Times were tough in Panama and this includes being tough for the cops. I had to pay bribes. I was once questioned by the police over a matter and was scared I'd be taken to a holding cell in Panama City. If you were put in a holding cell in Panama City and were not considered friendly to the regime you could be placed in a cell were you would be sexually assaulted by transvestites put in the cell for such a purpose.
Some areas - nice areas - were off limits to Americans who knew better. Places were officer of the Panamanian military lived. You didn't want to be caught there. When stopped by cops you considered it a good thing if the only thing that happened was that you lost money.
It was much worse for Panamanians than for Americans. We did have a military presence and until the end Noriega didn't want to push the boundaries of acceptable behavior too much.
The two defining characteristics in my mind of a police state are a feeling of powerlessness when dealing with police forces and the feeling of arbitrariness of how police forces deal with you. We aren't at the point of police statehood yet but I see the U.S. going down this path.
These sorts of things were happening in the Stalinist "dark" '50s, that's for sure, but when I grew up, in the '80s, the regime had become a little bit more "civilized". I think it was mostly because Ceausescu had signed the Helsinki Accords (http://en.wikipedia.org/wiki/Helsinki_Accords) and in general because he wanted to detach Romania from Moscow's grip. The regime wasn't technically allowed, so to speak, to imprison people for political reasons, so this is why the authorities were resorting to either fake psychiatric assessments or to made up petty theft charges in order to take away "inconvenient" people.
Anyway, it's a very long and complicated story, 20 years after the facts even us, Romanians, don't have a single view on the whole thing (surprisingly enough, there's a quite big percentage of the population who'd rather relive those times than having to deal with the realities of the present).
I had a good friend who grew up in Romania and his stories scare the crap out of me.
1. Your next door neighbor is just gone one day, replaced with another family. Nobody asks why or what happened. You just don't ask.
2. Election ballets are write-ins. One guy wrote "Mickey Mouse" on the ballet and they came looking for him. He was forced to report to the local police station to watch propaganda videos for 8 hours a day for 8 days.
People can complain about how things are going here in the US, but to say it becoming more and more like a dictatorship seems a little disingenuous.