Powering progress: How Digital Public Infrastructure is transforming Latin America and the Caribbean

As the digital revolution sweeps across Latin America and the Caribbean (LAC), Digital Public Infrastructure (DPI) is at the heart of this shift. DPI refers to the essential systems that make digital services accessible to everyone. It’s the common digital plumbing that supports digital identities, payment systems, and data-sharing networks. But how is the LAC region progressing in building these critical digital services?

This blog provides a snapshot of the key insights from a joint report developed by the World Bank Group and the Inter-American Development Bank (IADB). The report delves into the specific context of DPI in LAC, highlighting its importance, current status, and the challenges and opportunities ahead.

What is it?

The DPI approach focuses on building foundational digital building blocks for public benefit. This can include systems—like digital identity, digital payments, and data sharing—that underpin many digital transactions across the public and private sector. Rather than reinventing the wheel for each new digital service, DPI provides shared, interoperable assets that service providers can use and innovate on top of. Unlike previous waves of digitalization, the “public benefit” nature of the DPI approach emphasizes strong governance and a user-centric design to protect people’s rights and data.

Figure 1: What is different about DPI

How we gathered the insights

To understand how DPI is evolving in LAC, we conducted surveys and interviews with policymakers and digital leaders from a sample of 18 LAC countries, all of whom are driving digital transformations in their respective regions. The findings provided a snapshot of the diverse stages of DPI implementation. For example, while 88% of respondents were aware of DPI, many were only recently introduced to the concept, illustrating its novelty.

Maturity of DPI in LAC

The report reveals that while DPI is not yet explicitly reflected in most national digital strategies, its importance is growing. Digital maturity levels vary widely across LAC: some countries are just starting their DPI journey, while others, like Brazil, have advanced systems like the PIX payment platform. For example, in June 2024, Brazil's new National Digital Government Strategy prioritized DPI development and implementation. However, in many countries, the existing basic DPI systems are often underutilized, reflecting a wide range of progress.

Figure 2: LAC DPI systems 

Connectivity and data infrastructure

For DPI to function effectively, it requires robust physical infrastructure, including backbone networks, backhaul and last-mile connectivity, and data storage and computing capacity. While the term DPI is new in LAC, the foundation for its components has been laid over several years. The region has made significant progress in establishing the connectivity and data infrastructure required to support DPI, placing it ahead of many other developing regions. However, challenges persist in extending these networks to underserved rural and low-income areas.

DPI with LAC characteristics

While LAC’s approach to DPI aligns with emerging international norms, the region has several unique strengths. One notable example is the social assistance sector, where LAC countries have been pioneers, operating large-scale cash transfer programs. In Colombia and Brazil, a building block approach has streamlined data access and validation across multiple databases, speeding up and improving eligibility assessments. In Chile, digital ID systems enhance access to beneficiary records. Direct deposits into bank accounts, coupled with instant payment systems, have reduced the need for cash handling. Another example is the growth of cross border DPI services within LAC. Supported by knowledge sharing among digital government agencies, countries within regional groupings like Mercosur and Alianza del Pacifico are now actively piloting cross border authentication methods for their citizens.

The challenges (and opportunities)

Despite the progress made, several challenges hinder the widespread adoption of DPI in LAC.

1. Lack of capacity: Government agencies often lack the technical expertise and resources needed to design and implement DPI. This issue is exacerbated by constrained budgets and the difficulty of retaining skilled staff in the public sector.
2. Low citizen trust: Public trust in digital services remains low in many places, due to concerns over data privacy, security and reliability of systems, which limits uptake Building trust will require addressing these concerns.
3. Affordability and accessibility: The high cost of devices and internet services is a significant barrier to digital inclusion. Ensuring that DPI is accessible to all citizens, regardless of income or location, is essential for its success.
4. Regulatory and policy challenges: Existing procurement and budgeting processes may not be conducive to the development of DPI. Governments will need to review and adjust their regulations to facilitate DPI adoption, including considering the use of open-source software where appropriate.

Figure 3: Most cited barriers to the deployment of DPI in LAC

Recommendations for advancing DPI in LAC

The report offers several recommendations to overcome these barriers:

• Boost connectivity: Invest in physical infrastructure to support DPI, ensuring all regions, including rural areas, are connected.
• Build government expertise: Enhance technical capacity in government agencies to design and manage DPI systems through regional knowledge sharing and specialized training.
• Promote trust and inclusion: Enforce strong data privacy and security standards to build trust, while ensuring DPI is inclusive and accessible to all.
• Encourage innovation and partnerships: Foster public-private collaboration and explore open finance schemes to scale and improve DPI.
• Adopt modular design: Create DPI systems that are modular and reusable across sectors to boost efficiency and save costs.

Conclusion

The future of DPI in LAC is bright but realizing its full potential will require effort from all sectors—public, private, and civil society. While the region has laid the groundwork for effective DPI, challenges remain, from varying levels of digital maturity to deep-seated implementation hurdles. But these barriers are not insurmountable. By tackling them head-on, LAC can unlock DPI’s transformative potential, driving inclusive growth that reaches every corner of society. The digital future is within grasp, and with the right steps, it can become a reality for all.

Want to learn more? Download the full report here and explore how DPI can transform Latin America and the Caribbean.