DATA FOR BETTER GOVERNANCE BUILDING GOVERNMENT ANALYTICS ECOSYSTEMS IN LATIN AMERICA AND THE CARIBBEAN MAIN MESSAGES Governments in Latin America and the Caribbean face complex development challenges, from slowing economic growth and inflation to persistent institutional weaknesses across the public sector. Strengthening government functioning to respond effectively to these challenges requires a detailed understanding of what is failing and where. It requires diagnostics based on granular, real-time information and the ability for every public servant to take action. Governments already have the data they need to meet the challenges they face. They have been producing and collecting data in great detail and for many years. But they need to be able to analyze the data they collect in the course of their everyday operations to inform managerial decisions across every government function. For instance, data on recruitment practices can inform human resources management decisions, data on payment delays can improve procurement processes, and data on taxpayer compliance can help design tax instruments. By not taking advantage of the data that are now being collected in digital systems all over the region, governments are leaving substantial amounts of money on the table and diminishing their impact on the lives of citizens. Data for Better Governance: Building Government Analytics Ecosystems in Latin America and the Caribbean provides a conceptual framework and empirical evidence for evaluating how governments use administrative data to improve the functioning of the state, and it highlights opportunities for improvement. Governments in Latin America and the Caribbean are world leaders in the digitalization of government work—but they do not systematically use the data they have collected to diagnose and improve their functioning. This represents a missed opportunity. The report offers governments in this region and beyond a road map for government analytics: repurposing government data to improve the efficiency and effectiveness of each aspect of government functioning. It identifies the critical enabling conditions for government analytics—data infrastructure and analytical capabilities—and it offers strategies for strengthening them. The report draws on data from a survey of government officials from 20 countries in Latin America and the Caribbean who are experts in core government functions and their respective management information systems, as well as 12 case studies of analytical initiatives, to present the following key findings and recommendations. EXPANDING THE USE OF GOVERNMENT ANALYTICS IN LATIN AMERICA AND THE CARIBBEAN The use of analytics in Latin America and the Caribbean varies across government functions and policy areas. There is also significant heterogeneity in the systems and practices used within countries. This suggests that governments lack a systematic approach to analytics for the whole of public administration. This also presents an opportunity for cross- fertilization, allowing countries to share their experiences and adopt successful practices demonstrated by their peers. Governments in the region can use advanced analytics more extensively to address complex development challenges. Governments predominantly use administrative data to produce descriptive analytics for operational and transactional purposes, but they miss out on opportunities to use advanced analytics to improve decision-making, design more effective and efficient public policies, and strengthen public sector functioning and service delivery. The impact of government analytics is already being felt in the region. For example, Ecuador and Peru have collected millions of dollars in additional tax revenue by analyzing transactional and external data to detect evasion and better allocate resources for enforcement. Guatemala has improved education services by analyzing student-level data to identify and support at-risk students, reducing dropout rates by 9 percent for students at a pivotal moment in their education. These examples demonstrate that governments can use analytics to improve many different aspects of their operations, capitalizing on the wealth of data contained in their management information systems. BUILDING ENABLING CONDITIONS FOR GOVERNMENT ANALYTICS Governments must complete the digitalization of their management information systems. Two-thirds of the experts surveyed reported that their systems are not fully digitalized. Levels of digitalization vary substantially by government function: information systems for taxation and public financial management exhibit a relatively high degree of digitalization, while health management information systems have the lowest degree of digitalization. Incomplete digitalization results in data infrastructure problems that prevent governments from fully leveraging their administrative data to improve policy design and implementation. High-quality, integrated data are essential to analytics, but data fragmentation and isolated information systems constrain digitalization. Outdated or inadequate data infrastructure limits the quality and accessibility of administrative data, making it difficult for organizations to use these data for analytics and policy making. When management 2 Data for Better Governance information systems are fragmented, various subsystems operate independently, making it virtually impossible to create a centralized, fully digitalized system. Consequently, data sharing and interoperability between the different systems are restricted, the quality of data available for analytics is compromised, and the available data do not always align with strategic priorities and policy needs. Information systems need mechanisms to ensure the quality of the data they contain. According to the World Bank’s GovTech Maturity Index, only 25 percent of countries in Latin America and the Caribbean have implemented a data quality framework, which is lower than the implementation rate in other regions. When data quality controls are not integrated into an information system, each team using the system’s data must conduct its own quality control process, resulting in inefficiencies. Moreover, the lack of systematic controls can undermine the accuracy, reliability, and replicability of analytics. Improving data accessibility and system interoperability should be a government-wide effort. According to the GovTech Maturity Index, less than 35 percent of countries in Latin America and the Caribbean have implemented a government interoperability framework that allows for efficient and secure information exchange between government systems and organizations. Sharing information enables new and innovative analytical applications: Brazil has repurposed tax data to boost procurement efficiency, reducing purchase prices by about 13 percent. If governments establish the foundational infrastructure for interoperability, they can advance their overall potential for using data for analytics and policy making enormously. Data systems are not enough; public administration must change, too. Governments can systematize the use of analytics in decision-making by incorporating dedicated analytics units into the organizational structure of public administration. In Colombia, for instance, a dedicated analytics unit has supported quality-of-life improvements, information sharing, and public service delivery for the entire city of Bogotá, thanks to its centralized organizational model. On the other hand, relying on part-time teams for analytical tasks can lead to suboptimal outcomes because these teams might prioritize immediate operational needs over broader analytical objectives. INTEGRATING DATA ANALYTICS INTO DECISION- MAKING PROCESSES Analytics is a tool, not a replacement for decision-makers or experience. Analytics cannot replace decision-makers, design policies, or substitute for the experience and knowledge of policy makers and public servants. But officials must be given the ability to use the evidence provided by analytics to guide key decisions, identify gaps and weaknesses, and refine the design and implementation of policy interventions. Training to support decision-makers and data analysts in using government analytics is fragmented and weak across Latin America and the Caribbean. This can be improved rapidly. Main Messages 3 Governments in the region need more structured efforts to attract and retain skilled data analysts at all levels of seniority. Offering career tracks for data analysts is critical to building a robust government analytics ecosystem. Governments in the region face a shortage of structured career development opportunities in analytics: only 12 percent of governments have a dedicated career track for data analysts. Finally, governments must foster a culture of evidence-based decision-making, which is essential to using government analytics to transform public administration. Analytics is more impactful when policy makers ask for the evidence they need and use it to shape policies and inform critical decisions. The region’s governments require a deeper culture of evidence- based decision-making. Knowledge exchange on best practices and successful experiences can increase decision-makers’ awareness of the benefits of grounding policy decisions in data and evidence. Improving decision-makers’ knowledge and ability to comprehend data analytics results—and identify their limitations—is crucial for effectively integrating analytical findings into decision-making processes. Latin America and the Caribbean—and the rest of the world—has the data it needs to improve government. Now is the time to use them. Scan to go to the complete publication. SKU 33763