The Panamanian economic system is a mix of free market / capitalistic and socialistic. It is not like the Scandinavian social democracy, but it is close. We are a totally capitalistic, free market society, but in terms of certain social programs, the government plays a huge role.
We have the Caja de Seguro Social, which is like the social security system for healthcare and anyone who works in Panama pays into that system. It gives you the right to be attended at the state hospitals at low to no cost.
If you can afford to go to the private hospitals, the treatment there is much more personalized and efficient. The state hospitals are quite crowded, but they provide a safety net. (Pubic hospital, Santo Tomas, Panama, pictured.)
The same applies for education. There are private schools, which are way better, but of course there are the state schools, which are doing a fair job.
Panama also has a retirement program. The state pays a pension to people based on their age. If you are in Panama and you are above 65, you are entitled to receive a US $100 per month from the state. They used to pay everybody that amount, but now they check to see how much your income is and if you would actually merit receiving a check from the state or not.
In other words, Panama is heavily involved with a lot of social programs, such as education, healthcare, and pension or retirement funds. In that sense, it seems that everyone is taken care of. It seems that no one is left behind, but at the same time there is a robust free market, capitalistic economy. So there are very rich people and very poor people, but with the government programs, everyone seems to be at least OK, even those on the margins.
In the private sector, the government offers a lot of incentive programs, tax breaks, etc. If you are a foreign person coming in to invest, changes from one administration to the next won’t really detract from the business climate.