Oversight That Works

Published on August 13, 2019 / Leer en español

Center for a New Economy

Puerto Rico’s protracted economic depression — and the draconian measures implemented to combat the resulting fiscal imbalances — have eroded the island’s government capacity to perform at all levels and created fertile ground for unscrupulous actors to engage in fraudulent behavior.  Severe austerity programs implemented since 2006 have led to: drastic budget cuts in numerous key agencies, high employee turnover, low morale amongst public servants and limited resources across the board.  Moreover, private contractors have been increasingly employed, and paid tens of millions, to take on public sector responsibilities.

In Puerto Rico where the poverty rate stands at 44% and median income is a meager $19,775, there are public sector contractors who make ten times that amount.  It should not be surprising that in this environment some have leeched on to the government to exploit rent-seeking opportunities.  Austerity programs have also contributed to weak enforcement of transparency and accountability processes.  This complex scenario is a breeding ground for corruption.

The prevailing discontent with Puerto Rico’s political elite and public institutions has been used to justify increased federal intervention in Puerto Rico.  It may be convenient to entertain the simplistic narrative that Puerto Rico’s current condition is solely due to its own misfeasance.  And while Puerto Rican politicians have made their share of mistakes and bad decisions, the blame for its current woes cannot be pinned on Puerto Rico alone.

For decades, the Congressional attitude towards Puerto Rico could be, at best, charitably described as one of benign neglect; and the ravages of hurricane Maria laid bare many of the inequities faced by the residents of the island.  Despite recognizing these imbalances, the prevailing narrative in mainland U.S. circles has focused on chronicles of clientelism, some colored with negative racial and cultural undertones—much like what occurred in New Orleans, in the aftermath of Hurricane Katrina.