By: Staff Writer
May 5, 2026
The Latin American and Caribbean (LAC) region suffers from weak institutional capacities, and ineffective governance said the Economic Commission for Latin America and the Caribbean (ECLAC).
In a recent report, “Overview of Public Management in Latin America and the Caribbean, 2025” the regional development agency said that they have continued to refine their analysis of the fundamental development challenges facing the region in the 2020s. “That analysis identifies three mutually reinforcing development traps which, to varying degrees, affect all the countries of the region: (i) a trap of low capacity to grow and transform; (ii) a trap of high inequality, low social mobility and weak social cohesion; and (iii) a trap of weak institutional capacities and ineffective governance.”
The present edition of the Overview of Public Management in Latin America and the Caribbean comes at a critical moment for Latin America and the Caribbean. The region is facing a structural development crisis composed of three interconnected traps: low capacity for growth; high inequality, low social mobility and weak social cohesion; and weak institutional capacity and ineffective governance. Overcoming these traps requires more than technical reforms: it requires innovation in the very manner of governing. The document’s key strategic axes are summarized below.
The report continued: “The traps persist even after decades of progress in many economic and social dimensions. For example, between 2014 and 2023, the region’s annual economic growth was just 0.9 percent— half the 2.0 percent rate recorded during the “lost decade” of the 1980s, which was largely due to the external debt crisis. It is this Commission’s view that a second lost decade is currently under way in the region. This sluggish growth is not just an economic matter; it is compounded by a slowdown in the robust pace of poverty reduction observed in the region since the 1990s, the worst rate of job creation seen in recent decades, and limited fiscal space due to low tax revenue.”
The Public Management landscape in the LAC is also changing and now centres on leveraging state innovation to navigate polycrisis,, aiming to build more resilient, efficient, and people-centered administrations. Key themes include digital transformation (AI adoption), strengthening institutional capacity against corruption, and enhancing trust.
The report added: “These regional factors, which impede progress towards a more productive, inclusive and sustainable development model, interact with recent changes in the global economy and the geopolitical landscape to create new challenges for growth, development and efforts to overcome the traps and their vicious circles. These changes include geopolitical uncertainty, rapid technological change, increasingly frequent climate shocks and growing public antipathy towards State institutions. The confluence of all these factors has brought Latin America and the Caribbean to a historic crossroads in 2026, with States facing ever more complex demands: they must respond to urgent needs in the immediate term without losing sight of long-term objectives as they steer the transformations that would restore rationale, legitimacy and purpose to development processes