Institutional capacity for results-based public administration improves in Latin America but deficiencies persist

Washington, June 10, 2015.- Latin America and the Caribbean have improved the institutional capacity of their public administration in areas ranging from budget programming and execution to planning capacities, according to a new study published by the Inter-American Development Bank (IDB). However, the report also underscored important weaknesses especially in monitoring and evaluating public projects and programs.

The conclusions are based on an index that aims to measure the capacity of the public sectors in Latin American and the Caribbean to implement a Management for Development Results (MfDR). The MfDR is a management tool that seeks to optimize the creation of public value, the achievement of government objectives and the continuous improvement of institutions.

The index, focused on a results-based public administration, examines five key parts of public policy administration: planning, budgeting, financial management, administration of programs and projects, and monitoring and evaluation. The results were published in a book titled “Building Effective Governments: Achievements and Challenges for Results-Based Public Administration in Latin America and the Caribbean.” (Construyendo Gobiernos Efectivos: Logros y retos de la Gestión Pública para Resultados en América Latina y el Caribe).

The average MfDR index for the 24 countries in the region that participated in the study rose from 2.0 points out of 5 in 2007 to 2.4 points in 2013. The area with the best evaluation was the public financial administration, at 2.9 points. The lowest were budgeting by results and monitoring and evaluation, both with 1.9 points.

Brazil, Chile, Colombia and Mexico registered the highest levels of development in their capabilities to implement MfDR, with 3 or higher points in 2007 and in 2013. Eighteen countries were in the middle group –between 1.5 and 3 points– and two countries had low scores, less than 1.5 points.

“The study focuses on the institutional capacities of the countries to implement an efficient, effective and transparent public administration,” said Carlos Santiso, chief of the Institutional Capacity of the State division at the IDB. “A results-based public administration is not an academic exercise. It is a critical issue for the ability of our public institutions to respond to the growing demands of citizens”.

In general, all countries improved their performance, although by different amounts. Those whose institutional development lagged, including Jamaica, Nicaragua and Paraguay, are taking significant steps to improve their national public administration systems. Countries such as Ecuador, Peru, Dominican Republic and Uruguay rank in the middle of the institutional development index but have undertaken major reforms, enabling them to register significant improvements.

The countries recorded the biggest progress in the area of planning. On the strategic side, for example, 19 countries had medium-term national plans in place in 2013, although their quality was uneven. The operational side of planning has tended to improve by including indicators and goals. There’s more need for improvement in getting more actors involved in planning, in many cases including the legislative branch.

In the area of results-based budgeting, there has been more transparency in budgets and an expanded use of programming of revenues and expenses in the medium term. There are shortcomings in the use of instruments to analyze and promote the effectiveness and quality of expenditures.

The area of public financial administration saw more countries using instruments to mitigate fiscal risks, and there's been a strengthening of the legal and institutional framework for public acquisitions and contracts – although more countries need to establish electronic systems for public purchases.

Results were mixed in the area of program and project management. There was progress in the development of long-term sectoral plans, but a low level of capacity to implement the plans, meet the objectives, reach the goals and gather the information required to carry out an adequate monitoring of their execution.

In the area of monitoring and evaluation, there were advances in the generation of statistics, although few of the countries (four out of 24) had mature systems for monitoring, development and evaluation.

The study concludes with a set of recommendations on how to continue strengthening the focus on achieving results throughout the entire cycle of the administration of public policies in Latin America and the Caribbean.