Productivity growth has been improving, but a large gap remains with OECD countries. Bolstering institutional quality and embarking on an ambitious reform agenda are key to bridging the gap and ensuring that growth benefits all Costa Ricans.
- Strengthen the competitive environment by granting the competition authority more independence and resourcing, improving state-owned enterprise governance through greater adherence to the OECD Guidelines on Corporate Governance of SOEs and eliminating unjustified anti-trust exemptions.
- Reduce barriers to entrepreneurship and labour market informality by cutting red tape and establishing a one-stop shop for business registration.
- To address transport infrastructure gaps, improve coordination among the different public bodies by clarifying their mandates and granting authority and control of infrastructure management to a single institution.
- Improve quality and spending efficiency in education by establishing outcomes rather than inputs as the main policy target. Establish performance objectives, and criteria to assess them. Re-balance spending towards early childhood education to improve outcomes. Raise the quality of teachers by improving training and performance incentives, and provide more support to disadvantaged schools.
Source: OECD May 2017 Economic Outlook database
OECD Economic Surveys: Costa Rica 2016. Chapter 2: Boosting Productivity to sustain income convergence.
Pisu M. and F. Villalobos (2016), "Costa Rica’s Infrastructure Challenge", forthcoming.
Monge-González, R.; Torres-Carballo, F. (2014): Productividad y Crecimiento de las Empresas en Costa Rica ¿Es posible combatir la pobreza y la desigualdad por medio de mejoras en la productividad?
Productivity - enhancing institutions
In 2010, Costa Rica established the Presidential Council on Competitiveness and Innovation (CPCI), to co-ordinate policies across institutions. It is composed of three sub-councils – Council on Competitiveness, Council on Innovation and Human Talent, and Alliance for Employment and Development – with representatives from ministries and the private sector; and it has the support of a small technical unit.
Other efforts to improve the coordination and implementation of policies to boost productivity are also underway. These include a draft law to create an agency (Agencia Costarricense de Fomento Productivo, Innovación y Valor Agregado, FOMPRODUCE) with a public-private governance structure, which will centralise funds and functions currently dispersed across several agencies, to facilitate the establishment of businesses and promote innovation.