Institutions for Development: How the Quality of Public Management Determines Economic Performance

Introduction: The contemporary debate on sustainable economic growth highlights that formal institutions require an operational transmission channel to impact macroeconomic aggregates: the efficiency of public management. In Latin America, chronic institutional weakness and lack of administrative continuity undermine market confidence and hinder a stable GDP growth path.

Objective: To analyze the transmission mechanisms through which public management quality and institutional strength determine economic performance, with emphasis on emerging economies in Latin America.
Methods: A qualitative systematic review was conducted under the PRISMA 2020 statement. A search was performed in Scopus, Web of Science, and SciELO, selecting 26 high-impact articles published between 2020 and 2026. The analysis was structured around three dimensions: regulatory governance, civil service professionalization, and capital expenditure efficiency.
Results: Bureaucratic simplification reduces transaction costs and increases total factor productivity. Merit-based systems and Weberian administrative stability are positively correlated with government effectiveness and investment attraction. Transparency and competition in public procurement condition the return and the multiplier effect of capital spending on GDP.

Conclusions: The quality of state management is the driver that translates institutional rules into economic competitiveness. Second-generation reforms in Latin America must move beyond a procedural approach, articulating bureaucratic efficiency with productive development and sustainable economic growth.

Keywords: Public management; Economic growth; Transaction costs; Meritocracy; Latin America.