Friday, June 06, 2008

Fiscal Policy Efficiency in Latin America (II)

Is it the State some how the enemy of well being of society?, or is it the case that the State ,has been capture by special interest groups ?.Who are these groups? Politicians?, public management staff who serve their own interest, rather than those of the one they should be serving? .These questions, are at the core of the issue of efficiency of fiscal policy.
Let give more attention to it. Fiscal policy is political by nature, it deals with Government ability to pursue the improving of welfare at society level, which is evaluated depending upon the type of preferences voters have, about checking out what the Government is doing. Some countries, evaluate that performance every four years, while others do every six years. However, it looks like such a period of time is too long to have the sense of control fiscal policy need. Therefore, the first issue to improve the efficiency of fiscal policy, deals with better and more often participation of voters, (decentralization),or better control mechanisms ,to avoid both the fiscal resources to be captured (for instance too many organism doing the same and trying to get the same objective), or the worst of the inefficiency about fiscal policy: Corruption.
A recent Corruption index 2008 survey ,done in Chile by the Freedom and Development Institute, shows that the highest level of corruption is found at the government organisms level. On top of the list are Municipalities (5,7)and public firms(6,0).Next are the Justice system, and different Ministry (5,1),closing the list are regional governments (5,0).Besides 50% of those executives included on the poll (411),thinks that corruption is higher now than last year. It follows, that fiscal policy inefficiency seems to be explained by the purpose deviation about its nature,done by those groups who capture teh State for their own interest .
A second issue to improve fiscal policy efficiency, is related to up grade the academic credential of those in charge of public management, along with a modernization of the public management practices. This means to change the political profile of public management, for a professional one. Additional progress on this matter in Chile, has not been fast enough,although the number of executives selected by political preferences has been decreasing, in favor of those based upon professional credentials.-