| Peru's "National System of Public Investment" (SNIP) focuses on optimizing the use of public investment, as a way to promote the designing and implementation of long-run continuous and self-sustainable projects. This research analyzes whether the SNIP is achieving its objective of reducing poverty in Peru. This study uses OLS regression analysis to estimate the importance of factors associated with high or low rates of poverty at the state level, focusing on public investments made in the last 5 years in all 24 states in Peru. It finds that public investment per capita and education level are statistically significant explanatory variables of poverty in Peru. However, the positive effect of public investment on poverty is very small. This suggests that public investment in Peru is not being efficiently executed.;Although further investigation is recommended when more data become available, this finding raises a red flag for the national and sub-national governments. They both are responsible for the efficiency of public expenditures and thus, should work together on addressing any political issue that might be undermining the SNIP's success. |
