Costa Rica: the development of compromise

Ludovico Feoli

Chapter 17 in The Elgar Companion to the Economies of Latin America and the Caribbean, 2025, pp 362-375 from Edward Elgar Publishing

Abstract: This chapter explores Costa Rica's development over the past century and a half, emphasizing the critical role of political compromise. Costa Rica's successes in institution building, social investment, and democratic governance stem from key compromises among social forces during pivotal reform periods. In the late 19th century, liberal reformers adapted their strategies to address social issues, setting a precedent for future reforms. The 1940s saw another significant compromise when labor movements and economic crises drove elites to embrace social reforms. The 1948 armed struggle empowered middle-class reformers to advance state-oriented development, balanced by strong opposition that fostered ideological and political pluralism. Social mobilization played a crucial role, acting as a balancing mechanism between competing political forces and encouraging negotiation and gradualism. However, this gradualism and compromise came at a cost, including persistent high deficits, rising debt, and increasing inequality. Despite these challenges, Costa Rica's commitment to pluralism and democracy ensured that no single political group could dominate entirely, even as the economy liberalized in the 1980s. The chapter underscores how these dynamics of compromise, mobilization, and their associated costs have shaped Costa Rica's resilient and inclusive development.

Keywords: Costa Rica; Economic Development; Politics of Compromise; Gradualism (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317196
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