The Republic of Costa Rica is a politically stable democracy in a region often characterized by volatility at the national and local levels. It has relatively high education and literacy rates and a relatively high standard of living and ranks well on human development and environmental performance indexes. The country is popularly known for its tourism, particularly ecotourism, and for agricultural products such as coffee, bananas, and pineapples. More recently, however, agriculture has been eclipsed by industry, and exports of electronics and pharmaceuticals have found a place in the country’s economy.

Despite booming tourism, the government has struggled with poor performance in other economic sectors, with resulting deficits at the national level. Like many countries, Costa Rica has deteriorating public infrastructure, but lacks the money to improve it. Infrastructure investment is also needed at the subnational level, and Costa Rican municipalities are beginning to look toward local capital market investors to provide financing.

ICMA’s most recent project in Costa Rica was the Regional Credit Rating Improvement (RCRI) program implemented by ICMA México-Latinoamérica. RCRI, funded through the Public-Private Infrastructure Advisory Facility of the World Bank, which provided assistance to the municipalities of Esparza, San Carlos, and Cartago and the Cartago Electric Distribution/Production Utility, or JASEC (a regional utility) as they took steps to improve their creditworthiness so that they could attract investors. (Esparza later experienced financial difficulties that forced it to discontinue its participation.)

ICMA’s involvement in the country began with the USAID-funded Regional Partnership for Decentralization and Local Governance in the Americas initiative (1998-2006). Costa Rica was one of seven countries where ICMA worked to promote best practices and share leading-edge technologies aimed at strengthening democracy and local governance. The initiative included an assessment of the contribution of municipal development to democracy in the region. The assessment was based on interviews and other information gathered from key sectors in Bolivia, Guatemala, El Salvador, Honduras, Nicaragua, and Panama as well as Costa Rica.  

Among the results were a Costa Rica Country Report and an overall report, Trends in Decentralization, Municipal Strengthening, and Citizen Participation in Central America, 1995–2003, both published in 2004 for the Office of Regional Sustainable Development of the U.S. Agency for International Development’s Bureau for Latin America and the Caribbean.