Reforming a Small Resource-Rich Developing Market Economy: Costa Rica

Gustavo. Barboza and José. Cordero

in Resource Abundance and Economic Development

Published in print October 2004 | ISBN: 9780199275786
Published online April 2005 | e-ISBN: 9780191602160 | DOI:

Series: WIDER Studies in Development Economics

Reforming a Small Resource-Rich Developing Market Economy: Costa Rica

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This chapter explains why Costa Rica’s potentially favourable endowment of social capital delayed reform and economic recovery. It analyses the country’s growth collapse in the early 1980s and economic reforms initiated in 1985. It is shown that the ambitious expansion of social entitlements outstripped the economy’s capacity to sustain it. Forced industrialisation distorted the economy through the 1960s and 1970s and caused it to lose momentum. The accumulated social capital then retarded economic reform. However, social capital did allow reforms to proceed more smoothly and with less hardship for the poor.

Keywords: Costa Rica; economic reform; resource-abundant countries; growth collapse

Chapter.  5985 words. 

Subjects: Economic Development and Growth

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