Panama is a representative democracy governed by a presidential system. The president is the head of state and government, as well as the leader of his party. The president is elected for a five-year term. The legislative branch consists of the unicameral National Assembly, which consists of 71 members elected for five-year terms. The judiciary consists of the Supreme Court of Justice, which consists of nine members appointed for ten-year terms, five regional high courts, and three courts of appeals.

The country's leading political parties are Realizing Goals (RM), Democratic Change (CD), Revolutionary Democratic Party (PRD), Panamenista Party (PAN), National Republican Liberal Movement (MOLIRENA), Another Way Movement (MOCA), Alliance Party (ALIANZA) and People's Party (PP). In the 2024 general elections, the independent Vamos movement won 20 seats; however, it is not a political party.

Jose Raul Mulino of the RM party has been elected President in the elections held in May 2024, and assumed office as of July 1, 2024.

The country is administratively divided into ten provinces and three regions. The provinces are; Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, Western Panama and Veraguas. Indigenous territories are Embera, Ngabe-Bugle and Guna Yala.