Report Nº: 103822/10/2023
Faced with a deficiency in a public agency, the prevailing reaction is to create another one to perform similar functions. Human development investment is the case, with enormous inefficiencies. The Nation must stop overlapping expenses with the provinces and their municipalities to concentrate on measuring results.
Due to the scandal generated by the Chief of Cabinet of the Province of Buenos Aires government, the Governor of the Province decided to accept his resignation and, in addition, to dissolve the Chief of Cabinet post. In his rationale, he stated that each Ministry will absorb the functions assigned to the Chief of Cabinet. The decision suggests that the Chief of Staff operated overlapped with the other ministries. By a fortuitous event, the relevance of improving public management by eliminating overlappings, which are sources of inefficiencies, was made explicit.
Functions overlapping is the rule in the Argentine public sector. One area where it is most present is in human development investments (basic education, public health, water and sanitation, housing and urban planning, and social assistance). These functions are –according to the Constitution– responsibilities of the provinces and their municipalities, but frequently the national State also invests in them. Thus, the three levels of government concur in the management of investment in human development.
How is social investment distributed among the three levels of government? Taking data from the Ministry of Economy, it is observed that:
These data show that in the last 20 years, there has been significant growth in investment in human development (basic education, public health, water and sanitation, housing and urban planning, and social assistance) and that this increase is almost entirely explained by the overlapping of provincial and municipal functions by the national government. In other words, the effort to promote social investment was increased, but deepening the overlapping between the three levels of government.
What results were achieved with this increased investment in human development overlapping among the three levels of government? In education, in 2021, according to the Aprender tests, 70% of poor children who finish primary school do not know how to read, write, add, and subtract. In health, the infant mortality rate in the provinces is above 8 per thousand, doubling that of CABA, and in 5 provinces the rate is in 2 digits. According to the 2021 Census, 15% of households do not have running water, 37% do not have sewers, 13% do not have material floors in their houses (the proportion reaches 30% in some provinces) and 40% do not have gas service or electricity for cooking. This degradation can be explained by a multiplicity of causes, but a very important one is the low quality of public management derived from the overlapping between state agencies.
To reverse this process, it is essential to address the functional reorganization of the public sector. Assuming that what is relevant is not the number of ministries, but what they do. A key step is for the national government to stop interfering in responsibilities that belong to the provinces and their municipalities and to concentrate on measuring results. The national government must produce rigorous human development indicators and massively disseminate them with official advertising (currently used for the ruling party propaganda) in order to empower citizens. The objective is that citizens put pressure on their governors and mayors to improve the management of social investment.
In the federal organization, each province with its municipalities is responsible for the human development of its territory. The national government has no tools to make up for the deficiencies of the provinces. With direct interventions, the national government adds problems because it worsens the social results. It would be much more convenient for the national government to induce the population to better control their local governors.