The High Cost of Bureaucracy

The time invested to meet requirements and obtain a response in a process in Salvadoran government institutions costs to the society more than $400 million a year.

Thursday, December 20, 2018

According to data from the Regulatory Improvement Body (OMR), in El Salvador 90% of the costs incurred by users are the result of the time spent to meet the requirements for the procedure, and the remaining 10% corresponds to the waiting time for the response.

The OMR explains that "... On average, 164 procedures are done per ministry, 11 requirements are requested per modality, to obtain resolution, 38 calendar days must be awaited and generate a unit cost of $1,788.06." reports that "... Those who pay the most for the formalities are legal entities. Of the 2,240 modalities, 67% are business with a CES equivalent to $276.9 million. On the other hand, the remaining 725 types of procedures are citizens and cost them more than $130 million annually."

The article details that the institutions generating the highest costs are:

"1. Ministry of Finance With 47.9% of the total cost, it totaled more than $195 million. Greater barriers for import permits and international or domestic transit.
2. Public Works reaches $73.8 million mostly in matriculation and transfer procedures.
3. Education with $28.7 million of the total. The major procedure is the reinstatement of the bachelor's degree.
4. Foreign Relations mainly for the issuance of passports, totaled $28.3 million.
5. Agriculture with $21 million, mostly for phytosanitary import authorizations.

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