How could public spending in Latin America be more efficient? In the first place, allocating more money to the infrastructures item, in which public investment has been systematically decreasing since the 1980s, when it was almost 10% higher than today. “It is the type of expenditure that stimulates growth, because it complements private investment. If you do not give good public service in transportation, ports, the private does not participate in the same way, “Izquierdo explains. In the rest of the OECD countries, this chapter has also slightly decreased but, in the opinion of the economist, “makes more sense” in developed economies that already have a lot of infrastructure – and of higher quality – and much longer-lived populations that need to be provide assistance services. “But that this happens in Latin America, where there is neither the level of development nor aging that in Europe is very striking.” Investment in physical capital is essential to relaunch growth.
Another sector in which the evidence indicates that the best spending decisions are not always made is that of education. It is common for governments to detect a shortage of university graduates and decide to invest at this level. However, if those that come before have not been reinforced, it is of little use, especially for the most disadvantaged classes, which receive much greater returns when the first stages of education are strengthened.
