Improving the quality of public expenditure in the Dominican Republic

Although the international economic crisis that began in 2007 did not start with structural fiscal deficits, it has revealed important lessons for fiscal policy and for the role of, and challenges to, the quality of public expenditure. Many countries did not reduce their budget deficits sufficiently during the boom years when revenues were relatively high. Today, therefore, they have little fiscal room to fight the crisis and improve overloaded public sector structures. Fears of a new recession have awakened both developed and developing nations to the need to improve the quality of public expenditure. This does not solely or even necessarily imply imposing austerity measures and cuts in spending. Rather, it means developing mechanisms for better expenditure management, increasing the quality of public services, and improving public accountability mechanisms through more robust monitoring and evaluation systems with better indicators and higher-quality data. In this context, concern about the quality of public expenditure and about how spending is carried out is fundamental to achieving substantial cost savings and avoiding new tax increases or unintended reductions in services. Equally important are good governance, the decision to fight corruption, and long-term political commitment (because in most cases achieving positive effects takes many years). The Dominican Republic has already embarked on an ambitious agenda to improve the quality of its public expenditure, and it has made some notable achievements: for example, the national development strategy 2030 has been approved; progress has been made on multiyear planning; public servants are required to fulfill a state affidavit; a citizens' portal has increased the transparency of public spending; a single treasury account is being created; the chamber of accounts, the Comptroller General´s Office, and other institutions for internal control have been strengthened; purchases and supplies for the national health system have been unified; mechanisms for monitoring education outcomes have been improved; and the efficiency of the energy sector has been increased. In spite of these accomplishments, however, much remains to be done. This publication compiles a set of technical notes that look at both the achievements and the challenges for the Dominican Republic's public sector, offering lessons and examples intended to help country officials and public agencies carry the agenda forward. It demonstrates that although the process is still ongoing in the Dominican Republic, and therefore there are important challenges to face, government officials at all levels are showing increasing interest in adopting new management strategies, improving the quality of public expenditure, and producing better results for the country and its citizens.