Unleashing Central America’s Growth Potential : Nicaragua
As the smallest economy in Central America, Nicaragua has undergone a structural transformation that has enabled the country to grow at a high pace since the mid-1990s. The objective of this study is to investigate the drivers and constraints of gr...
| Main Authors: | , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/995441627622522407/Nicaragua-Unleashing-Central-America-s-Growth-Potential http://hdl.handle.net/10986/36049 |
| Summary: | As the smallest economy in Central
America, Nicaragua has undergone a structural transformation
that has enabled the country to grow at a high pace since
the mid-1990s. The objective of this study is to investigate
the drivers and constraints of growth and productivity in
Nicaragua and explore areas with high potential. The value
added of this study is to provide an in-depth analysis of
the drivers and constraints of Nicaragua’s growth using a
wide range of analytical tools. Using these tools, the
report finds that boosting growth and reducing poverty
requires raising productivity growth and facilitating the
entry of women to the labor market. According to the growth
diagnostics methodology, this report finds that the areas
preventing faster growth are: (i) corruption, (ii) financial
development, (iii) governance, (iv) lack of innovation, and
(v) property rights. Addressing the identified growth
constraints can help the country in the path towards
diversification, which will increase the resilience to
external shocks, create job opportunities, generate
sustainable growth, and reduce dependence on remittances.
This report has identified several key areas where policy
reforms can help boost productivity and growth over the
medium to long term. They include: implementing measures to
boost female labor force participation; increasing the
access of small firms to finance and addressing collateral
laws, credit information coverage, and competition;
coordinate with the private sector to identify missing
public goods and to design mechanisms to provide them;
creation of an enabling environment for innovation;
strengthening public institutions through reducing
bureaucracy, promoting transparency and rule of law, and
strengthening the capacity of the public sector; improving
the property titling regime and the land administration
system; and strengthening the institutional framework,
including tackling corruption. |
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