Social Expenditure in Central America, Panama and the Dominican Republic at a Glance: 2007-2013

Accesible PDF image
Peer Reviewed icon Peer Reviewed
Date issued
Mar 2016
Editor
Beverinotti, Javier;
Prat, Jordi
Subject
Public Expenditure;
Public Finance;
Fiscal Deficit;
Public Debt;
Public Health Expenditure;
Education Expenditure
JEL code
H53 - Government Expenditures and Welfare Programs;
H52 - Government Expenditures and Education;
H51 - Government Expenditures and Health;
H4 - Publicly Provided Goods;
H3 - Fiscal Policies and Behavior of Economic Agents;
H1 - Structure and Scope of Government
Country
Belize;
Dominican Republic;
Honduras;
Guatemala;
El Salvador;
Nicaragua;
Costa Rica;
Panama
Category
Books
Social spending is a powerful tool to reduce poverty, achieve higher equality and better life conditions for the inhabitants of a country. In "Social Expenditure in Central America, Panama and the Dominican Republic: 2007-2013", a characterization of the different variables that have taken social expenditure to its current position is performed. During the economic crisis period, many governments of the region confront this situation with an increase in social expenditures. However, part of the increase was centered on inflexible items, particularly wages, which facilitated the increase in fiscal deficits and, consequently, on public debt. Thus, after the financial crisis, the fiscal situation has reduced governments' buffers to respond to economic shocks, which imply that we need to examine the fiscal policy given its rigidity, the scarcity of public resources and the institutional contract. The study of wage bill increases provides more information related to the causes of this dynamic, and allow us to offer recommendations to improve spending management without threatening public finances. A better use of resources could contribute to define a more efficient and equitable agenda for the countries in the region. Finally, something that was not deeply explored, as of today, is the institutional complexity and how this could facilitate, or hinder, the government's ability to express its fiscal policy, including the effectiveness in the use of public resources.
Generative AI enabled