Latin American and
Government at a Glance:
Yet more could be done to improve the overall management of public finances, public sector hiring and pay, and public procurement practices, it says. This could help raise living standards, strengthen public services and protect against future economic shocks.
For example, the report reveals the level of inequality in public sector pay, with top managers paid much more relative to other staff than in OECD countries. The first such cross-country comparison on public sector compensation shows top managers are paid 11 times average income, as measured by per-capita GDP, versus 6 times in OECD countries.
"Good government practices are critical for economic development, resilience and overall wellbeing," said
Latin American and
"While the region has made important innovations in public financial management in the last decade, such as the adoption of performance based budgeting, governments must still focus on generating fiscal space to increase much-needed expenditures in poverty reduction programs, basic infrastructure, and mitigation of economic shocks", said
The report compares the performance of 17 countries in 31 areas, showing how LAC governments are performing relative to each other and compared with the OECD average. Individual country notes are available here.
Its findings include:
- LAC countries have small public sectors, with public employment accounting for 10.7% of the labour force compared with an OECD average of 15.3%. While a lean public sector is a good thing, a certain size is needed to provide adequate services.
- Ten LAC countries have introduced fiscal rules, and many have added stabilisation funds to cover cyclical price swings in commodities. Eight LAC countries have brought in medium-term spending frameworks for a longer-term budget outlook.
- LAC government revenues equal 25.6% of GDP versus an OECD average of 41.9% and spending averages 27.8% of GDP versus 45.2% in OECD countries. This is due in part to a low level of tax collection. Tax evasion and non-progressive tax structures are major challenges.
- Public employees earn less than they would in advanced economies, although they tend to do better than private sector workers. Wide pay gaps mean senior managers earn 6.7 times what secretaries earn compared with 4.6 times in OECD countries.
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