Editorial: A Review of the Legislative Model and How it Influences Businessses in Costa Rica

By: Federico Jankilevich

Copyright 2017 – All Rights Reserved

Historically, the Legislative Assembly has been secondary to the Executive. When reviewing the Legislative Debates of the Second Republic, its possible to reminisce a system of Checks and Balances where the Executive Power had the lead in terms of leverage. The founding fathers of the Second Republic, during the debates of 1949, took distance from this model granting the Legislative Branch of government more discretional power. In most instances of the debates, through the process of historical and parliamentary review, its possible to infer scientifically that the Executive Branch became more limited and the Legislative branch less limited as a result of the Constitutional Reform.

The present model of Checks and Balances in Costa Rica is a result of a series of decisions, where the followers of this ideal, during the past fifty years have tended to limit in one way or another the Executive Branch: The Executive Branch tries to fight back and the Legislative Branch and there is a cyclical a tug war with the Executive for leverage of balance in the upper spheres of political power.

As a consequence of the above, the past decade in Costa Rica has seen a political increase at the Congressional level in terms of discretion and manoeuvrability. Presently, Costa Rica is Congress- Centric: Most of the power base resides in the Legislative Branch of Government. Academics and politicians in Costa Rica have said at times that we don’t have enough Congressmen to represent the people, but its important to restate and highlight the fact that Congress has, if not significantly by a far margin, more leverage and authority than the Executive Branch:

Since the founding of The Second Republic, it can be inferred from historical and statistical data that there has been a gradual shift from a Presidential focus of power, towards a Congressional focus of power. The gradual shift decentralises Executive power and centralises Legislative power in the model of checks and balances. Therefore, its important as a legal practitioner to ponder whether this renders the country more or less efficient in terms of competitiveness for the commercial sector.

A recent study by the Political Science Studies Research Center at the University of Costa Rica concludes that the model is more inefficient not less. The recent findings convey that citizens perceived the electoral system in place as:

1.- Not one that can be trusted

2.- One that yields a slower response to citizen demands that would be expected

3.- One that lacks accountability mechanisms

This affects companies and competitiveness in ways that not only Small and Medium-Sized businesses have witnessed during the last few years, but in a way that can contribute, among other things, to local market desertion of overseas companies that constitute foreign direct investment for the nation. The plant reduction at Intel and the cease of operations at Bank of America serve as a practical mental exercise for the matters in question:

1) There were Operational decisions to be taken in the short-term

2) The MNC and the Government chose not to renew the agreement

3) The companies left the country

Even though the ulterior motives of how these two Multi-National Corporations left the country are reason for a different article, they can help to highlight that in the long-term a less bureaucratic Legislative Assembly can yield faster results and strengthen the confidence of foreign investors, improve the quality of the companies that arrive to the country and increase their length of stay. In this sense, its only worthwhile and sensible to propose a technically viable solution.

Local academia suggests that tackling the electoral system is essential. While changing the electoral system might sound like an interesting long-term solution, in the short-term there are also a series of challenges that must be confronted if this proposal is to become realistic in the mid-term or the long-term: 1) The transitional adjustment makes the Parliament less efficient instead of more efficient 2) An increase in representation as a percentage of the total population would mean a need for greater consensus instead of less when debating new laws 3) A change in the Electoral System implies a review of the transparency process and may in the short-term affect the stability of our democratic institutions.

Thus, it can be inferred that even when for the long- term a new electoral system can be a plausible scientifically-accurate solution, there are daunting challenges and inherent risks involved. While more representation may mean a win for democracy, this might not be so for Small businesses, Medium-sized Enterprises, Multi-National Corporations and, most importantly, the stability of our economy as a whole. More transparency can sometimes mean less efficiency and less competitiveness. It may also mean more bureaucracy in the decision-making process.

Therefore, while the proponents for a new electoral system advocate for a reform with statistical figures about the per capita ratio of representation and the number of elected officers that is due per population density accrual for determined geographical regions of the nation, its important to remember Costa Rica’s political tradition and the results that have taken place. In conclusion, for the short-term, less economic impact and less reform is mostly better than more.

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