Multi-dimensional Review of Panama

Volume 2: In-depth Analysis and Recommendations

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Panama has achieved socio-economic improvements in recent decades thanks to strong economic growth and consequent poverty reduction. Its growth model is characterised by a dual economy in which a small number of activities, including those related to the Canal and Special Economic Zones, have exhibited high productivity growth but limited job creation.

Panama should now embark on a new reform agenda to become a sustainable and inclusive high-income country. This report urges greater productivity in sectors that contribute to job formalisation to reduce disparities in income and among regions. As developing these policies requires further resources, taxation system and private sector involvement through public-private partnerships should also be reinforced. Focusing on skills and jobs, regional development and development financing, the volume provides analysis and recommendations on three areas which are key for Panama.



Strengthening regional development policy to boost inclusive growth

OECD Development Centre

This chapter explores how regional development can be a lever to help Panama continue on its growth trajectory and achieve more inclusive socio-economic outcomes. It discusses Panama’s current multi-level governance architecture, identifying where it should be strengthened to better support the design and implementation of regional development policy. In addition, it evaluates the need for a more strategic approach to regional development and greater capacity in subnational finance, institutional co‑ordination, and quality public service delivery, at all levels of government. A special focus is placed on Panama’s local authorities in light of specific resource challenges and the 2014 decentralisation reform. Finally, the chapter looks into what would be necessary to achieve a strategic shift towards a “place-based” policy approach for regional development, and provides recommendations for action.



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