Universidad del Rosario

Escuela de Administración
Current Affairs LATAM
Prof. Alejandra Pulido Lopez
Camila Andrea Freyle Gómez.

Institutions in LATAM

1. Explain the role of the insititutions in the development of the region, and
compare the topics within the countries chosen

Public institutions can affect or assist in the development of the region because they
are the ones that help the State with the creation of conditions to favor the well-being
of people, guarantee their fundamental rights and provide them with public goods
and services that ensure certain level of material conditions and quality of life.
Citizens, in turn, fulfill certain duties and obligations, such as voting and paying
taxes. The social contract, understood as a tacit agreement, is characterized by
being an explicit and implicit agreement that determines what each socioeconomic
group gives to the State and what it receives in return. Citizens firmly submit to these
agreements with three conditions:
1. They must believe that the agreements are reliable (that is, they trust the
State institutions)
2. They should consider the agreements as beneficial (that is, their satisfaction
with what they get from them motivates them to a social commitment)
3. They should perceive that the covenant is fair (nobody favors more than
others and nobody benefits at the expense of others).
In the event that these conditions don’t have positive indicators, citizens would need
incentives to participate in the social contract, which is why people consider it
increasingly justifiable to avoid taxes or renounce public services, which in turn It
means that the State stops entering money that is used for the development of the
same society, for example for the improvement of public services, investing in
different aspects that promote economic development (infrastructure, research,
Technology, innovation) or improve quality of life of the same citizens.
There is a growing disconnect between citizens and public institutions, which puts
socioeconomic advances at risk and weakens the social contract. The needs and
requests of citizens aren’t being met, which means that trust in public institutions is
less and less.
Citizens' confidence in public institutions has always been low, but this has declined
even more since the global economic crisis. In 2017 almost 75% of citizens trusted
little or no trust in governments, this covers issues of corruption, electoral honesty
and judicial system. To this is added the fact that satisfaction with public services
has also decreased. An example of this is the percentage of the population satisfied
with the quality of health care services, which decreased from 57% to 41%, between
2006 and 2016. Likewise, satisfaction with the quality of the education system fell
from 63 % to 56%, in the same period of time.
 Argentina: The perception of the quality of government in Argentina is above
the LATAM average, although it deteriorated during the last decade. The
government quality index, which includes indicators of corruption, law and
order and the quality of bureaucracy, decreased from 0.56 to 0.47 between
2005 and 2015. The deterioration is also manifested in the citizens'
confidence in the national government, that fell approximately 10 percentage
points between 2006 and 2016. The proportion of citizens who perceive that
corruption is widespread in the country rose from 76% to 78% between 2006
and 2016. However, Argentines seem to rely more on the judicial system now
from the country that ten years ago. Almost 31% expressed confidence in the
judicial system and the country's courts in 2016, unlike 27% in 2006. Citizen
satisfaction with public services has had a growing trend in Argentina,
although it remains low. Positive socio-economic changes in Argentina are
reflected in an increasing middle class (daily per capita income of 10-50 USD
PPA), accompanied by decreasing poverty rates. The size of the middle class
in Argentina increased by almost 13 percentage points between 2005 and
2014, reaching 49%. Positive trends in Argentina, both in citizen satisfaction
with public services and in socioeconomic mobility, suggest that the country's
socioeconomic progress in recent years has effectively increased the real
well-being of citizens.
 Brasil: The quality of the Brazilian government, according to the government
quality index, decreased from 0.41 to 0.39 between 2005 and 2015. These
figures place the country below the LATAM average, which is 0.44, and that
of the OECD which is 0.78 in 2015. Also other governance indicators related
to participation and accountability, political stability, government effectiveness
and the quality of regulation have deteriorated over the last decade. Citizens'
confidence in the judicial system increased between 2006-2016, but
confidence in the national government decreased by more than 8 percentage
points. In 2015, only 26% of the population expressed confidence in the
national government. This places the country 3 percentage points below the
LATAM average and 11 percentage points below the OECD. The satisfaction
of Brazilians with public services fell considerably between 2010 and 2015. In
the same period, the public perception of security also worsened: almost 21%
of Brazilians considered that the safety of citizens was good or very good in
2010, while only 6.4% expressed the same opinion in 2015. In addition, less
 than 25% of the population expressed that they were satisfied or very satisfied
with public education or public hospitals in 2015. This situation contrasts with
a growing middle class and levels of diminishing poverty. The middle class in
Brazil increased by 16 percentage points between 2005 and 2015. The
paradox observed between decreasing satisfaction with public services and
rising income levels could be reconciled taking into account subjective
perceptions of well-being, given that only 33% of Brazilians felt part of the
middle class in 2015. This reflects important challenges in the country's ability
to transform economic progress into better provision of public services and
opportunities for all.
 Chile: The quality of government in Chile is high. According to the
government quality index, Chile reaches 0.75, placing it above the LATAM
average (0.44) and close to the OECD (0.78). Thus, Chile is positioned as the
country with the highest quality of government in LATAM. Despite this, and
according to the regional trend, in Chile there is a growing lack of confidence
in the national administration. In 2016, only 20% of the population expressed
confidence in this institution. According to the Anti-Corruption Policy Index
(ranging from 0 to 10), Chile records 9.0, above the LATAM averages (5.12)
and the OECD (6.91), however, 82% of Chileans declared in 2016 that the
Corruption is widespread in the country. Chileans are less and less satisfied
with the country's public services. In 2015, only 14% of the population was
satisfied or very satisfied with public hospitals, and only 21% with public
education. On the other hand, the population that considers citizen security
to be good or very good fell from 19% to 11% between 2010 and 2015. The
size of the middle class grew from 34% to 52% between 2006 and 2015.
However , the distribution of the population according to subjective social
classes reflects a different situation. While 39% of the population was
considered part of the middle class in 2015, more than 55% identified
themselves with the lower or lower middle class. This, together with the
growing dissatisfaction with public services, suggests a disconnect between
economic progress and non-monetary welfare indicators. Despite having one
of the most numerous middle classes in the region, Chile faces the challenge
of remedying this disconnection and improving services for a growing and
increasingly demanding middle class.
 Colombia: The quality of the Colombian government increased from 0.38 to
0.42 in the 2005-2015 period, according to the Government Quality Index. In
addition, Colombia made significant progress in its efforts to increase the
accessibility and availability of its public information, and to encourage the
reuse of data in order to create value, according to the index of open, useful,
reusable government data. With a score of 0.76 over a total of 1, Colombia is
above both the LATAM average (0.44) and the OECD (0.56). Citizen
confidence in the government has decreased since 2006. In 2016, 86% of
Colombians said corruption was widespread in the country, placing Colombia
above the regional average of 79%. Similarly, the proportion of the population
that expressed confidence in the national government fell from 48% to 26%
in the same period. In addition, only 25% of Colombians expressed
confidence in the country's courts in 2016. In 2015, only 51% of citizens were
satisfied or very satisfied with the public education system, while only 28%
expressed satisfaction with services in public hospitals. The perception of
security has also deteriorated, decreasing from 23% to 16.6% the proportion
of people who perceived citizen security as good or very good. These
changes in public opinion on public institutions and services may be related
to the greater visibility of corruption cases due to efforts to combat this
behavior in the country.