Why have Panama and Costa Rica fared so much better economically and socially than the rest of Central America?
Seth Harris, lives in Costa Rica
It’s got a lot to do with Economic Freedom.
Let’s take a look at the rankings for Central America, as provided by the Heritage Foundation.
Panama, 67.0 (54th Worldwide)
Costa Rica, 65.6 (57th)
Guatemala, 63.4 (73rd)
El Salvador, 63.2 (75th)
Honduras, 60.6 (94th)
Nicaragua, 58.9 (100th)
Belize, 57.1 (116th)
So we can see that Panama and Costa Rica have the best economic freedom ratings for Central America. But what does this mean?
Basically, economic freedom is the opportunity for people to buy and sell services and products without excessive government intervention, such as heavy regulations or high taxes. Costa Rica and Panama are ranked as Moderately Free, which means that they’re halfway decent in terms of freedom.
Both also benefit from unique resources, with Panama having the Canal and Costa Rica having an incredible biodiversity.
They can also afford to spend more on public works than other countries, as they both do not spend money on a military.
It’s for these reasons why the one of the best Universities in Central America is in Costa Rica.