Costa Rica Coffee Guide

Bill to Strengthen Municipalities Signed into Law

May 7, 2010

Outgoing President Oscar Arias signed a law Tuesday morning that would gradually funnel more of the government’s $18.9 billion annual budget to local governments.

The law sat in the Legislative Assembly for years, while local community leaders and mayors fought for more money to fix fading infrastructure, fund their schools and respond to social needs.

Though Arias had expressed his support for decentralization in his campaign and government plan – viewing it as a way to stimulate citizen participation and develop rural communities – he encountered opposition from people who feared municipal leaders were too corrupt or too inexperienced to manage greater responsibilities.

Costa Rica has always acted as a centralized entity. In fact, local governments manage fewer than 2 percent of public resources, less than any other country in Central America.

“The centralized state was working,” said University of Costa Rica professor Mariela Castro, a specialist in local government, explaining Costa Rica’s slow move to decentralize. “It was responsive to the people, so there was no need for strong local government. But when the state became less responsive, people began to look for alternatives” (TT, Nov. 13, 2009).

Under the new law, the central government has seven years to work up to a 10 percent minimum transfer of public resources to local entities. It must also ensure that the infrastructure is in place for municipalities to use the funds productively.

“This is not an (unimportant) act,” said newly appointed Legislator Fabio Molina, who spoke moments before the law was signed. “This law will change the political system.”

–Chrissie Long

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