The Widening Gap Between Earnings and Living Standards in Panama

Guest blog by Daniel Lombana, LEG ’25

One lesson I take from the Implementing Public Policy program is the value of focusing on the problem, not on pre-set solutions. The PDIA and growth diagnostic approaches taught me that progress comes from identifying what truly constrains development and working through it step by step, learning as we go. Learning the concept of “binding constraints” has been extremely useful. 

I also learned that inclusion and growth must coexist in any healthy economic environment. An economy cannot be considered successful if progress is not properly distributed. This made me see the importance of governance and institutional credibility as part of economic policy, and highlight the importance of diversifying our exports. 

Another powerful takeaway was the importance of stakeholder alignment and building common ground. Real change depends on people, not just policies, and aligning incentives and values is often the hardest part of any reform. Finally, I learned that continuity is key: long-term impact comes from consistent, transparent processes that survive political cycles. Some of my takeaways are rooted in the feedback and discussions of my peer learning group Global Growth Navigators. It has been a wonderful journey with my peers in every session and working on every assignment. 

At the start, my challenge—the growing gap between incomes and living standards in Panama—seemed broad. Through the course, I was able to narrow it down to one binding constraint where I could act: the governance and trust deficit. 

Working through the fishbone diagram and later assignments helped me see that transparency and ethical spending are not side issues—they are central to how growth is distributed and perceived. I also realized that meaningful change can start from within existing systems, even without executive authority. 

Our office began applying some PDIA principles since I came back from Cambridge for our On Campus experience at HKS during our Implementing Public Policy program. We learned asking better questions, mapping causes instead of jumping to solutions, and communicating more clearly with other institutions. The experience also confirmed the importance of political timing and ownership. Sometimes progress means preparing the ground—building relationships and trust—so reforms can move forward when conditions align. 

I plan to continue using these methods in my parliamentary work, especially in the Appropriations Committee as long as we are part of it. This mindset helps us analyze why certain budget or oversight processes don’t deliver expected results and how to make them more transparent and functional. 

I will also keep promoting a culture of learning and iteration—testing small improvements in how information is shared, how hearings are conducted, and how ethical standards are discussed. The lessons from growth and inclusion modules reinforced that effective governance is itself a driver of growth, and I intend to make that part of our legislative agenda. 

Finally, I want to strengthen collaboration with academia, civil society, and the private sector to sustain an open dialogue on how to make public spending more accountable. Using data, communication, and transparency to rebuild trust will remain my personal and institutional goal. 

Going forward, I would like to focus more on how to make growth truly inclusive—how to ensure that economic progress translates into better living conditions for all and not just for specific sectors or regions. This is an area where Panama, like many other countries, still faces important challenges. I am particularly interested in learning more about how to design and implement strategies that combine growth, equity, and institutional credibility. For that reason, I am currently enrolled in the Strategies for Inclusive Growth program scheduled for April 2026, where I hope to continue exploring these ideas and learn practical tools to connect inclusive policy design with measurable impact and long-term sustainability. 

I would also like to explore more about how to institutionalize learning and adaptation inside government. PDIA works well in small teams, but how do we make some of its principles part of the culture of larger institutions? Another question is how to balance technical analysis with political reality—how to protect iterative, evidence-based reforms from short-term political pressures. 

Lastly, I would like to go deeper into measuring trust and ethical governance as part of growth diagnostics. We often measure income and productivity, but legitimacy and transparency are harder to quantify, yet they determine whether citizens believe in reforms. 

This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. 63 Participants  successfully completed this 10-week online course in December 2025. These are their learning  journey  stories.