How Can Governments Turn Data into Better Decisions?

Governments generate enormous amounts of data every day. Every time a salary is paid, a contract is awarded, or a service is provided, their systems produce valuable information. However, much of that data is never used to improve public management. 

The opportunity is immense. More than 90% of the countries in Latin America and the Caribbean have systems for managing payroll, procurement, or public finances, and all have digital tax systems. However, most use this data primarily for day-to-day operations, not to diagnose problems or anticipate decisions. 

In practice, this means that millions of public transactions (salaries, contracts, payments, appointments, and procurements) remain stored in government systems without being transformed into information for decision-making. In a recent analysis of public payroll conducted by the Inter-American Development Bank (IDB) in just one country, more than 30 million individual public employment records were processed between 2019 and 2024, revealing opportunities for improvement with significant fiscal impacts. The raw data already exists; the challenge is to transform it into evidence to better allocate resources, strengthen policy implementation, and respond more effectively to people’s needs.

Administrative systems were designed to support governments’ day-to-day operations. Behind every transaction lies detailed information about who made the decision, when it occurred, how much it cost, where it was carried out, and what the outcome was. Payroll databases contain information on millions of payments and personnel changes spanning years. Procurement systems record every contract, bidder, amount, and execution period. These are databases with a level of detail and coverage that few surveys can match. This data can help answer key questions for public management.

• Why is personnel spending increasing?
• Which institutions have the highest employee turnover?
• Are public procurement processes being used correctly?
• Where are the main bottlenecks that delay the implementation of a policy or the delivery of a service?
• In which areas can government effectiveness be improved?

Experiences in different countries reveal similar challenges. Sometimes the information is scattered across different platforms that don’t communicate with one another. Other times, the data exists, but the capacity to analyze it does not. And in many cases, the biggest challenge is not technical but political: having evidence does not mean it will influence decisions.

The good news is that this is changing. More and more governments are demonstrating that it is possible to transform the data they already generate into useful information and improve public management. 

At the IDB, we are working with several governments in Latin America and the Caribbean to make better use of the data generated by their administrative systems. Analyzing this data helps identify where resources are concentrated, which institutions face the greatest challenges, and which processes cause delays or cost overruns. This information helps improve the internal functioning of the government and guides decisions that strengthen policy implementation and the delivery of public services.

For example, payroll data makes it possible to track millions of personnel changes over time. With this data, it is possible to determine whether spending is increasing because there are more civil servants or because salaries are rising, to identify institutions with high turnover, to anticipate waves of retirements, and even to compare the composition of the public workforce with that of other countries. In one of the countries we analyzed, an analysis of this data estimated that better allocation of administrative staff in a single sector could generate savings equivalent to about 0.4% of GDP. In addition to reducing costs, a more strategic distribution of staff improves the efficiency of public service delivery.

Public procurement systems record millions of transactions each year. By analyzing them, it is possible to detect hidden patterns in day-to-day management: processes that are unnecessarily repeated, significant price differences between similar products, a concentration of awards among certain suppliers, or the splitting of contracts to avoid more competitive procedures. In one of the countries we work with, the analysis showed that procurements made below a regulatory threshold increased 4.3-fold in just a few years and were unusually concentrated just below that limit. Without data analytics, that pattern would have remained hidden. And if a pattern remains invisible, it can hardly be corrected. Adjusting these distortions creates fiscal space for public goods and services.

Surveys of public servants complement administrative data because they help us understand not only what is happening, but also why. Together, both types of data offer a much more comprehensive view of how public organizations function. The latest survey conducted in Chile in 2023 gathered input from more than 26,000 public servants—a scale that made it possible to understand aspects that administrative records alone cannot explain. The results showed that, although 84% perceive performance as important for promotion, only 39% believe there are good opportunities for professional development within their organization.

Governments will continue to invest in digital transformation. In the region, these systems encompass functions that account, on average, for 79% of public revenue and at least 40% of central government spending. However, having more systems does not guarantee better decisions.

The next step for most governments is to use the data they already have—on payroll, procurement, and human resources—to answer specific questions, turn that information into action, and improve the monitoring of their policies. Better internal processes are the foundation for implementing better policies and providing quality public services to citizens. Here’s a question to get you started: What decision is your institution making today without looking at data that’s already in its own systems?

For those who want to put this approach into practice, join ImplementaLAC: it offers tools and resources to help. ImplementaLAC is the IDB’s free platform for public servants in the region who want to move from idea to action. It’s a great place to start: you’ll find a workshop on how to use data to improve public management.