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Volume 55 / Social Sciences

ECONOMICS: CENTRAL AMERICA


CLARENCE ZUVEKAS, JR., Consulting Economist, Annandale, Virginia


THE CESSATION OF ARMED CONFLICTS in Central America (except in Guatemala), the break-up of the Soviet Union, and the end of the Cold War have dampened the ideological content and sharpened the objectivity of writings on the economies of the Central American isthmus. The gap in quality of analysis between Costa Rican economists and those in the rest of the region is narrowing, although studies by most Panamanian economists continue to be disappointingly weak.

Many works annotated for this volume deal directly or indirectly with issues of structural adjustment, which has been increasingly embraced as necessary for rapid and sustained economic growth. Miguel Angel Rodríguez's edited volume (item bi 93022714) and Juan Buttari's comparative study (item bi 93001620) are good starting points. Negative views of structural adjustment are best articulated in the volume edited by Pelupessy and Weeks (item bi 95001276). Trade issues for the region, including possible economic integration with North America, are clearly delineated in an essay by Saborío and Michalopoulos (item bi 95001297). The revival of intraregional trade and the lowering of trade barriers among the Central American countries since the mid-1980s are encouraging trends. At the same time, the relative priority given to intraregional trade has tended to decline.

Nontraditional agricultural exports (mainly to the US) have expanded rapidly over the past decade, but much skepticism remains about the long-term sustainability of this trend and its distributional and environmental consequences (e.g, see the collection edited by Mendizábal and Weller, item bi 93020216). Curiously, little attention is given to the even larger (and also rapidly growing) volume of nontraditional manufactured exports.

The trend toward more analytical writings on poverty alleviation and social development — themes that are certainly not new to the region — is especially welcome. Particularly valuable is the study by Marc Lindenberg, a former rector of the Instituto Centroamericano de Administración de Empresas or INCAE (item bi 95001277). Also of note is Carlos Briones' analysis of the 1988 and 1990 household survey data in El Salvador (item bi 94004566), although the weaknesses of these data need to be borne in mind.

The Coordinadora Regional de Investigaciones Económicas y Sociales (CRIES) sponsored a series of studies on the role of US economic assistance to individual Central American countries in the 1980s and early 1990s (not all of which were annotated for this volume). The best is Herman Rosa's excellent work on El Salvador (item bi 94004561).

Macroeconomic policy in Nicaragua, an analytically challenging topic, has been ably addressed by a number of scholars from outside the country. A good place to begin is Joseph Ricciardi's essay (item bi 94001803), which was written before the Chamorro government initiated a major reform program in March 1991. Another noteworthy work on Nicaragua is Brizio Biondi-Morra's analysis of food policy (item bi 93020212).

A controversial topic now receiving much attention throughout Latin America is labor-market policy. Although written in the mid-1980s, studies on Panama by Spinanger and by Butelman and Videla are especially valuable because they seek to quantify the negative employment and wage effects of allegedly "pro-labor" policies (the two essays were published together; see item bi 94004562). The functioning of labor markets in Costa Rica is skillfully analyzed in studies by Gindling (item bi 93004091) and Gindling and Berry (item bi 93001687). Edward Funkhouser's study of El Salvador shows how labor force participation is affected by external migration and remittances (bi 94002203).

Other topics receiving attention include industrial policy, inflation, the determination of parallel-market exchange rates, environmental issues (item bi 93020208), agrarian reform, and the informal sector. On the latter, see in particular the country studies in the Menjívar and Pérez Sáinz volume (item bi 94004567), which provide gender-disaggregated data.


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