Latin American Economic Outlook 2012 Transforming the State for Development: Transforming the State for Development

Improved efficiency of public administration is crucial to address both the short-term and long-term dimensions of these challenges. The real change, however, will come if Latin American and Caribbean states carry out meaningful fiscal reforms, making them not only more efficient but also more effective. The increased effectiveness of fiscal policy holds the promise to provide resources needed to address the key challenges of economic development. Three key priority areas for investing additional resources have been highlighted by many governments in the region for their potential to raise competitiveness and social inclusion: education, infrastructure and innovation. In each of these areas, more efficient administration and more effective strategic action is needed from states.