For several decades, Costa Rica has presented a strong track record of political and economic stability. Building on these achievements, the country will need to strengthen its public governance system to address emerging socio-economic challenges, as well as changes within the political system and in the public administration.

Costa Rica stands out in the region for its political and economic stability. In 1949, the country dissolved its armed forces and adopted a new Constitution. The Constitution fostered broad-based access to education and healthcare, a robust system of checks and balances, and a strong rule of law. Sound mechanisms to oversee state action as well as to protect and guarantee human and democratic rights were progressively installed. Relatively stable, long-term economic growth has allowed for important investments in basic social services, while a good endowment of human capital and natural amenities has further contributed to socio-economic progress. The average life expectancy at birth of Costa Ricans is significantly higher than in other Latin American countries and Costa Rica made important progress on the Human Development Index.

The Republic of Costa Rica is one of the most stable democracies of the Americas. The Political Constitution of the Republic of 1949, including the abolishment of the army, fostered the provision of broad-based access to education and healthcare, as well as the creation of a robust system of checks and balances with a particularly strong position of the Comptroller General and a strong rule of law. Relatively stable, long-term economic growth has contributed to an important investment in basic social services, while a good endowment of human capital and natural amenities has further contributed to socio-economic progress.

This chapter provides an overview of Costa Rica’s recent politico-administrative, socio-economic and demographic changes and describes how these are putting pressure on the country’s governance mechanisms. Costa Rica’s political and economic model has been characterised for decades by high political stability and stable economic growth, allowing the country to perform well on social development deliverables like education and health. However, inequalities are on the rise, important economic pillars like the high-tech industry and tourism have come under pressure, a fragmented public sector is struggling to deliver policies and services effectively, and citizens are increasingly losing trust in public institutions and the political system. This chapter therefore underlines the need to strengthen the country’s governance capacity in different areas.

This chapter analyses the role of the centre of government (CoG) in Costa Rica. The chapter elaborates upon OECD tendencies in this area, which underline a shift from a primary administrative support function for the CoG to a position as strategic player with important responsibilities to foster vision, leadership and innovation across the public sector. Country-specific challenges are identified for Costa Rica and these include the high-level of political and public sector fragmentation, as well as capacity constraints at both the technical and strategic level. The chapter formulates recommendations to strengthen the CoG, which include targeted capacity building, a revised model of co-ordinating the institutionally decentralised sector and the introduction of multi-stakeholder follow-up mechanisms for key policy areas.

This chapter focuses on Costa Rica’s national monitoring and evaluation system. Whereas a clear institutional set-up with a definition of roles and responsibilities for different actors has been developed, the country faces important challenges. These include the need to shift towards a result-oriented monitoring and evaluation culture, a lack of using performance information strategically, a weak alignment of the budget and policy cycle, and certain capacity constraints across the public sector. Recommendations are formulated to address these issues, including the promotion of a balanced set of result criteria, a balanced approach between accountability and learning objectives, further capacity strengthening, and promoting a gradual development of the monitoring and evaluation system.

This chapter assesses Costa Rica’s budgetary governance. Whereas the budget process is well institutionalised and regulated, a number of key challenges have been identified. Challenges include the fact that a large share of the budget falls outside the budgetary process headed by the Ministry of Finance, next to high budget rigidities, a lack of fiscal space and weak fiscal constraints. The chapter formulates recommendations in order to create and ensure fiscal space for government priority spending, align institutionally decentralised institutions with government priorities and ensure fiscal sustainability, allowing the country to finance and implement the priorities set out in the National Development Plan in a sustainable way.

This chapter examines the strengths and weaknesses of the human resources management policies and practices of Costa Rica’s Civil Service Regime. It formulates recommendations in five key reform areas: timely and accurate workforce data; the development of a merit-based, transparent and financially sustainable compensation system; the introduction of a coherent competency framework; an enhanced performance management system; and the development of institutional and individual leadership. The chapter highlights the importance of these reforms to promote better governance and improved public service design and delivery.

This chapter studies reforms to the legal framework and the institutional set up to safeguard the integrity of the procurement process. The chapter examines the functions of the Comptroller General, the Ministry of Finance (Department of Management and Public Procurement) and of specialised units within each institution that are key actors in the procurement process. It also defines opportunities to strengthen the institutional framework as well as priority areas to increase integrity, transparency and accountability. The chapter gives recommendations on how the government of Costa Rica can use public procurement in a more transparent and effective manner to achieve policy objectives, i.e. by creating a public procurement authority or agreeing on a single procurement platform that covers the whole public sector, including the autonomous entities.

This chapter describes the importance of effective and efficient multi-level governance to enhance national development outcomes for citizens and businesses. It highlights that Costa Rica’s multi-level governance is based on a mix of institutionally autonomous and territorially decentralised entities with currently very limited leverage for the latter, given the minimal level of public expenditure at the sub-national level and basic responsibilities in terms of public service production and delivery. It also studies the effectiveness of the Costa Rican constitutional reform of 2001 to allocate more functions and resources to local governments. The chapter suggests ways to improve the delivery of services across the territory, and close the urban-rural gap through the use of contracts to facilitate the functional relation between the central government and municipalities; the creation of a network of community agents providing local government with capacity building; and the introduction of flexibility in the governance system to help tailor policies to places. The