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SINCE HURRICANE MITCH WREAKED HAVOC on several Central American countries in October 1998, the region has been free from major economic shocks caused by natural disasters or by human actions within its borders. Regional economic performance through 2003, however, did suffer from the slowdown in the US economy in the first years of the 21st century, reflecting Central America's strong trade dependence on the US. Economic growth in the individual countries was sluggish to moderate; no country made great strides forward, but neither did any of them suffer the kinds of major contractions experienced by Argentina and Venezuela.
The regionally focused studies reviewed in this section cover a wide range of topics, none of which dominates the research agenda. Poverty and income distribution appear initially to be notable omissions. The absence of works focused directly on these subjects does not mean none were published; rather, it was difficult to find noteworthy contributions. Moreover, two edited volumes on rural development deal with these issues in the context of discussing the effects of economic policies on small farmers (items #bi2005000150# and #bi2005000054#). Poverty and social policy are also the subjects of several essays in the important two-volume work edited by Felipe Larraín (item #bi2003000030#). In addition, the study by Corbacho and Davoodi examines the relationship between fiscal adjustment and indicators of poverty and inequality (item #bi2005000053#).
Issues of trade policy and export performance are underrepresented, given their importance in the current policy agenda and public debate. However, given that the US-Central American Free Trade Agreement (CAFTA) was signed with the US only in May 2004 and has not yet been ratified, it is too early to expect much to have been written on this potentially important accord. The study by Gitli and Arce provides useful information on the growth of different types of exports during the 1990s (item #bi2001005546#).
Fiscal policy receives less attention than warranted, given its centrality to the establishment and maintenance of a sound macroeconomic policy framework. Two working papers written by economists at the IMF examine, respectively, the expenditure and revenue sides of the budgets of the region's economies (items #bi2005000053# and #bi2005000056#). [CZ]
Many works included in this review analyze the scope of and results from the structural adjustment programs undertaken in the region in recent years. José Guillermo Salazar and José Dávila present a view for Central America as a whole (item #bi2001003311#), while the cases of Costa Rica and Nicaragua are examined by Gerardo Contreras (item #bi2001007597#) and Oscar-René Vargas (item #bi2002003072#), respectively. These works are very critical of the outcomes from such programs, but do not offer alternative models. A related work is the analysis by Juan P. Pérez Sainz et al. of the impact of globalization on specific communities in Guatemala, El Salvador, and Costa Rica (item #bi2001007598#). Of particular interest is Colburn and Sánchez's surveys on the views expressed by private-sector leaders about the new economic policies (item #bi2003000033#).
The concern with economic policy is reflected in studies seeking new routes for regional development, as in the volumes edited by Larraín (item #bi2003000030#). These two works also examine in detail the role of economic integration and monetary union, a topic also dealt with by Ballestero (item #bi2003000037#).
The preoccupation with the adverse impacts derived from economic policies implemented in the region has led to more attention directed toward the role of small and microenterprises as a means to generate employment. Justo Aguilar, José Cordero, and Sandra Trejos present a quantitative study on the determinants of the export capacity of small enterprises in Costa Rica (item #bi2003000034#). Alvaro Trigueros examines the institutional framework that supports small firms, thus providing a revealing picture of the informal economy (item #bi2002002880#), while a work published by the Consultoria Interdisciplinaria en Desarrollo presents results from sample surveys on the financial structure and needs of small enterprises (item #bi2002003071#). The case of small firms in the wood industry in Nicaragua is presented by Mario D. Parrilli, Túpac Barahona, and Eddy Narváez (item #bi2001003316#).
There is a growing interest in the region about the workings of labor markets. Denise Stanley examines the demand for labor in the mariculture sector in Honduras (item #bi 00006394#), while the gender aspects of the Costa Rican labor market are analyzed by Mabelle Figueroa and Pilar Ramos (item #bi2003000032#) and the condition of women in the Nicaragua maquiladora industry is analyzed by Sandra Ramos López and Julia Vargas (item #bi2001003315#). A comprehensive study of the working conditions at the Honduran maquiladoras is presented by Ver Beek (item #bi2002004081#).
On the financial sector, Cáceres quantifies the interdependence between lending and money-market interest rates in El Salvador and Guatemala, and the causality relationship of interest rates across both countries (item #bi2005000149#). Hidalgo Bogantes and Vindas Sánchez present a comprehensive framework to analyze interest margins in commercial banks (item #bi2001003765#).
Two interesting historical works are included in this review, Carlos Hernández's socioeconomic report on the intergenerational destiny of tailors in San José, Costa Rica (item #bi2001003799#) and the study of the coffee industry in Nicaragua by David Robleto Lang (item #bi2002003073#). A related work is Lizcano's review of economic developments in the region during the past 50 years (item #bi2001007850#).
Other topics receiving attention are the effectiveness of rural credit programs from the point of view of the new institutional economics (item #bi2003000038#), the geographical aspects of poverty in Guatemala (item #bi2001000762#), and the evaluation of the damages from Hurricane Mitch in Guatemala (item #bi2001007595#). Two studies on environmental topics are of special interest: one includes an analysis of the potential in Central America for carbon sequestration (item #bi2003000031#), and the other contrasts traditional neoclassical economics with environmental economics and examines a framework to reconcile both approaches (item #bi2001007599#). The study of the state of the region—the full text and its English summary—is a valuable analysis of the integration process in the region (item #bi2001007596#). [LRC]EL SALVADOR
The relatively few studies on El Salvador annotated for this volume address principally the process of reconstruction following the cessation, in 1992, of the country's long armed conflict (items #bi2005000057# and #bi 00003447#); and issues of poverty and income distribution (items #bi 00007242# and #bi2005000058#). [CZ]