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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, the rule of law 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 the rule of law. Rule of law is a strong predictor of success in investment in Panama business and the Panama real estate market.

Panama

Panama is where North and South America meet and where the Panama Canal connects Atlantic and Pacific. Panama has unspoiled natural beauty and a first world infrastructure. There is great real estate available on both the Pacific and Caribbean coasts. Panama has the best roads, airports, ports, and telecommunications in Latin America. Panama is currently enjoying an economic boom fueled by foreign investment.

Panama: Rule of law

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 the rule of law in the WGI (Worldwide Governance Indicator) survey from 1996 to 2007.

The other Latin America countries fall below 50% in ranking for the rule of law 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.”

Rule of law and Panama Success

Panama places forth in all of Latin America in the rule of law according to the World Bank’s Worldwide Governance Indicators. After the deposition of Manual Noriega Panama got rid of its standing military. With the military went a century of coup d’états.  Since the USA turned the Panama Canal over to Panama there has seen a continuing economic expansion in this tropical paradise. Panama retains the highest rate of foreign investment in Latin America. Real estate investment has prospered and real estate values have steadily risen for 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 in the rule of law.

The Panama press has been full of articles regarding crime in 2008 but Panama still ranks the second lowest in murders in Central America after Costa Rica. The press is also constantly full of articles about the perpetrators of fraud being sent to Panama prisons. The national guard and police are a constant presence on Panama City streets.

Expect to see Panama’s good governance and rule of law continue to help promote protect Panama’s drive toward more 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 and regulated, 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.