This year, Costa Rica improved in the Index of Economic Freedom, which is published in January of each year by the Heritage Foundation and The Wall Street Journal.
According to the report, Costa Rica ranks 49th in the world among a total of 179 countries. In 2011, Costa Rica earned 67.3 points out of 100, which is 1.4% higher than the 2010 score of 65.9 points. Costa Rica also ranks 9th out of 29 countries in the South and Central America/Caribbean region, and its overall score is higher than the global and regional averages. The top three spots in 2011 go to Hong Kong, Singapore, and Australia.
The score of each country is the result of the weight of 10 categories, ranging from intellectual property to corruption.
As for the evaluation of Costa Rica, it improved in five categories: trade freedom, monetary freedom, property rights, freedom from corruption, and labor freedom. The biggest improvement was in the category of property rights in which the Heritage Foundation says: “The judicial system can be slow and complicated. Contracts are generally upheld, and investments are secure, but it takes an average of more than 1.5 years to resolve a contract-related legal complaint.”
There was no change in score for the categories of investment freedom and financial freedom while there was a small drop in the categories of business freedom, fiscal freedom, and government spending.
The Heritage Foundation and The Wall Street Journal report:
Following the recent years of economic contraction, Costa Rica’s economic rebound has gained some momentum and become more broad-based. The trade regime is more open, and management of public finances is sound. Costa Rica has taken measures to improve financial-sector freedom by consolidating private banks, easing procedures for the operations of foreign banks, and introducing a new development bank structure.
However, lingering government bureaucracy continues to discourage dynamic entrepreneurial activity, and privatization and fiscal reform have slowed. The court system, while transparent and not corrupt, remains inefficient, and enforcement is weak.