A farewell to arms: the peace dividend of Costa Rica's army abolition

Alejandro Abarca and Surayabi Ramirez Varas

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper estimates Costa Rica's peace dividend following the end of the civil war and the army's abolition in 1949 with synthetic control. We find that the country's average per capita GDP growth increased from 1.46% to 2.28% between 1950-2010, relative to a counterfactual Costa Rica that did not take this path. Three main mechanisms are offered to explain these results: After the end of the civil war and the proscription of the military, the country decided to invest substantially in infrastructure, education, and health, which drove economic development. Second, the new constitution reduced power concentration by the executive branch and increased its accountability. Third, the military's proscription guaranteed the survival and the long-run success of these political and socio-economic reforms.

Keywords: civil war; economic growth; peace; economic development; Latin America; democratization (search for similar items in EconPapers)
JEL-codes: D74 O54 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2025-02-27
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Published in The Journal of Development Studies, 27, February, 2025. ISSN: 0022-0388

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