Governments in Latin America and the Caribbean face significant development challenges, including insufficient economic growth, inflation, and institutional weaknesses. Overcoming these issues requires identifying systemic obstacles through data-driven diagnostics and equipping public officials with the skills to implement effective solutions.
Although public administrations in the region often have access to valuable data, they frequently fall short in analyzing it to inform decisions. However, the impact is big. Inefficiencies in procurement, misdirected transfers, and poorly managed human resources result in an estimated waste of 4% of GDP, equivalent to 17% of all public spending.
The report "Data for Better Governance: Building Government Analytical Ecosystems in Latin America and the Caribbean" outlines a roadmap for developing government analytics, focusing on key enablers such as data infrastructure and analytical capacity, and offers actionable strategies for improvement.
Key Messages
1. Expand the Use of Government Analytics in Latin America and the Caribbean
Public administrations in the region predominantly use data mainly to produce descriptive analyses for operational and transactional purposes. This approach misses opportunities to leverage advanced analytics for decision-making and better public policy design.
- The region is a global leader in adopting management information systems (MIS). By 2022, every country had both a Public Finance Management Information System and a Tax Management Information System. Additionally, 91% had a Human Resources Management Information System, and 84% had an e-Procurement system.
- These systems generate vast reservoirs of administrative data, offering significant untapped potential. However, 96% of MIS in the region are used exclusively for descriptive analytics, a trend observed across all surveyed government functions.
- Advanced analytics can transform public sector performance. For instance, Ecuador and Peru increased tax revenues significantly through transactional data analysis, while Guatemala reduced school dropout rates by 9% using student data analytics.
2. Create the Conditions for Effective Government Analysis
To fully harness the power of analytics, governments must complete the digitalization of their management information systems.
- Two-thirds of experts surveyed report that these systems remain partially digitalized, limiting their effectiveness.
- Mechanisms to ensure data quality and integration are essential. Yet, according to the World Bank's GovTech Maturity Index, only 25% of countries in the region have implemented a data quality framework. Without these controls, teams perform their own quality checks, creating inefficiencies and compromising the accuracy of analyses.
3. Integrate Data Analysis into Decision-Making Processes
Analytics should serve as a tool to complement policymaking, not replace it. Building officials' capacity to interpret and act on data-driven evidence is essential for effective governance.
- Governments must prioritize attracting and retaining skilled data analysts. However, only 12% of public administrations in the region offer a dedicated career path for these professionals.
Latin America and the Caribbean—and the world—already possess the data needed to revolutionize public management. Now is the time to capitalize on this potential by strengthening analytical capabilities, integrating insights into policymaking, and fostering a culture of evidence-based governance.