Beyond Good Practices: The Political Economy of Public Asset Management

This report presents a first systematic approach to a strategic yet scarcely explored topic: the political economy of the management of non-financial public assets, such as land, buildings, and vehicles owned by the State. The study seeks to understand why certain “good practices” in the management of public assets are adopted or not, and why they are sustained or disappear over time. Based on a synthetic analysis of seven recent reform trajectories in Latin America, the report shows that the success of these processes depends not only on technical or managerial aspects, but also on political-institutional dynamics among actors with different interests and capacities to exert influence. In addition to the Latin American cases, the findings were also compared with cases in other regions, especially in countries with high levels of maturity in asset management, revealing several similarities as well as some regional specificities.

The reforms studied tended toward the strategic and integrated management of the public administrations asset portfolio, generally through the creation or strengthening of specialized governing bodies. In all cases in the region, the approval of the reforms required the support of the Center of Government the Presidency or the Ministry of Finance driven by objectives such as rationalizing the public sector, financing priority policies, or complying with international standards. Without active sponsorship from the Center, reforms have faced resistance from sectoral ministries and agencies interested in retaining control over “their” assets, particularly during the implementation stages. In the Latin American cases analyzed, these interactions have taken place mainly within the Executive Branch, with more limited participation from external actors, a dynamic similar to that observed in other public financial management reforms.

Based on these findings, the report proposes practical recommendations to increase the viability of future reforms by formulating strategies to create conditions for political feasibility, design and sequence reforms, and broaden and sustain supporting coalitions. The cases analyzed also identified the most effective “levers” and “entry points” for introducing and advancing reforms.

Together with these findings and recommendations, the report develops a conceptual and methodological framework for political economy analysis as an input to guide the design of future reforms.