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For every year since 1996 the World Bank has published a list of Worldwide Governance Indicators. Among the indicators of good governance measured, government effectiveness is considered not only an indicator of good governance but also a strong indicator of a nation’s potential for economic growth and prosperity. Panama places forth in Latin America in government effectiveness. Government effectiveness is a strong predictor of success in investment in Panama business and the Panama real estate market.

Panama

Panama is the land bridge that connects North and South America where the Panama Canal connects Atlantic and Pacific. Panama has untouched rain forest and pristine beaches on both the Pacific and Caribbean coasts. Panama also has a first world infrastructure with the best roads, airports, ports, and telecommunications in Latin America. Panama is currently enjoying an economic boom fueled by foreign investment.

Panama: Government Effectiveness

According to the World Bank, “Governance consists of the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them.”

The following table shows where Panama places in comparison to other Latin American countries ranked by percentile for government effectiveness in the WGI (Worldwide Governance Indicator) survey from 1996 to 2007.

The remainder of Latin America countries fall below 50% in ranking for Effective Government and are not shown. According the WGI website the indicators are based on a wide array or sources. “The aggregate indicators combine the views of a large number of enterprise, citizen and expert survey respondents in industrial and developing countries. The individual data sources underlying the aggregate indicators are drawn from a diverse variety of survey institutes, think tanks, non-governmental organizations, and international organizations.”

Government Effectiveness and Panama Success

Panama places forth in all of Latin America in having an Effective Government according to the World Bank’s Worldwide Governance Indicators. Panama has seen a continuing economic expansion, a high rate of foreign investment, and a steady increase in property values over the last decade. It is no coincidence that Panama is in the midst of an economic boom and that Panama rates high in Latin America with an effective government.

In 1992 Panama chose to rid itself of a standing army which has previously been the instrument of political coup d’états. Panama has the highest per capita rate of foreign investment in Latin America. The Panama Canal Authority just received an increase in its bond rating from Moody’s. Panama’s housing boom is at least partly due to a farsighted policy of subsidizing low cost mortgages.

Expect to see Panama’s open and stable political system continue to help promote economic prosperity, success in real estate investment, and investment by Panama in its infrastructure in the future. This democratic country has strong economic assets and, well governed, will exploit these assets to the good of its citizens and those wise enough to invest in Panama’s future.

If you are interested in investment in real estate in Panama come to see us at ABPanama. We have over 23 years experience managing real estate portfolios and would be pleased to help you.