Hurting Pockets: A Case Study of Peru's Legal Obligations in Transparency and Justification of Public Expenditure in State Advertising

Abstract

Public procurement of advertising is a matter of constant debate in many countries around the world. At one point in Peru, during 2018, hiring private media outlets to broadcast or publish state advertising was prohibited by law. Taking into account the ensuing controversy in Peru, this study assesses state advertising investment in the South American country, and examines whether certain public entities (government ministries) have complied with the obligations of justification, transparency and prohibitions provided for by the law that regulates state advertising. The findings of this study point to a worrying level of noncompliance. We display these results in a systematized manner and complement them with a qualitative analysis of the justification given by public entities for spending on advertising, as well as the accountability they provide (or should provide) ex-post. This baseline study is essential to identify possible failings in the regulation of public procurement of advertising, as well as the bad practices of the state when budgeting for public expenditure on advertising campaigns. While the case study is based on the Peruvian experience, the findings can be used in many other jurisdictions as a roadmap for avoiding certain shortcomings in the regulation of state advertising.