"In our knowledge society, research universities are key actors that can make national innovation systems more competitive. This task, however, is not easy in some Latin American countries and not only because they have a significantly lower per capita GDP than those countries with the top 100 universities. Building research universities implies concentrating funds in a handful of institutions. In a context of scarce resources and a mass education policy, this funding design may exacerbate conflict in the allocation process. So, from a political perspective it is not as feasible for Latin America to build world-class universities."
Of course, the allocation of scarce resources creates political problems for the funding of education at all levels everywhere in the world. One possible solution is to take away the annual budgeting allocation for education from the political process. For example, education could be funded by a law that states that X percent of annual tax revenues from _________ will be placed in a trust to fund education, such trust to have the explicit purpose of funding universities or primary school education. Preferably the trust would be administered by an independent board with lifetime appointments. Few countries use such an approach, but it might improve the allocation process. The debate on such a law in any country would be interesting to watch.
Note: Paraguay is using a similar approach to fund primary school education.