Latin America and the Caribbean’s Challenge to Reach the MDGs: Financing Options and Trade-offs

The present study analyzes the determinants of improving outcomes in education, health and basic sanitation and the macroeconomic trade-offs caused by scaling up public spending for the Millennium Development Goals (MDGs), using an integrated modelling approach. At variance with other assessments, the analysis shows that most countries in Latin America and the Caribbean are “off track” towards many of the goals. The study shows that while achieving the goals is affordable for most countries in the region, governments will need to put greater emphasis on tax reforms to mobilize resources for increased social spending while avoiding undesirable macroeconomic trade-offs.