5 - Costa Rica’s “Soft” Security Taxes

Summary

Chapter 5 studies the case of Costa Rica, an example of a diminished form of elite taxation due to weak linkages between the government and business elites. Whereas average levels of violence have remained lower in Costa Rica compared to several of its Central American neighbors, economic elites concentrated in the province and canton of San José experienced sharp increases in violent crime. In 2011, the country adopted a flat tax on corporations and earmarked its revenue for public-safety purposes. However, Costa Rica’s left-of-center administrations struggled to overcome obstacles related to elites’ mistrust in government, which led to a much less targeted form of taxation.