Costa Rica is one of the longest standing democracies in Latin America. It is a politically stable, peaceful country with no army (its army was abolished in 1948, after a six-week long civil war). Costa Rica was an exception case in Central America throughout the bloody civil wars in Guatemala, El Salvador, and Nicaragua—during that period, regular elections continued in Costa Rica and daily life was as free from strife as it ever was. In 1987, President Oscar Arias was chosen Nobel Peace Laureate for his persistent and courageous efforts to bring peace to Central America. In 2006, he was elected President of Costa Rica a second term (presidents serve four-year terms but can be elected for a second, non-consecutive term). Today, President Arias continues his efforts to promote peace in many areas of the world; on more than one occasion, he has—in laudable if quixotic fashion—attempted to convince other nations to abolish their armies too.

The federal government is made up of four branches: the executive, legislative, judicial, and electoral (more about this last branch shortly). The four branches operate together in a checks-and-balances system similar to that of the United States. The president and two vice-presidents, along with cabinet ministers appointed by the president and a host of other administrators, compose the executive branch. Voters elect the president by casting a direct ballot, every four years. The Legislative Assembly (Asamblea Legislativa) is the legislative branch; it is composed of 57 representatives, called deputies (diputados), who are elected to represent one of seven provinces; each province is assigned a number of deputies proportional to the size of its population. The Legislative Assembly makes, amends, and repeals laws, including tax laws. A key component of the judicial branch is the Supreme Court, with 22 magistrates elected by the Legislative Assembly. There are also a number of specialized courts that deal with constitutional, fiscal, transportation, labor, and family law, to name but a few. The Supreme Election Tribunal, or Tribunal Supremo de Elecciones (TSE), is a forth branch that seeks to ensure fairness in elections. This institution oversees all aspects of voting, from printing and distributing ballots to counting votes.

The Costa Rican political landscape has been dominated for decades by two main parties, the PLN and the PUSC, though party politics seems to have become increasingly fractionalized in recent years, and, today, a number of parties are represented in the Legislative Assembly, including the feisty and perhaps up-and-coming PAC party. The country seems to be on the verge of a political sea change—you won’t have to go far to find a Costa Rican who is fed up with the status quo. It’s time, they say, to repair the shoddy roads, to reform the penal code, to train more policemen, and to throw corrupt politicians out of office. If it’s true that you can hear these complaints in any country in the world, it’s also true that in Costa Rica these complaints have become more frequent and more vociferous in recent years.

If you are thinking about moving to Costa Rica, you will want to know about the degree of political and administrative corruption. The Corruption Perceptions Index (Transparency International) is prepared primarily on the basis of surveys of business people (it also relies on analysis performed by country experts). The 2006 Corruption Perceptions Index ranked 163 countries. According to its rankings, the three least corrupt countries were Finland, Iceland, and New Zealand (each with a ranking of 1). It listed Haiti as the most corrupt country (with a ranking of 163). Costa Rica was ranked at 55, a spot it shares with Namibia. (The U.S., ranked 20, received one of the lowest rankings among the industrialized countries.) Leaving any questions about the validity of these rankings aside, if you talk to businesspeople in Costa Rica, you’ll find very few who have ever encountered a government official who insisted on a bribe as a precondition for performing his job. In Mexico (ranked 70), however, that’s not the case; there, it’s often a case of “no bribe, no go.” That said, it is probably also true, sadly enough, that you will rarely find a government official in Costa Rica who would be offended by an offer to pay him a financial incentive in order to speed up the processing of a permit form.

Although corruption is a problem, both Costa Ricans and foreigners living in the country are perhaps just as concerned about the size and inefficiency of the state apparatus. In 1949, just 6% of the population worked for the government; today, that figure is closer to 25%, which is to say that one in four people receive their check—directly or indirectly—from the government! The state reaches far and wide: Costa Rica’s insurance industry, oil importation and processing facilities, telephone and internet services, port facilities operators, and key components of the banking industry are all state enterprises. And, there are a number of politically agile unions within the public sector that wield the power of autonomous fiefdoms. The money needed to keep all this going (along with interest payments on government debt) absorbs such a large percentage of tax revenue that little is left over for social programs and infrastructure projects. As if that were not enough, the government bureaucracy is notoriously inefficient. Legislation moves exceedingly slowly through the Legislative Assembly; some court cases take years to be resolved; the police respond slowly when they respond at all; you can easily waste an entire day waiting in immigration lines in order to renew your residency documents … and the list goes on.

On a positive note, both government leaders and people on the street are conscious of the pressing need to address these problems. Costa Rica just passed through another important phase of its economic development, that being the ratification of the Central America Free Trade Agreement with the U.S. President Arias made it his personal crusade to have this pact in place and ready for implementation during his administration, and he fufilled his promise. CAFTA promises to facilitate foreign investment, increase efficiency through competition, and reduce import taxes on many products.  

The agreement has also opened up industries such as insurance and telecommunications to private competition.