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Early Childhood Development, Prudent Fiscal Management and Infrastructure Top Ranking of Cost-Effective Solutions to Latin America’s problems

San José, Costa Rica – If Latin American and Caribbean governments had $10 billion to solve their most urgent problems, how should they spend it?

More than 30 renowned economists, along with graduate students from countries throughout the region, today released prioritized lists of 44 programs in response to this hypothetical question.

The economists listed early childhood development programs, prudent fiscal rules and increased investment in physical infrastructure as the three policies that would offer the greatest development impact per dollar spent.

By contrast, 49 graduate students gave top billing to nutrition programs for preschool children, conditional cash transfers for education, and increased access to healthcare.

The proposals were produced by the Consulta de San José, an unprecedented decision-making exercise organized by the Inter-American Development Bank, the Copenhagen Consensus Center, and Costa Rica’s INCAE business school.

Based on a methodology originally applied at the Copenhagen Consensus de 2004, the Consulta de San José consisted of three days of structured debates regarding 44 possible solutions to problems in 10 specific areas. Each participant prioritized the solutions based on his or her assessment of their costs and benefits.

The two final rankings, which represent a median of the individual rankings in each group, were released at a press conference that featured comments by IDB President Luis Alberto Moreno, Copenhagen Consensus Center Director Bjorn Lomborg, INCAE Dean Arturo Condo, and Costa Rica Vice President Laura Chinchilla.

“Our resources are not sufficient to solve all our problems at the same time, so we have to prioritize solutions,” Moreno said via satellite connection from Washington, D.C. “This exercise—and the debate it generates—is an excellent opportunity to discuss how our societies can get more welfare for their money.”

Partcipants heard presentations that summarized empirical data on the costs and benefits of programs and policies that have been carefully evaluated. The presentations were made by scholars specialized in 10 problem areas previously identified in an IDB survey of 1.800 influential Latin American and Caribbean citizens.

The 10 problem areas were education, violence and crime, poverty and inequality, fiscal policy, democracy, infrastructure, forests and biodiversity, employment, public institutions and health.

Moreno underscored that the rankings should not be seen either as a rigid prescription for policymakers or official recommendations of the IDB. “The region’s countries face very diverse problems, and no one formula can be applied universally,” he said. “That is why we think this sort of debate should be repeated at the national level throughout the region.”

Academic experts at the Consulta de San José include Nobel Laureate in Economics Finn E. Kydland, Chilean Finance Minister Andrés Velasco, former United Nations Under Secretary General José Antonio Ocampo, Harvard University professor Ricardo Hausmann, former Director of the United Nations Development Program’s Poverty Group Nora Lustig, and Nancy Birdsall, president of Center for Global Development in Washington, D.C.

“This is a good example of how the IDB’s Research Department can foster serious analysis of Latin America’s main policy issues,” said Santiago Levy, the IDB chief economist.

Commenting on the results, Copenhagen Consensus Center Director Bjorn Lomborg said: “What this list really demonstrates is that there are lots of good solutions to the many challenges facing the region and now, hopefully, policymakers will pay particular attention to the solutions at the top of the list.”


Top 10 proposals in ranking produced by economists

  1. Early childhood development
  2. Fiscal rules
  3. Increase investment in infrastructure, including maintenance
  4. Policy and program evaluation agency
  5. Conditional cash transfers
  6. Universal health insurance: basic package
  7. Nutrition programs for preschool children
  8. Crime prevention through environmental design
  9. Replace taxes on formal employment with other taxes
  10. Adopt policies and services to reduce transaction costs for trade

Top 10 proposals in ranking produced by students

  1. Nutrition programs for preschool students
  2. Nutrition programs for poor children
  3. Conditional cash transfer programs for education
  4. Increase access to healthcare
  5. Improve efficiency and equity of public spending and taxes
  6. Conditional cash transfer programs to combat poverty
  7. Efficiently spend at least 3-6% of GDP on infrastructure
  8. Increase the level of political party and party system institutionalization
  9. Improve performance and cut corruption in regulation, taxation, and government procurement
  10. Adopt policies and services to facilitate trade
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