Spending with more results


Source: O Estado de S. Paulo, 02/01/2008

The notion that public spending in Brazil is not only excessive, but of poor quality, is widely disseminated, even among authorities at the three levels of government. Less widespread, however, are in-depth studies of this serious public administration problem, accompanied by actionable suggestions on how to alleviate it.

The Foundation Institute for Economic Research (Fipe) has just released a study, made to order by the Brazilian Institute of Ethics in Competition (Etco), which seeks to address the issue in its most relevant points, namely, those of spending on Education, Public Security , Health, civil service and Social Security.

The hypothesis that guided the elaboration of the study is that the improvement of the quality of these expenditures allows “to improve the results of public policies, without increasing taxes” - what every self-respecting politician or public administrator should aim for.

The work team was coordinated by prof. Hélio Zylberstein - who also took charge of the chapters dealing with spending on public servants and “a new Social Security for new workers” - and integrated by professors Carlos Antonio Luque (challenges of the Brazilian economy), Maria Dolores Montoya Diaz (expenses with Education), Pedro C. Chadarevian (Public Security expenses) and Thiago Sevilhano Martinez (Health expenses).

Right at the presentation, prof. Zylberstein points to the relevant practical effect of adopting the policies suggested there: "Private savings could be channeled towards more noble (and more productive, we would say) purposes than simply financing public debt" (which would be reduced).

A disturbing fact is clear from the numbers and statistics gathered for the preparation of the study: last year, for a total tax revenue of R $ 806,0 billion (34,7% of GDP) the total public expenditure was R $ 873,4, 37,6 billion (67,4% of GDP), leaving a negative balance of R $ 2,9 billion, or 425,1% of GDP. But only two expenditures - with social security benefits and with nominal interest - amounted to R $ XNUMX billion.

Thus, public expenditures that can be considered - according to the authors of the study - of low productivity or zero productivity consumed the equivalent of almost half of the total, while the equivalent of the other half (R $ 448,3 billion) was distributed among Education, Health, Public Security, costs, investments and other expenses of the different levels of government.

It seems beyond doubt, therefore, that a strategy to improve the quality of public spending in general has to attack, primarily, these two majority expenditures so that, with the tax burden maintained, more resources are left for productive expenditures - mainly in Education, Health , Security and infrastructure.

This does not mean that the quality of these expenses considered to be productive is satisfactory. On the contrary, they can and must improve. In Education, for example, it is clear that Brazil does not spend very little: in a selected group of countries that spend between 3,7% and 8,8% of their respective GDPs, Brazil is among those that spend the most, with 6,6% of GDP, but “the results of student performance evaluations at an“ international level are very uncomfortable for our country ”, says the study. And yet, that "the simple increase in spending on Education, without the concern of improving the school system and its management, would not bring results".

In the area of ​​Public Security, the study points out that "the volume of spending is not a significant factor to explain the level of violence in Brazilian states". And it gathers evidence of “the inefficiency of a repressive security policy, without the necessary preventive counterpart”.

In Health, the focus also on prevention and promotion is indicated to reduce spending on hospitalizations, medications and tests. And it is highlighted that countries that emphasize prevention "have more equitable results, lower costs and better levels of user satisfaction".

Finally, the study provides a detailed work program for those who propose to reformulate public policies, seeking better results and savings in expenses.