Public sector spending in Chile is on a rapid upward trajectory that threatens fiscal stability, according to a recent report from the Budget Office (Dipres) analyzed by latercera.com.
Over the past ten years, the size of the state workforce has nearly doubled. The associated fiscal cost has risen from 3.3% of Gross Domestic Product (GDP) in 1990 to a projected 7% by 2025.
This figure represents an annual expenditure of $24 billion. To put this impact into perspective, the amount far exceeds annual spending on healthcare—which stands at $9 billion, excluding personnel costs—or spending on housing, which is approximately $4.5 billion.
Deficiencies in personnel management
Éric Latorre, Master in Government at the Universidad Autónoma de Chile, warned of the lack of efficiency in this spending in an op-ed published in the outlet. Latorre noted that it is difficult to demonstrate public value with this budget due to the absence of robust management systems.
“There is no robust personnel management system, no effective performance evaluations, and no demanding rating mechanisms,” Latorre stated in his analysis.
The expert also criticized the persistence of obsolete structures within the public administration. According to the report, indiscriminate bonus payments and permanent tenure protections remain in place—features he described as characteristic of “a 19th-century state.”
This lack of management directly impacts essential services for citizens. Latorre linked this scenario to the non-GES (Guaranteed Explicit Health) waiting lists, which currently affect 2.7 million people, as well as the stagnation of standardized education test scores over the last decade.
“We are doing something wrong, and we don't want to see it,” the specialist concluded in his critique of current state management.
