Decentralization of Productivity: Income Inequality and Income Concentration in Panama
DOI:
https://doi.org/10.66327/rci.v4i2.111Keywords:
income inequality, labor productivity, sectoral concentration, political and economic decentralization, PanamaAbstract
We explore the prevailing narrative linking economic growth, income inequality, and productivity. The
economic and social performance of Panama presents us with a relevant case study of remarkable economic growth
that has been accompanied by a decrease in the share of labor in income. Focusing on Panama’s economy between 2010
and 2019, we illustrate how traditional growth models fail to incorporate considerations of industry concentration,
and then challenge the effectiveness of performative political and economic decentralization as a standalone solution
to inequality. The paper contributes to discussions on the role of microeconomic dynamics in income inequality,
emphasizing the importance of worker participation in strategic decision-making processes at the firm level, and
citizens´ involvement in processes of political decentralization that go beyond performative gestures.
Downloads
References
Acemoglu, D., & Robinson, J. (2014). Why countries fail. The origins of power, prosperity and poverty. Austral Journal of Social Sciences, 26(8), 139–146.
Acemoglu, D., Johnson, S., & Robinson, J. (2005). Institutions as a fundamental cause of long-term growth. In P. Aghion & S. Durlauf (Eds.), The manual of economic growth (pp. 385–472). Elsevier.
Arkorful, V., Lugu, B., Hammond, A., & Basiru, I. (2021). Decentralization and citizens’ participation in local governance: Does trust and transparency matter? Forum for Development Studies, 48(2), 199–223.
Astudillo, J., Fernández, M., & Garcimartín, C. (2019). La desigualdad de Panamá: su caracter territorial y el papel de las inversiones púbicas. Banco Interamericano de Desarrollo.
Autor, D., Dorn, D., Katz, L. F., Patterson, C., & Van Reenen, J. (2020). The fall in labor participation and the rise of superstar companies. Quarterly Journal of Economics, 135(2), 645–709.
Azar, J., & Vives, X. (2018). Oligopoly, macroeconomic performance and competition policy. CESifo Working Paper Series, 7189. https://ssrn.com/abstract=3274558
Bardhan, P. (2002). Decentralization of governance and development. Journal of Economic Perspectives, 16(4), 185–205.
Beluche, O. (2012). Panama, la miseria del país hanséatico. https://www.sinpermiso.info/textos/panam-la-miseriadel-pas-hansetico
Benjamín, R. (2020). La política en el discurso: Construcciones discursivas de las élites políticas panameñas en las posinvasión. Instituto de Estudios Democráticos. https://biblioteca.umecit.edu.pa/cgi-bin/koha/opac-imageviewer.pl?biblionumber=7911
Blanchflower, D., & Bryson, A. (2024). The wage curve after the Great Recession. Economic, 91(362), 653–668.
Bretos, I., & Marcuello, C. (2016). Revisiting globalization: Challenges and opportunities in the development of cooperatives. Annals of Public and Cooperative Economics, 88(1), 47–73.
Buchanan, J., & Tullock, G. (1969). The calculus of consent: Logical foundations of constitutional democracy. University of Michigan Press.
Calvo, A. C. (2014). Transitism and dependence: The case of the Isthmus of Panama. Yearbook of Central American Studies, 40(1), 165–186.
Castillero Calvo, A. (1973). Transitismo y dependencia: el caso del istmo de Panamá. Nueva Sociedad, 5, 23.
Centro Internacional de Estudios Políticos y Sociales (CIEPS). (2019). Encuesta de Ciudadanía y Derechos. https://cieps.org.pa/wp-content/uploads/2020/04/EncuestaCIEPS2019-1.pdf
Chattopadhyay, R., & Duflo, E. (2004). Women as policy makers: Evidence from a randomized policy experiment in India. Econometrica, 72(5), 1409–1443.
Conniff, M., & Bigler, G. (2019). Modern Panama. Cambridge University Press.
Cremaschi, M., Fioretti, C., Mannarini, T., & Salvatore, S. (n.d.). A cultural view of policy-making: Pluralism, performativity, and semiotic capital. In Culture and policy-making: The symbolic universes of social action. Springer.
Delgado, M., Porter, M., & Stern, S. (2014). Cluster, convergence and economic performance. Research Policy, 43(10), 1785–1799.
Fairbrother, P., O’Brien, J., Junor, A., O’Donnell, M., & Williams, G. (2012). Unions and globalisation: Governments, management, and the state at work. Routledge.
Farrell, D. M., & Stone, P. (2020). Sortition and mini-publics: A different kind of representation. In R. Rohrschneider & J. Thomassen (Eds.), The Oxford handbook of political representation in liberal democracies. Oxford University Press.
Feenstra, R. C., Inklaar, R., & Timmer, M. P. (2023). The next generation of the Penn World Table. American Economic Review, 105(10), 3150–3182.
Fisher, E. (2014). Constitutional struggle and indigenous resistance in Latin America: The case of Panama. Latin American Perspectives, 41(6), 65–78.
Fisher, E., & Roach, G. (2013). Desempeño macroeconónico, desigualdad, productividad y pobreza en América Latina. https://library.fes.de/pdf-files/bueros/fesamcentral/10388.pdf
Fisman, R., & Gatti, R. (2002). Decentralization and corruption: Evidence across countries. Journal of Public Economics, 83(3), 325–345.
Gómez Zaldívar, F., & Molina, E. (2018). Special economic zones and their impact on regional economic development. Developmental Problems, 49(193), 11–32.
Goñi, E., & Maloney, W. (2014). Why don’t poor countries do research and development? CEDE Document No. 2014-23. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2451260
International Labour Organization (ILO). (2024). ILO statistical explorer. https://www.ilo.org/shinyapps/rer15/?lang=en&segment=indicator&id=LAP_2GDP_NOC_RT_A
Jauregui, J. (2024). La panacea de la inversion extranjera. La Prensa. https://www.prensa.com/opinion/la-panacea-dela-inversion-extranjera/
Kusnetz, S. (1995). Economic growth and income inequality. American Economic Review, 45, 1–28.
Lago, I., Lago-Peñas, S., & Martínez-Vazquez, J. (2020). Decentralization after the Great Recession: Fine-tuning or paradigm shift? Regional Studies, 54(7), 877–880.
Leander, A. (2021). The politics of neoliberal rituals: Performing the institutionalization of liminality at trade fairs. In S. Rai et al. (Eds.), The Oxford handbook of politics and performance. Oxford Academic.
Lessmann, C. (2012). Regional inequality and decentralization: An empirical analysis. Environment and Planning A: Economy and Space, 44(6), 1363–1388.
Luna, C. (2009). Mitos y perspectivas del proceso de descentralización en Panamá. Revista Panameña de Política, 8, 7–27.
Matland, R. (1995). Synthesizing the implementation literature: The ambiguity-conflict model of policy implementation. Journal of Public Administration Research and Theory, 5(2), 145–174.
Manduley, J., & Feijóo, J. V. (2009). Panama: estructura-coyuntura. Center for Strategic Studies.
Marinakis, A. (1999). Worker participation in company profits or operating results in Latin America. CEPAL Review, 69, 69–82.
Milanovic, B. (2023). La gran convergencia: La desigualdad global y sus malestares. https://www.foreignaffairs.com/world/great-convergence-equality-branko-milanovic
Ministerio de Planificación y Política Económica (1978). Estrategia para el desarrollo 1970–1980. Litho.
Instituto Nacional de Estadísticas (INECa). (2013–2019). Encuesta entre empresas no financieras. https://www.inec.gob.pa/publicaciones/Default2.aspx?ID_CATEGORIA=4&ID_SUBCATEGORIA=17
INECb. (2013–2019). Encuesta de hogares https://www.inec.gob.pa/publicaciones/Default3.aspx?ID_PUBLICACION=947&ID_CATEGORIA=5&ID_SUBCATEGORIA=38
INECc. (2024). Cuentas nacionales https://www.inec.gob.pa/publicaciones/Default2.aspx?ID_CATEGORIA=4&ID_SUBCATEGORIA=26
Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
Piketty, T. (2020). Capital and ideology. Harvard University Press.
Poertner, M. (2023). Does political representation increase participation? Evidence from party candidate lotteries in Mexico. American Political Science Review, 117(2), 537–556.
Prud’homme, R. (1995). The dangers of decentralization. The World Bank Research Observer, 10(2), 201–220.
Ramírez López, B. P. (2017). The internal market of Latin America and the maintenance of capitalism. Latin American Perspectives, 45(219), 74–84.
Raworth, K. (2018). Doughnut economics: Seven ways to think like a 21st century economist. Random House.
Rodden, J. (2006). Hamilton’s paradox: The promise and peril of fiscal federalism. Cambridge University Press.
Rodrik, D. (2017). Straight talk on trade: Ideas for a sane world economy. Princeton University Press.
Rosas, P. (2024). El proceso de descentralización en Panamá y su relación con la academia. Revista Saberes, 7(1), 33–56.
Solow, R. (1994). Perspectives on the theory of growth. Journal of Economic Perspectives, 8(1), 45–54.
Stanziola, J., & Araúz-Reyes, N. (2023). Rigidez en las reglas del juego: explorando respuestas con enfoque de género ante el Covid-19 en América Latina y el Caribe. Polis Revista Latinoamericana, 22(64), 200–235.
Stanziola, J. (2019). El hub de las Américas: ¿nuestro destinado natural e inevitable? https://cieps.org.pa/18891-2/
Smith, A. (1994). Wealth of nations (1776). Alianza.
Terzo, G., Notarstefano, G., & Di Maggio, U. (2023). Strengthening local economies through social capital: The role of cooperative enterprises in driving economic growth in Italy. Annals of Public and Cooperative Economics.
Treisman, D. (2000). The causes of corruption: A cross-national study. Journal of Public Economics, 76(3), 399–457.
The Harvard University Growth Lab. (2019). Growth projections and complexity rankings, V2 [Dataset]. https://doi.org/10.7910/DVN/XTAQMC
Van Biesebroeck, J. (2015). How close is the link between wages and productivity? A study of the literature. https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_410267.pdf
World Bank. (2024). World Bank open data. https://data.worldbank.org/
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 REVISTA CIENTÍFICA DEL ISTMO
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
