With the aim of guiding the work agenda on improving public health expenditure efficiency in the ... more With the aim of guiding the work agenda on improving public health expenditure efficiency in the LAC region, the Inter-American Development Bank held a workshop entitled “Public Expenditure Efficiency and Outcomes: Application to Health, Challenges and Opportunities for Improvements in Latin America and the Caribbean” in March 2016. This document presents key discussions from the workshop, which brought together professionals in public financial management and healthcare. It focuses on understanding and measuring both technical and allocative efficiency, identifying measurable indicators of inputs and outputs under policymakers’ control, and highlighting challenges and opportunities for improvement, as well as potential priority policy areas in Latin America and the Caribbean.
There is scant empirical economic research regarding the way that Latin American governments effi... more There is scant empirical economic research regarding the way that Latin American governments efficiently allocate their spending across different functions to achieve higher growth. While most papers restrict their analysis to the size of government, much less is known about the composition of spending and its implications for long-term growth. This paper sheds light on how allocating expenditures to investment in quality human and physical capital, and avoiding waste on inefficient expenditures, enhance growth in Latin America. This paper uses a novel dataset on physical and human capital and detailed public spending that includes -for the first time- Latin American countries, which is categorized by a cross-classification that provides the breakdown of government expenditure, both, by economic and by functional heads. The database covers 42 countries of the OECD and LAC between 1985 and 2017. There are five main results. First, the estimated growth equations show significant positive effects of the factors of production on growth and plausible convergence rates (about 2 percent). The estimated effect of the physical investment rate is positive and significant with a long-run elasticity of 1.2. Second, while the addition of years of education as a proxy for human capital tends to have no effect on growth, the addition of a new variable that measures quality-adjusted years of schooling as a proxy for human capital turns out to have a positive and significant effect across all specifications with a long-run elasticity of 1.1. However, if public spending on education (excluding infrastructure spending) is added to the factor specification, growth is not affected. This is mainly because, once quality is considered, spending more on teacher salaries has no effect on student outcomes. Therefore, the key is to increase quality, not just school performance or education spending. Third, both physical and human capital are equally important for growth: the effect of increasing one standard deviation of physical capital or human capital statistically has the same impact on economic growth. Fourth, increasing public investment spending (holding public spending constant) is positive and significant for growth (a 1% increase in public investment would increase the long-term GDP per capita by about 0.3 percent), in addition to the effect of the private investment rate. However, the effect of public spending on payroll, pensions and subsidies does not contribute to economic growth. Fifth, the overall effect of the size of public spending on economic growth is negative in most specifications. An increase in the size of government by about 1 percentage point would decrease 4.1 percent the long-run GDP per capita, but the more effective the government is, the less harmful the size of government is for long-term growth.
Between 2003 and 2009, Argentina’s social spending as a share of gross domestic product increased... more Between 2003 and 2009, Argentina’s social spending as a share of gross domestic product increased by 7.6 percentage points. Benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009, primarily due to the introduction of a new noncontributory pension program—known as the pension moratorium—in 2004. The redistributive impact of the expansion of public spending on education and health was also sizable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.
This paper presents projections for 18 Latin America and Caribbean countries of pensions and heal... more This paper presents projections for 18 Latin America and Caribbean countries of pensions and health expenditures over the next 50 years, compares them to advanced countries, and calculates estimates of the fiscal gap due to aging. The exercise is crucial since life expectancy is increasing and fertility rates are declining in virtually all advanced countries and many developing countries, but more so in Latin America and the Caribbean. While the populations of many of the regions countries are still relatively young, they are aging more rapidly than those in more developed countries. The fiscal implications of these demographic trends are severe. The paper proposes policy and institutional reforms that could begin to be implemented immediately and that could help moderate these trends in light of relevant international experience to date. It suggests that LAC countries need to include an intertemporal numerical fiscal limit or rule to the continuous increase in aging spending while covering the needs of the more vulnerable. They should consider also complementing public pensions with voluntary contribution mechanisms supported by tax incentives, such as those used in Australia, New Zealand (Kiwi Saver), and the United States (401k). In addition, LAC countries face an urgent challenge in curbing the growth of health care costs, while improving the quality of care. Efforts should focus on improving both the allocative and the technical efficiency of public health spending.
Latin American and Caribbean countries have made efforts to ensure that fiscal policies do not ca... more Latin American and Caribbean countries have made efforts to ensure that fiscal policies do not cause biases toward women. However, depending on where the tax burden falls, taxes do create gender biases. This technical note has two purposes. First, it provides evidence of how womens economic participation, care responsibilities, and consumption patterns enter into a countrys tax systems, generating invisible biases. Second, it summarizes the main lessons learned through cross-country comparisons that analyze the impact of direct and indirect taxes on gender equality, the progressivity of the tax systems using both income and expenditure as welfare measures, and the impact of tax systems and tax reforms on households depending on their composition and across the income distribution. The note also provides policy recommendations and good practices that will add to the regions efforts to strengthen fiscal policy taking a gender perspective into account. There is no unique approach to ac...
Frente a beneficios previsionales de los regímenes de capitalización en niveles mucho más bajos q... more Frente a beneficios previsionales de los regímenes de capitalización en niveles mucho más bajos que los previstos, los gobiernos de la región de América Latina han logrado garantizar pensiones mínimas a sus beneficiarios; sin embargo, carecen de estimaciones robustas de los pasivos fiscales contingentes asociados a las garantías. Sobre la base de un modelo de microsimulación, en este documento se llevan a cabo proyecciones hasta el año 2100 para Bolivia, Chile, Colombia, El Salvador, México, Perú y República Dominicana. Del análisis realizado, se desprende que asumiendo que no se producen cambios de política estos gobiernos deberían destinar, en promedio, alrededor de 1,2% del PIB para financiar los sistemas de capitalización a partir de 2050, y alrededor de 2,7% del PIB hacia el año 2100. Se destacan los casos de El Salvador, Colombia y Bolivia, cuyos gastos resultarían entre 70% y 120% superiores a la media. A su vez, el porcentaje de pensionados que cobrará la pensión mínima gara...
This paper presents projections for 18 Latin America and Caribbean countries of pensions and heal... more This paper presents projections for 18 Latin America and Caribbean countries of pensions and health expenditures over the next 50 years, compares them to advanced countries, and calculates estimates of the fiscal gap due to aging. The exercise is crucial since life expectancy is increasing and fertility rates are declining in virtually all advanced countries and many developing countries, but more so in Latin America and the Caribbean. While the populations of many of the regions countries are still relatively young, they are aging more rapidly than those in more developed countries. The fiscal implications of these demographic trends are severe. The paper proposes policy and institutional reforms that could begin to be implemented immediately and that could help moderate these trends in light of relevant international experience to date. It suggests that LAC countries need to include an intertemporal numerical fiscal limit or rule to the continuous increase in aging spending while ...
?Como viabilizar social y politicamente el proceso de integracion a la economia mundial? ?Como au... more ?Como viabilizar social y politicamente el proceso de integracion a la economia mundial? ?Como aumentar el ritmo de crecimiento de la productividad del trabajo, fuente ultima del crecimiento sostenible y del aumento del salario real? ?Como lograr condiciones de trabajo mejores, mas seguras y que propendan al crecimiento de la productividad? Este libro explora algunas de las respuestas a estas preguntas tal como fueron formuladas por un grupo de investigadores academicos y del mundo sindical reunidos por dos dias en Brasilia en Octubre del 2003 a invitacion del Ministerio de Trabajo de Brasil, de la Organizacion Regional Internacional de Trabajadores (ORIT) y del Banco Interamericano de Desarrollo. Este libro es un ejemplo del dialogo abierto y bien informado que es necesario para adoptar las politicas y realizar las reformas necesarias para que todos podamos compartir los frutos de una mejor integracion al mercado mundial.
With the aim of guiding the work agenda on improving public health expenditure efficiency in the ... more With the aim of guiding the work agenda on improving public health expenditure efficiency in the LAC region, the Inter-American Development Bank held a workshop entitled “Public Expenditure Efficiency and Outcomes: Application to Health, Challenges and Opportunities for Improvements in Latin America and the Caribbean” in March 2016. This document presents key discussions from the workshop, which brought together professionals in public financial management and healthcare. It focuses on understanding and measuring both technical and allocative efficiency, identifying measurable indicators of inputs and outputs under policymakers’ control, and highlighting challenges and opportunities for improvement, as well as potential priority policy areas in Latin America and the Caribbean.
There is scant empirical economic research regarding the way that Latin American governments effi... more There is scant empirical economic research regarding the way that Latin American governments efficiently allocate their spending across different functions to achieve higher growth. While most papers restrict their analysis to the size of government, much less is known about the composition of spending and its implications for long-term growth. This paper sheds light on how allocating expenditures to investment in quality human and physical capital, and avoiding waste on inefficient expenditures, enhance growth in Latin America. This paper uses a novel dataset on physical and human capital and detailed public spending that includes -for the first time- Latin American countries, which is categorized by a cross-classification that provides the breakdown of government expenditure, both, by economic and by functional heads. The database covers 42 countries of the OECD and LAC between 1985 and 2017. There are five main results. First, the estimated growth equations show significant positive effects of the factors of production on growth and plausible convergence rates (about 2 percent). The estimated effect of the physical investment rate is positive and significant with a long-run elasticity of 1.2. Second, while the addition of years of education as a proxy for human capital tends to have no effect on growth, the addition of a new variable that measures quality-adjusted years of schooling as a proxy for human capital turns out to have a positive and significant effect across all specifications with a long-run elasticity of 1.1. However, if public spending on education (excluding infrastructure spending) is added to the factor specification, growth is not affected. This is mainly because, once quality is considered, spending more on teacher salaries has no effect on student outcomes. Therefore, the key is to increase quality, not just school performance or education spending. Third, both physical and human capital are equally important for growth: the effect of increasing one standard deviation of physical capital or human capital statistically has the same impact on economic growth. Fourth, increasing public investment spending (holding public spending constant) is positive and significant for growth (a 1% increase in public investment would increase the long-term GDP per capita by about 0.3 percent), in addition to the effect of the private investment rate. However, the effect of public spending on payroll, pensions and subsidies does not contribute to economic growth. Fifth, the overall effect of the size of public spending on economic growth is negative in most specifications. An increase in the size of government by about 1 percentage point would decrease 4.1 percent the long-run GDP per capita, but the more effective the government is, the less harmful the size of government is for long-term growth.
Between 2003 and 2009, Argentina’s social spending as a share of gross domestic product increased... more Between 2003 and 2009, Argentina’s social spending as a share of gross domestic product increased by 7.6 percentage points. Benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009, primarily due to the introduction of a new noncontributory pension program—known as the pension moratorium—in 2004. The redistributive impact of the expansion of public spending on education and health was also sizable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.
This paper presents projections for 18 Latin America and Caribbean countries of pensions and heal... more This paper presents projections for 18 Latin America and Caribbean countries of pensions and health expenditures over the next 50 years, compares them to advanced countries, and calculates estimates of the fiscal gap due to aging. The exercise is crucial since life expectancy is increasing and fertility rates are declining in virtually all advanced countries and many developing countries, but more so in Latin America and the Caribbean. While the populations of many of the regions countries are still relatively young, they are aging more rapidly than those in more developed countries. The fiscal implications of these demographic trends are severe. The paper proposes policy and institutional reforms that could begin to be implemented immediately and that could help moderate these trends in light of relevant international experience to date. It suggests that LAC countries need to include an intertemporal numerical fiscal limit or rule to the continuous increase in aging spending while covering the needs of the more vulnerable. They should consider also complementing public pensions with voluntary contribution mechanisms supported by tax incentives, such as those used in Australia, New Zealand (Kiwi Saver), and the United States (401k). In addition, LAC countries face an urgent challenge in curbing the growth of health care costs, while improving the quality of care. Efforts should focus on improving both the allocative and the technical efficiency of public health spending.
Latin American and Caribbean countries have made efforts to ensure that fiscal policies do not ca... more Latin American and Caribbean countries have made efforts to ensure that fiscal policies do not cause biases toward women. However, depending on where the tax burden falls, taxes do create gender biases. This technical note has two purposes. First, it provides evidence of how womens economic participation, care responsibilities, and consumption patterns enter into a countrys tax systems, generating invisible biases. Second, it summarizes the main lessons learned through cross-country comparisons that analyze the impact of direct and indirect taxes on gender equality, the progressivity of the tax systems using both income and expenditure as welfare measures, and the impact of tax systems and tax reforms on households depending on their composition and across the income distribution. The note also provides policy recommendations and good practices that will add to the regions efforts to strengthen fiscal policy taking a gender perspective into account. There is no unique approach to ac...
Frente a beneficios previsionales de los regímenes de capitalización en niveles mucho más bajos q... more Frente a beneficios previsionales de los regímenes de capitalización en niveles mucho más bajos que los previstos, los gobiernos de la región de América Latina han logrado garantizar pensiones mínimas a sus beneficiarios; sin embargo, carecen de estimaciones robustas de los pasivos fiscales contingentes asociados a las garantías. Sobre la base de un modelo de microsimulación, en este documento se llevan a cabo proyecciones hasta el año 2100 para Bolivia, Chile, Colombia, El Salvador, México, Perú y República Dominicana. Del análisis realizado, se desprende que asumiendo que no se producen cambios de política estos gobiernos deberían destinar, en promedio, alrededor de 1,2% del PIB para financiar los sistemas de capitalización a partir de 2050, y alrededor de 2,7% del PIB hacia el año 2100. Se destacan los casos de El Salvador, Colombia y Bolivia, cuyos gastos resultarían entre 70% y 120% superiores a la media. A su vez, el porcentaje de pensionados que cobrará la pensión mínima gara...
This paper presents projections for 18 Latin America and Caribbean countries of pensions and heal... more This paper presents projections for 18 Latin America and Caribbean countries of pensions and health expenditures over the next 50 years, compares them to advanced countries, and calculates estimates of the fiscal gap due to aging. The exercise is crucial since life expectancy is increasing and fertility rates are declining in virtually all advanced countries and many developing countries, but more so in Latin America and the Caribbean. While the populations of many of the regions countries are still relatively young, they are aging more rapidly than those in more developed countries. The fiscal implications of these demographic trends are severe. The paper proposes policy and institutional reforms that could begin to be implemented immediately and that could help moderate these trends in light of relevant international experience to date. It suggests that LAC countries need to include an intertemporal numerical fiscal limit or rule to the continuous increase in aging spending while ...
?Como viabilizar social y politicamente el proceso de integracion a la economia mundial? ?Como au... more ?Como viabilizar social y politicamente el proceso de integracion a la economia mundial? ?Como aumentar el ritmo de crecimiento de la productividad del trabajo, fuente ultima del crecimiento sostenible y del aumento del salario real? ?Como lograr condiciones de trabajo mejores, mas seguras y que propendan al crecimiento de la productividad? Este libro explora algunas de las respuestas a estas preguntas tal como fueron formuladas por un grupo de investigadores academicos y del mundo sindical reunidos por dos dias en Brasilia en Octubre del 2003 a invitacion del Ministerio de Trabajo de Brasil, de la Organizacion Regional Internacional de Trabajadores (ORIT) y del Banco Interamericano de Desarrollo. Este libro es un ejemplo del dialogo abierto y bien informado que es necesario para adoptar las politicas y realizar las reformas necesarias para que todos podamos compartir los frutos de una mejor integracion al mercado mundial.
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