El progreso acaricia tus lares: The Republic of Panama’s Fiscal and Institutional Decentralization

Abstract

This research aims to provide a deep, yet widely accessible, analysis of the detrimental effects that arise from Republic of Panama’s institutional centralization. Specifically, looking into the asymmetric development of peripheral localities relative to central cities (due to a lack of economic and political autonomy) that arises from the country’s unitary institutional organization and the resulting overpopulation of central cities as contributors to national socioeconomic inequality. In exploring proposals, this research attempts to provide a general understanding of the issues that arise form institutional hyper-centralization to, after presenting the long-standing historical and cultural entrenchment of Panama’s centralized nationalist system, establish Panama’s ongoing institutional issues and their relation to institutional centralization. Finally, after exploring the issues that arise from centralization and its entrenchment in Panama’s society, this research proposes addressing said issues through the adoption and implementation of a semi-federal decentralized institutional system, considering the caveats and limitations this entails. In response to the issues that arise from institutional centralization, through a set of retroactive and proactive corrective measures, the implementation of a decentralized semi-federal system would help boost national socioeconomic development, particularly in peripheral localities, and reduce the detrimental effects on the long-standing nationalist governmental structure, particularly with regards to the power given to the Executive Branch.