subnational level, in
Brazil, the state of Minas Gerais launched a data-based third shock of management,
while the state of Pernambuco developed a data-driven management model based on performance targets.
An efficient government is one that reduces the costs for citizens in their interac-tions
with the public sector, achieves value for money in public spending, and delivers services
of a given quality at lower cost. Efficient governments require closing the digital divide
and expanding e-solutions by leveraging the use of information technologies in an
increasingly young and connected society. This also entails improving the quality of
regulations and simplifying bureaucracy. However, bureaucracies are run by people, who
need to be motivated to perform,
COMMENTARY
3
committed to the public good and servicing all citizens. Competent and clean civil
services are the bedrock of good government, yet fostering a technically competent and
fiscally sustainable civil service is the greatest challenge of all. We often talk of bloated
bureaucracies, but public employment accounts for about 11% of the labor force in Latin
America, compared to an OECD average of 15%.
Promoting efficient government requires two critical things: professionalizing the senior
civil service and preventing the politicization of the bureaucracy, and sim-plifying
bureaucratic processes and cutting red tape. While these are probably some of the most
difficult challenges for Latin America and the Caribbean, a recent Inter-American
Development Bank report by Juan Carlos Cortzar, Mariano Latuente, and Mario
Sangins assessing a decade of reform shows that civil service reforms are possible and
progress has been made in the region, with a group of countries such as Paraguay and
Peru moving from a low baseline to a significantly higher performance, while other
countries with more developed civil services showed some stagnation. True, governments
need to manage the fiscal sustainability of the wage bill, but it is as important is
improving pay policy to attract, retain, and motivate skilled staff. It is not about
downsizing the state but right-sizing it.
Cutting red tape will also go a long way to simplify peoples lives when dealing with
administrative procedures. Here, technological innovations can help rational-ize
administrative processes and improve the management of information. Many
governments, such as Panama, as well as subnational governments such as Colima in
Mexico, are leveraging technologies to make government work better for citi-zens.
Uruguay leads the way and, according to the United Nations 2014 global index of egovernment, now ranks 26 in the world.
An open government is one that is transparent, acts with integrity, and prevents
corruption. In the digital age of open data, the management of information is critical to
prevent corruption and improve management. The generation, use, and access to
information are powerful drivers for modernizing government but also holding it to
account. Governments must adapt to and anticipate these tectonic changes in society.
Open governments leverage information and communication technologies to broaden and
deepen accountability.
Two priorities to foster open government are to strengthen accountability institu-tions
and integrity systems, and to implement targeted transparency policies. Strengthening
audit agencies is a defining challenge for the region and a key mechanism both for
holding governments accountable for results and for improv-ing the quality of public
management. Furthermore, targeted approaches to enhance the use of information by
citizens and companies in high-potential but also high-risk sectors such as the extractive
industries have great potential to prevent the resources curse, as Juan Cruz Vieyra and
Malaika Masson show in a recent IDB study in the cases of Colombia and Trinidad and
Tobago. The gen-eration of quality data, greater access to information, and the effective
use of evidence has been a key driver to these developments. Information is the new oil
for better government.
COMMENTARY
Carlos Santiso is the Division Chief of the Institutional Capacity of the State Division of
the Inter-American Development Bank. This commentary is based on Carlos Santiso,
Jorge von Horoch, and Juan Cruz Vieyra, Improving Lives through Better Government:
Towards Effective, Efficient and Open Government in Latin America and the Caribbean
(Washington, DC: Inter-American Develop-ment Bank, Technical Note, 2014).
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