Unleashing Central America's Growth Potential : Costa Rica

Costa Rica has seen remarkable social and economic progress over the last three decades, with income per capita doubling, and well-being indicators reaching levels comparable with countries of the Organization of Economic Cooperation and Development (OECD). Nevertheless, the country still faces substantial challenges if it is to continue advancing toward higher living standards. The objective of this study is to investigate the drivers and constraints of growth and productivity in Costa Rica and explore areas with high growth potential. This study contributes to the existing body of work on Costa Rica by employing a wide range of analytical tools to analyze the growth performance of the country from different angles. The analysis employs several quantitative methods to provide an objective assessment of the drivers and constraints of growth in Costa Rica, including the long-term growth model (LTGM), computable general equilibrium model (CGE), growth diagnostics and product space analyses. The novelty of this study is that it employs the same framework, analytical tools and data to conduct a parallel analysis for each Central American country to allow for a cross-country comparison. Given the wide breadth of the study, in terms of the methodologies used, themes analyzed, and countries covered, it does not envisage to deep dive into each driver and constraint of Costa Rica's growth to provide granular policy recommendations