ABSTRACT
Panama emerged as an independent republic in 1903 as the result of geopolitical conflicts to build an interoceanic canal. Few countries in Latin America have had a closer relationship with or relied on the United States more than Panama. The building of and sovereignty over the Panama Canal has defined the origins, politics, society, and economy of this small Central American nation. This chapter examines the evolution of Panama’s political and economic systems from the birth of the nation to the military dictatorship of 1968–1989, the US military invasion that toppled the military regime, and the post-invasion efforts to build a democratic political system. The chapter pays particular attention to the dual processes of demilitarization and democratization since 1990. The chapter explores how systemic corruption undermines institutional legitimacy and perpetuates economic inequality. Finally, the chapter concludes with an assessment of the impact of the COVID-19 pandemic.
