7 - Government Spending and Structural Bottlenecks

Summary

This chapter provides a comprehensive framework to understand and quantify structural bottlenecks in a setting of multidimensional sustainable development. First, we formalise the idea of an idiosyncratic bottleneck when thinking in a hypothetical situation where a government has all the necessary resources to guarantee the success of its existing programmes (i.e., the budgetary frontier). Second, we compare the development gaps between the baseline and counterfactual outputs to assess how sensitive are the different indicators when they operate at the budgetary frontier. Third, we combine this information with the historical performance of indicators to develop a methodology that identifies idiosyncratic bottlenecks. Finally, we elaborate on a flagging system to differentiate between idiosyncratic bottlenecks according to the ‘urgency’ to unblock them.