By Date

This report puts forward policy recommendations for strengthening the performance and sustainability of the health care system in Costa Rica. There is much to praise in Costa Rica’s health care system: institutional stability; a closely integrated but well-differentiated provider arm, with strong primary care; a degree of inter-sectoral co-ordination that serves as a model of good practice; detailed and effective dialogue between users and health service managers; and, innovation around professional roles and the use of ICT that other health systems could learn from. All this leads to health outcomes on a par with several OECD economies. Nevertheless, serious strains are evident: spending is rising steeply, fuelled by salaries, fees and facility payments based on last year’s outlay. These spending increases are not always associated with improvement in services: waiting lists are excessively long and growing. The system is perhaps too stable: institutional rigidity and vested interests have stalled vital reforms, meaning that Costa Rica still lacks systematic application of DRGs and health technology assessment, despite attempts to bring them in.

Costa Rica has recorded many social and economic achievements and currently enjoys one of the highest levels of well-being in the OECD. But progress has come to a standstill in most recent years and challenges have emerged along several social and labour market dimensions. Existing policies are outdated and no longer effective in today’s dynamic, export oriented economy which requires greater flexibility and more high skilled workers. How can Costa Rica better respond to the challenges of technological change and globalisation whilst minimising the transition costs it endures as it moves to a higher and a more sustainable path to inclusive growth? This report provides comprehensive analysis of Costa Rica’s policies and practices compared with best practice in the field of labour, social and migration from across the OECD and other countries in the Latin American region.  It contains several recommendations to tackle key challenges facing Costa Rica, including low labour utilisation, increasing inequality, high poverty and high-risk of economic exclusion especially of the low skilled and migrants.  This report will be of interest in Costa Rica as well as other countries looking to promote a more dynamic and an inclusive economy.

As Costa Rica’s economy has developed in recent decades, the education system that helped propel the country to upper middle-income status now needs reform to respond to rising expectations and changing demands for skills. New challenges are emerging: economic growth has recently slowed, inequality is widening and productivity growth is weak. How can Costa Rica improve both the quality and equity of its education system while also addressing efficiency challenges? This report assesses Costa Rica’s policies and practices against best practice in education from across the OECD and other reference countries in the Latin American region. It analyses its education system’s major strengths and the challenges it faces, from early childhood education and care to tertiary education. It offers recommendations on how Costa Rica can improve quality and equity to ensure strong, sustainable and inclusive growth. This report will be of interest in Costa Rica as well as other countries looking to raise the quality, equity and efficiency of their education systems.

This report is part of a new series of publications entitled OECD Tax Policy Reviews. These country reviewsare intended to provide independent, comprehensive and comparative assessments of OECD member and non-member countries’ tax systems from a tax policy perspective as well as concrete recommendations for tax policy reform. By benchmarking countries’ tax systems and identifying tailored tax policy reform options, the ultimate objective of the reviews is to enhance the design of existing tax policies and to support the adoption and implementation of tax policy reforms. This first edition provides a comprehensive tax policy assessment of Costa Rica’s current tax system as well as tax policy reform recommendations. The report is divided into five chapters, starting with a general chapter providing an overview of key macroeconomic and tax revenue trends (Chapter 1), followed by an assessment of the main types of taxes of the Costa Rican tax system, including corporate income taxes (Chapter 2), personal income taxes and social security contributions (Chapter 3), the general sales tax (Chapter 4) and environmentally-related taxes (Chapter 5)

Interrelations between Public Policies, Migration and Development in Costa Rica is the result of a project carried out by the Centro Centroamericano de Población (CCP) at the University of Costa Rica and the OECD Development Centre, in collaboration with the Dirección General de Migración y Extranjeria (DGME) and with support from the European Union. The project aimed to provide policy makers with evidence on the way migration influences specific sectors – the labour market, agriculture, education, investment and financial services and social protection and health – and, in turn, how sectoral policies affect migration. The report addresses four dimensions of the migration cycle: emigration, remittances, return and immigration. The results of the empirical work confirm that migration contributes to the development of Costa Rica, but the potential of migration is not fully exploited. One explanation is that, despite the acknowledgement of the links between migration and development in recent legislation and policy,  policy makers in Costa Rica do not sufficiently take migration into account in all respective policy areas. Costa Rica therefore needs to adopt a more coherent policy agenda to better integrate migration into development strategies, improve co-ordination mechanisms and strengthen international co-operation, to enhance the contribution of migration to development in the country.

Costa Rica’s successful economic performance and social achievements realised over the last three decades are widely acknowledged. GDP per capita has steadily increased at higher rates than in most Latin American countries as the economy has evolved along its development path from a rural and agriculture-based to a more diversified economy integrated in global value chains. But Costa Rica faces challenges and must enhance and broaden the basis for productivity growth by strengthening its innovation system and enhancing the role of science, technology and innovation in addressing its national development goals.

Costa Rica’s strong agricultural sector is underpinned by the country’s political stability, robust economic growth and high levels of human development.  The sector has achieved significant export success, yet raising productivity and staying competitive in world markets will require efforts to address bottlenecks in infrastructure, innovation and access to financial services.  Maximising Costa Rica’s comparative advantage in higher-value niche products will depend upon more efficient services to agriculture, including better implementation of programmes, improved co-ordination among institutions, and reduced bureaucracy. While overall protection for agriculture is relatively low compared to OECD countries, it is nonetheless highly distorting to production and trade. Managing the transition to scheduled liberalisation presents an opportunity to reform costly policies, and to implement an alternative policy package with new investments in innovation, productivity and diversification, supported by transition assistance where needed. Costa Rican agriculture’s vulnerability to extreme weather events is expected to worsen with climate change, and even while the country is among global leaders in environmental protection, sustainable development and climate change mitigation, further adaptation efforts will be necessary.