Enhancing business dynamism and consumer welfare in Costa Rica with regulatory reform
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.
Published on September 04, 2020
In series:OECD Economics Department Working Papersview more titles