This paper aims to makes use of available historical data from 1960, to lay out some basic facts about fiscal policy in Panama. Three approaches are used for this purpose: nonparametric method, correlation analysis of cyclical components and time series regression.
Three main results are obtained: Since 1990, fiscal policy becomes procyclical, without it translating in a better reallocation of resources; there exists a clear relationship between the behavior of the trend of public spending and debt and we find a concerning increase in recent public spending that seem to be caused by an imbalance in the performance of budgetary institutions, including inefficiency and corruption in the use of public resources. (JEL E62, H63, D73)
