Public expenditure in Latin America: Trends and key policy issues

This article examines trends in public spending in Latin America from the mid-1990s to 2006. It also examines key policy issues, including the cyclicality of spending, public investment, public employment and social spending, finding that primary expenditures as a share of gross domestic product have trended upward for the past ten years, driven by increases in current spending, in particular for social expenditures. Fluctuations in real spending have continued to follow a pro-cyclical pattern. The authors conclude that there is substantial scope to improve the efficiency of public investment, public employment and social spending.