Why is Costa Rica So Expensive?
...because it deserves so.
I was enjoying this video produced by the UCR where Prof. Jorge Guardia gives a brief explanation as to why Costa Rica appears to be so expensive.
Before talking about what was discussed let me highlight how much I loved the way the content was presented. Subtle lighting and a backdrop that’s not pitch black? I am all over it. Listening to the professors interact is also very enjoyable as they discuss the matter seriously while maintaining a casual tone. Watching the video felt like seeing two well-read uncles discussing the economy at a family party.
What I got from the video:
- Collective Action Agreements: Sectors that are fundamental for the country, (for example, energy), have Collective Action Agreements that provide so many benefits to their workers that the only way to sustain them is for the government to have a monopoly in said sector.
- Financial Margin: The difference between the lending and savings rate is high when compared to neighboring countries. The cost of money goes into the production process.
In short: lack of competition.
There were a some quotes in the video that brought happiness to my day (shared in Spanish cause you can’t translate art):