The Republic of Panama is an independent, sovereign state. The democratically elected government has three branches: the Executive branch comprises the independently-elected President and two Vice-Presidents, who appoint a cabinet pf twelve Ministers of State; the elected unicameral Legislative Assembly is made up of 72 deputies; the Supreme Court of Justice has nine judges appointed for 10-year terms, and there are two lower levels of court.

There are political parties: until late 1999 a coalition of the Democratic Revolutionary Party, the Popular Nationalist Party and the National Liberal Party was in power, led by President Ernesto Balladares. As of September 1999, a coalition led by the Arnulfista party assumed power, led by President Mireya Moscoso, widow of former long-time president Arnulfo Arias Madrid. In September of 2004, Martin Torrijos of the Democratic Revolutionary Party took office.