The egg or the chicken?

Citizens generally ask for and even demand massive social spending without much thought about its implications, says Ocliver A. Rojas Gómez in his blog on the Fuerza Verde web site.

Friday, July 25, 2008

The market can't carry out all economic functions, he says, and so some of the responsibility has to be lodged with the State as a provider of social services.
Still, the State should do so keeping in mind the basic concepts of efficiency and equality in terms of access to opportunity.
Trying to resolve economic differences can become a means of improving distributive justice and that implies a better quality of life, especially among low-income groups - if public policy can encourage the social investment without generating market failures.

More on this topic

El Salvador: Complaints Over Fiscal Discipline

May 2012

The governments cash-strapped position is reflected by delays in payments, while it increases short-term public debt and the IMF has suspended the precautionary agreement.

"Public debt in El Salvador between March 2011 and March 2012 increased by $450 million (+4.3%) to $13,232,000.

El Salvador: $ 818 Million in Social Programs

January 2011

The government announced a record investment in 2011, 3.76% percent of its gross domestic product (GDP).

The chief of staff, Alex Segovia, said in a press conference that plans are to invest in 2012 $173.5 million in social security and $644.5 million in infrastructure projects, totaling $ 818 million.

Fiscal Adjustment is Essential in Costa Rica

February 2015

The constant increase in Costa Rica's public debt seems unstoppable, which could generate "a sudden change in investor confidence" and force "a messy macroeconomic adjustment".

Even if in the coming months they manage to secure parliamentary approval for tax measures currently requested by the government, public debt will continue to increase and in 2019 will represent over 50% of GDP.

IMF: Time is running out for Costa Rica

March 2016

The institution is once again emphasizing more efficient public spending and making cuts before a fiscal adjustment comes into force, in a form that is "draconian and with emergency measures".

Making cuts and improving efficiency in public spending is once again the main recommendation of the International Monetary Fund.

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