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Volume 53 / Social Sciences

ECONOMICS: CENTRAL AMERICA


CLARENCE ZUVEKAS, JR., United States Agency for International Development


THE OUTPUT OF SCHOLARLY WORKS on Central American economic themes continues to be large, although coverage of individual countries is highly variable. Costa Rica is the most widely studied country, with many high-quality works now being published by that country's own economists. A good starting point for Costa Rica is the excellent two-volume collection edited by González-Vega and Camacho (item bi 93002813). Nicaragua and El Salvador have the next largest number of listings among works annotated below, trailing Costa Rica considerably in both quantity and quality. Studies of interest on the other countries are limited, and the average quality is disappointing.

Regional economic integration remains a popular theme (items bi 91003569, bi 91003564, bi 91003566, bi 93003374, bi 93003373, bi 93003428, bi 93003515, and bi 93003457). Other studies are also regional in scope, although Belize is rarely mentioned and Panama is often excluded.

The economies of the isthmus have been slowly recovering from the long, deep recession that began during the late 1970s and early 1980s. Among the five Central American countries, Costa Rica has led the way with an average GDP growth rate of 4.0 percent between 1983 and 1991, while Nicaragua's economy - plagued both by exogenous events and misguided economic policies - began another downturn in 1984. Panama's economic recovery was interrupted by external events, while Belize, virtually unnoticed in the scholarly literature, quietly posted an impressive annual GDP growth rate of 8.7 percent between 1984 and 1990.

There is widespread agreement among Central Americans and outside observers that a new economic model or strategy is needed if these countries are to get onto a path of rapid, sustainable, and equitable growth in an international economic environment that has changed radically since the early 1980s. Many of the comprehensive treatments of the regional and national economies (items bi 91024532, bi 93003384, bi 91003571, bi 91024418, bi 90012351, bi 91006429, bi 91003572, bi 91003581, bi 91007427, bi 91003562, bi 93001707, bi 91023285, bi 91003582, and bi 91024399) and some of the essays in Bulmer-Thomas (item bi 93003373) and González-Vega and Camacho (item bi 93002813) address this theme, but they differ on the content of the new model or strategy. Other works focus more specifically on economic stabilization and, especially, structural adjustment policies (items bi 91003590, bi 91024420, bi 93003520, bi 91003571, bi 91002911, bi 93002824, bi 93002825, bi 91024422, bi 91003562, bi 93001841, bi 93003373, and bi 93002813).

There has been a remarkable convergence across the political spectrum on the desirability of export expansion and diversification, more efficient resource allocation through price liberalization, and a significantly different role for the State. But even within this broad consensus, there are diverse viewpoints; by no means can all who subscribe to the consensus be considered "neoliberals." Moreover, there are others who believe that Central America can best pursue development through regional integration (items bi 91024430 and bi 93003408), while in Panama several voices call for an inward-oriented development strategy at the national level (items bi 91006572, bi 91003573, and bi 91003588).

Many studies focusing on trade policy have a generally favorable attitude toward export expansion, but others call for more balance between export orientation and attention to the domestic market (item bi 91024399). Some studies express concern about the prospects for traditional exports (items bi 91003574 and bi 91007514), while others link traditional exports to exploitation of labor (items bi 91003568 and bi 90012542) or relate elite dominance of key exports to increased socioeconomic inequalities (items bi 91008784 and bi 91024397). Some writers maintain that nontraditional agricultural export expansion will widen income inequalities (items bi 91026405 and bi 93001626), although small farmers are sometimes important producers of both nontraditional and traditional crops (item bi 91008368). Exports of nontraditional manufactures have grown rapidly in Costa Rica (item bi 93002795), but few small enterprises in that country export, even though most express a willingness to do so (item bi 91003570). A statistical analysis of Central American trade data concludes that, for manufactured goods, neither export promotion nor import substitution has contributed much to economic growth (item bi 91004103).

Other topics receiving considerable attention include poverty and income distribution (items bi 91024424, bi 93002786, bi 91002910, bi 93003297, bi 91024417, bi 91003558, bi 91024396, and an important essay by Jiménez and Céspedes in item bi 93002813); labor markets (items bi 91003565, bi 90012542, bi 91005268, bi 91006580, bi 91009169, bi 93002813, and bi 93001160); agrarian reform (items bi 91003576, bi 91011917, bi 91000681, bi 91011912, bi 91003580, bi 91011888, bi 91026404, bi 91011895, and bi 91003583); and agricultural price and marketing policies (items bi 91017915, bi 93003295, bi 90012357, bi 90011837, and an essay by Sáenz in item bi 93002813).

External debt is a major topic in some studies (items bi 91003569, bi 91003584, bi 91007458, and bi 91007427) and is also discussed in many others. For Nicaragua, several studies address the relationship between inflation and devaluation (items bi 91009122, bi 91003582, and bi 93001830). A number of writers call for more direct attention to issues of social development and social equity (items bi 91003584, bi 93003408, bi 93003520, bi 91008784, bi 91024429, and bi 91006575). US economic assistance is a major focus of several studies (items bi 91024417, bi 91003561, and a chapter in item bi 93003373) and appears as a minor topic in many others.

Among the topics receiving less attention - at least as the main theme of the studies annotated below - are exchange rate policy (item bi 91024425 and two essays in item bi 93002813); tax policy (items bi 93001627 and bi 93003532); financial intermediation (item bi 90012429 and González-Vega's paper in item bi 93002813); government-private sector relations (items bi 93003425 and bi 93003479); emigrants' remittances (item bi 91024427); and the informal sector (item bi 91024428). This is not an exhaustive list, as a dozen or so other subjects are also addressed in the works annotated below.


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