By Date

Having access to credit is essential for households to address the volatility of their personal finances over time and for firms to fund their investments. Accessing financial services at affordable cost on the other hand, is crucial to ensure financial security of all economic units. Despite recent improvements, there are still large financial inclusion disparities in Costa Rica, notably across regions, by gender, and size of firms. This paper discusses policy reforms that would reduce these disparities. Some of the key policy priorities are to improve transparency by strengthening the credit registry and allocating the development banking credit more effectively. Enhancing financial literacy could help avoid excessive consumer indebtedness. Technological innovation would also help Costa Rica: granting FinTech start-ups direct and full access to the state-of-the-art electronic payments system would increase competition, reduce transactions costs and ensure financial inclusion for all.

This review of Corporate Governance in Costa Rica was prepared as part of Costa Rica’s accession process for OECD membership. During the three-year period of the review, the government made substantial progress in strengthening its institutional and legal framework in line with the G20/OECD Principles of Corporate Governance and OECD Guidelines on Corporate Governance of State-Owned Enterprises (SOEs). The report evaluates Costa Rica’s corporate governance policies and practices for both listed and state-owned companies. It finds that while Costa Rica’s capital market is quite small, its framework for corporate governance of listed companies is largely consistent with the Principles. Costa Rica has seen particular progress in issuing a new corporate governance code and requirements related to ownership disclosure. For SOEs, which play a key role in the Costa Rican economy, the Presidency has taken important steps to establish a co-ordinating unit which has spearheaded numerous reforms. These reforms include issuing a government ownership policy, more transparent and structured appointments of SOE board members (while removing politicians from boards), and reporting on SOEs’ performance. To further strengthen SOE performance and accountability, the report recommends additional steps to improve board practices, clarify performance objectives and implement International Financial Reporting Standards.

This paper studies the potential drivers of governments’ approval rates in 18 Latin American countries using Internet search query data from Google Trends and traditional data sources. It employs monthly panel data between January 2006 and December 2015. The analysis tests several specifications including traditional explanatory variables of governments’ approval rates – i.e. inflation, unemployment rate, GDP growth, output gap – and subjective explanatory variables – e.g. perception of corruption and insecurity. For the latter, it uses Internet search query data to proxy citizens’ main social concerns, which are expected to drive governments’ approval rates. The results show that the perception of corruption and insecurity, and complaints about public services have a statistically significant association with governments’ approval rates. This paper also discusses the potential of Internet search query data as a tool for policy makers to understand better citizens’ perceptions, since it provides highly anonymous and high-frequency series in real-time.

Regulations of product markets serve legitimate objectives but, when ill-designed, can impose unnecessary restrictions on competition, and therefore on business dynamism, productivity and ultimately well-being. A recent update of the OECD’s Product Market Regulation indicator for Costa Rica shows that there is ample room to improve regulations. Costa Rica’s economic development is hindered by heavy state involvement and high barriers to entry, compared to both OECD countries and regional peers. This paper discusses options to improve product market regulations, based on international best practices. Regulatory reform can improve consumer welfare by boosting competition and thus lowering prices of key goods and services, which in turn increases the purchasing power of low-income households and reduces poverty. By raising productivity, stronger competition will also allow higher wages. Reducing barriers to entry can facilitate firm creation, boosting investment and jobs.

Gender equality and women’s empowerment can only be achieved if countries take action to tackle and eliminate discrimination in their legal frameworks, social norms and practices. The SIGI 2020 Regional Report for Latin America and the Caribbean provides new evidence-based analysis on the setbacks and progress in achieving gender equality between 2014 and 2019. The report uncovers discrimination in social institutions faced by Latin American and Caribbean women in various dimensions; within the family and household context, in relation to physical integrity and access to productive and financial resources, as well within the political and civil spheres. It also explores various development perspectives such as the cost of discriminatory social institutions for Latin American and Caribbean countries and the socio-economic consequences of the COVID-19 pandemic for women and girls. Building on the regional and sub-regional analysis of how discriminatory social institutions continue to hinder efforts toward SDG 5, the report provides a set of policy recommendations to reshape gender norms, promote women’s empowerment and build a truly inclusive society.