Remarks: Roman Solis Zelaya

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I would like to thank the organizers of this conference very much for allowing me the opportunity to address the role of legal institutions in economic development in Costa Rica. As the legal advisor to the government and society of Costa Rica--that is the role of the Procuraduria General de la Republica [Department of Justice] there--I would like to address how institutions can in fact carry out their activities and promote economic development.

In the last few years in my country, we have undergone a notable transformation from a government that has had an interventionist role in the economy to one that has a regulatory role of overseeing the economic processes. As the public agent for intervention and regulation, the government has not abandoned its role as guarantor for certain common values and interests of society and what we could just call the public good or public solidarity.

The central government, or the state, has issued a number of regulations or rules--economic rules of the game, if you will--which see a new public economic order and take on a specific position vis-a-vis economic agents and consumers. This role is improving as the society develops.

We can say that the government is in a new posture, an intermediate phase, in which it must still pay special attention to externalities--the negative ones in particular. This is an area of great legislative, regulatory, and even judicial interest. What this means is that the central government must exercise certain enforcement authority and powers, although not directly as an economic agent. These state powers or police or enforcement powers that the government continues to exercise where market failures do occur or where the market does not address problems take place in areas of public goods that are absolute necessities. Examples of these areas are externalities, the effects of monopolies, imperfect access to information, absence of equity, and economic cycles or business cycles.

A process of globalization and economic liberalization has been taking place now over the last several years. In the 1990s a number of new laws and constitutional reforms have taken place, allowing liberalization of the market and allowing the country to act with greater interdependence and towards a streamlining of the productive apparatus just as has occurred in many other countries. This has allowed comparative advantages in production and it has allowed the production of goods and services at lower cost and at better price.

The processes of economic liberalization and of globalization are quite distinct. They do not necessarily coincide; nevertheless, in Costa Rica, they have been taking place simultaneously and in a parallel fashion. One can point to the late 1980s, when this process of economic liberalization began to take place. With Costa Rica's ratification of the GATT in 1990 and the General Accord of Trade and Commerce on October 24, 1990, there was a clear effort to open up the economy to other countries.

As part of this process four very significant laws were passed, all of them in 1994. …