Efficiency of Public Investment in Peru and Proposals for its Improvement

Velásquez Jara A. · Proceedings of the LACCEI international Multi-conference for Engineering, Education and Technology (2024) · DOI: 10.18687/laccei2024.1.1.863

Resumen

To achieve better levels of economic development, both private investment and public investment play a primary role, and the most complete theoretical developments indicate the importance of carrying out Pre-investment studies in the projects that are proposed to be developed, in order to ensure the quality and efficiency of investment expenditures. In the Peruvian case, investment decisions in the public sector have been subject to rules and procedures that have presented appreciable variations in the present century. In the first stage, there were regulations that recognized the importance of the Benefit-Cost Analysis. (BCA) to define investment proposals. Subsequently, starting in 2016, the regulations and procedures were modified, weakening the requirement to apply the BCA, and a set of criteria were established, focused on closing gaps and concordance with national, regional and local objectives, complemented with economic, financial, social and institutional criteria, not including the BCA requirement. Regarding the magnitude of the budgets for public investment projects, at the 3 levels of government, assigned in recent years, an inconsistent behavior can be seen, with significant positive and negative variations in annual allocations, raising doubts upon doubts. on the maturity or stability of budget allocation procedures. It has been found that in the 2022-2025 Infrastructure Plan, approved by DS No. 242-2022/EF, and complementary regulations, a methodology for prioritization is established in the case of projects to be developed in the Public-Private Partnership (PPP), that contains concepts such as: Linkage with national plans or sectoral strategic plans, impact on the Sector's budgetary capacity (temporality), progress of projects in the PPP phases, demand for public resources, generation of synergy with existing projects, level of risk transfer, capacity to measure the availability and quality of the service, project size and others, omitting the requirement to have Pre-investment studies that allow determining, through BCA, the financial profitability and social profitability of the projects proposed. Then, 4 cases of public investment projects executed in recent years, or currently being executed, are reviewed, appreciating that in these cases the objectives of economic efficiency and the protection of the public interest are not being achieved, as a consequence of defective pre-investment studies or in some cases due to the lack of them. It is concluded that, in the last two decades in Peru, due importance has not been given to carrying out solid Preinvestment studies with their corresponding BCA, both in the case of the Public Investment Projects (PIPs), and in the case of the projects that are carried out. through PPP, there being the possibility that the inclusion of new projects, without further prior studies, in future National Plans, means promoting investments whose quality and profitability has not been carefully analyzed. Finally, it is recommended to review the selection procedures of PIPs, in order to require compliance with the Pre-investment phase, applying the BCA or alternatively the Cost Effectiveness Analysis (CEA), in every project with a significant investment amount. This requirement is so important that it even deserves to be included in the Constitution of the Republic. It is also recommended to establish the types of projects to which to apply BCA and the projects in which to perform CEA.

Instituciones: Universidad Ricardo Palma