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Puerto Rico’s Bad-Governance Limbo

From Hurricane Maria in 2017 to Fiona in 2022, natural disasters have compounded the effects of gross economic mismanagement in Puerto Rico. Behind these failures is the unique and problematic relationship between US federal policies and Puerto Rico’s own economic decision-making.

WASHINGTON, DC – Puerto Rico is part of the United States, but it is not a state. It is a territory (and a commonwealth) with its own constitution, approved by the US Congress. The island is subject to federal law, the US dollar is its currency, and Puerto Ricans are US citizens, though they cannot vote in federal elections and do not have a voting representative in Congress. There are also differences between the mainland and the island when it comes to federal benefit entitlements, income-tax treatment, business regulations, and other measures.