LATIN AMERICAN GOVERNMENTS AT A GLANCE: GOALS AND KNOWLEDGE GAPS

Jeffrey RinneJune 2009

A hot topic

Tremendous promise...

But as it turns out, it’s not that simple

[Note the elegant simplicity of “cold fusion”]

Presentation outline1. Our challenges

Theory Contestability Conceptual categories

2. All is not lost: Positive incremental steps

SNA and the Public Domain3. The LAGG initiative

How does it attempt to incorporate these lessons?

Where do we stand?

1. Our challenges Theoretical: rational actors have choices

Metrics can be powerful tools for: a) learning, and b) motivation

But there’s a “motivational problem” too: the many faces of “gaming”

Contestability: no agreed Platonic ideal in goals or their measurement This means trouble for cross-national metrics And for tracking metrics over time

Operational categories for common understanding

6

2. All is not lost Main messages:

Accept the first two challenges (theory and contestability). Incorporate them; do not dismiss them. THERE IS COMMON GROUND: New

institutionalism, policy issues that resonate across countries

Continue the hard work to develop a more robust common language of operational categories to underpin our metrics

(a) Operational categories: SNA A major strength of the SNA is the ability to compile

accounts for whole sectors, individual units, or some intermediate levels and to aggregate the accounts in different ways. But it’s tricky

e.g., some non profit institutions are part of “general government” while others are not

How to account for “joint ventures” You can build it up and also take it apart. How many layers of the onion should be unraveled?

That depends on the question or issue of concern Is it a mammal? Dogs vs. cats; hound vs. non-sporting, terrier

…

An illustration

(b) Operational categories: The “Public Domain”

ORCHESTRATION Governments use their powers to pass laws

affecting the behavior of other economic units.

They redistribute income and wealth by means of taxes and social benefits.

PRODUCTION FACTORY *

The Public Domain1 2 3 4 5

Expenditures Categories of General Government SNA Account name Organizational Perspective of the Public

DomainProposed Classification: Sub-domains of the public domain Examples of units

Government units a/ & other non-market public units: Gral. Admin, defense, & functional sub-sectors

Social Security funds

Private non-market non-profit institutions financed and "controlled" by government units b/

Category B - Schools, hospitals, etc. that are largely funded and controlled by government but not owned by government

Market corporations & quasi-corporations, financed by public funds in exchange for the delivery of goods or services to users c/

Category C - Private hospitals (non profit or for profit) financed through social security, private market organizations financed by public funds in exchange of the delivery of goods or services directly to the users

Public corporations & quasi-corporations (public enterprises)

Sub-domain (iii): Public corporate provision of services in the PD (market provision by publicly owned units)

Category D - Publicly owned enterprises (not classified in the General Government sector), like publicly owned banks, harbors, airports

Procurement (including contracting out) d/

Concessions of legal monopolies

Transfers in cash to economic actors that are aimed at influencing the level of production of the producers or the level of consumption of consumers

* Subsidies* Social benefits other than social transfers in kind * Other current transfers* Adjustment for the net equity of HH in pension funds* Capital transfers

Some liabilities of the General Government Sector

* Interest* Other property income* Current taxes on income, wealth* Other taxes on production

Investment in Gross Capital Formation or Non-produced Assets of the General Government Sector

* Gross capital formation* Acquisitions less disposals of non-produced assets

Production of Goods and Services in the Public

Domain

Category A - Core ministries, departments and agencies, non market publicly owned hospitals, public schools , social security organizations etc. It includes units at levels of government, including the regions, the provinces or the municipalities

Catefory E - Contracting out to private enterprises: they deliver the goods or services to the public units that sub-contract them.

Sub-domain (i): Direct provision of services in the PD (mainly publicly financed provision by publicly owned units)

Sub-domain (iv): Devolved provision of services in the PD (market provision by privately owned units)

Sub-domain (ii): Indirect provision of services in the PD (publicly financed provision by privately owned units)

* Intermediate Consumption

* Compensation of employees

* Social transfers in kind via market producers (we used Other Current transfers to households)

3. The LAGG initiativewww.lagovglance.org

The LAGG Initiative (incorporating lessons)

Indicators are (inevitably) both descriptive and prescriptive … but put the weight on description Why we’re leery of rankings.

Metrics work better when their the products and tools of a Policy Community: donors and governments alike, civil society & researchers

Use extreme caution with perceptions-based and composite indicators

Embrace the need for redundancy and multiple assessments