Barbados remains among the best – and the worst – when it comes to spending tax dollars for the common good in the Caribbean and Latin America, a new study has found.
The island received top marks for early childhood education and healthcare services, according to a study on government spending by the Inter-American Development Bank (IDB).
But the report also gave Barbados the lowest ranking among the region’s 30-odd nations for the longest approval delays caused by bureaucratic red-tape.
The 421-page study of public spending in Latin America and the Caribbean discovered widespread wastage and inefficiencies that could be costing the region as much as US$220 billion a year or 4.4 per cent of the region’s gross domestic product (GDP).
The analysis also showed that there was ample room for regional governments to improve basic services without spending more.
The report, entitled Better Spending for Better Lives: How Latin America and the Caribbean Can Do More with Less, formed part of the IDB’s flagship studies series, Development in the Americas.
Data from 58 low- and middle-income countries, showed that Jamaica and Barbados led the way in early childhood education, with more than 85 per cent of all 36-to 39-month-old children having access to early education programmes and with preschool enrollment among poor families almost high as in the wealthiest ones.
On delivering health, the report described both Barbados and Cuba as “relatively good performers”.
“Barbados and Cuba exhibit good efficiency performance by producing wider and equitable access to health services,” it said.
But countries with relatively high per capita incomes such as Trinidad and Tobago, the Bahamas and Barbados were less efficient than other counties with similar income levels, such as Brazil, Mexico and Argentina, the study noted.
Accounting for external factors for a “more realistic comparison of performance”, countries such as Barbados and Jamaica rose “considerably in the efficiency ranking when considering their more difficult socioeconomic situation relative to their peers in the region”.
Barbados was also singled out for being “the worst performer” in the region when it came to the number of days required to complete permitting and approval procedures for infrastructure project. This was based on data up to 2016.
“In Barbados, the worst performer in Latin America and the Caribbean, it takes 442 days to obtain all permits and approvals,” it said, adding that overall Latin America and the Caribbean was the worst performer among other groupings as it had the longest delays.
“Delays not only increase the financial costs of infrastructure projects, it also reduce political credibility and improvements in services and tie up resources that could be allocated to alternative uses,” the study said.
The IDB’s Chief Economist Alejandro Izquierdo, who edited the publication, said the report provided “a timely platform” for discussing how efficiently public resources were being spent.
“The good news is we can improve the lives of our citizens by spending better, rather than by spending more,” he said.
Consolidated public spending averages 29.7 per cent of GDP in Latin America and the Caribbean, almost six percentage points more than in the early 2000’s, the IDB said.
Some key findings of the report included a “moderate” estimate of inefficiencies in procurement, including losses caused by corruption and delays, and excessive civil service payroll and transfers that do not reach the targeted population, the release said.
The report stated that this amounted to some US$220 billion, “enough to eliminate extreme poverty in the region”.
It identified Chile and Peru as the most efficient in their spending, with wastage of 1.8 per cent and 2.5 per cent of GDP, respectively.
But it also pointed out that Latin America and the Caribbean spends four times more on the elderly than its younger cohorts, while acknowledging that crime levels remained high.
In its wide-ranging recommendations for policymakers, the study said it was necessary for the region to use more cost-benefit analysis when determining budget choices for better expenditure allocation.
It also pointed to the need for the creation of specific agencies for strategic planning that use rigorous evaluations of the impact of government programs before making allocation decisions.
In relation to education, the report recommended among other measures, accompanying higher spending per student with more accountability measures to reduce corruption, as well as better training and performance pay for teachers.
It called for improvement in police organization and efficiency, better management of crime prevention programs, and targeting high-risk places, people and behaviors, among others, in an effort to address the high crime levels.
“Pushing for government efficiency is not just about dry, technical considerations,” Fiscal and Municipal Lead Specialist Carola Pessino, co-editor of the study said.
“Providing citizens with more information so they can monitor their governments, increasing technical and allocative efficiency so they may get the services they deserve, are actions that will help restore people’s trust in government. They will then demand from their politicians more long-term investments rather than transfers, setting in motion a virtuous circle that produces better policies and better spending,” said Pessino.