Institutional Transformation and Strengthening of Latin America's Ministries of Finance: From Control to the Strategic Use of Public Resources for Development
This work examines regulatory framework from two perspectives. In methodological terms, it analyzes the current state of the functions assigned through regulations to ministries of finance in the region, by reviewing their legal and regulatory frameworks. On the analytical front, it proposes two functional models (one based on traditional functions and the other on modern ones) and uses them to catalog the regulatory development of these ministries and suggest the gaps that must be addressed to move from a traditional management model to a modern one. Each of these models responds to different objectives of the ministries of finance. In the case of those with traditional functions, their orientation is to the administration and control of public resources, which allow them to fulfill said functions in the short term, closely controlling the fiscal fund, although with little capacity for multi-year projection on potential performance of public finances. In the case of those with modern functions, one set allows them better planning and projection of public finances, and a more strategic and quality management of public spending, reinforcing fiscal responsibility and sustainability. The transition of the ministries of finance to these modern functions allows them to further develop the necessary capacities to ensure the financing of the State's commitments with the citizenry (public goods and services) in the medium and long term, independent of the economic cycles. Given the scarcity of research and studies on the institutional development of the these ministries in Latin America, and within the current context resulting from the COVID-19 pandemic, this study presents an opportunity to analyze entities that play a decisive role in managing the crisis as well as the economic recovery process.