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The ‘Political’ Economies of Central America: Foreign Aid and Labour Remittances

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  • David Kaimowitz

Abstract

This paper reviews recent literature to show how foreign aid and labour remittances have transformed Central America's macroeconomy, state apparatus and class structure over the last ten years. They have lifted real exchange rates, changed the composition of investment, lowered food prices, and directly supported large numbers of people. Control over these resources is now a major focus of political activity and donors play a greater role in economic policy. Project administration has become a major function of the state. Planning and public sector personnel management have become more difficult. Foreign funds have favoured decentralization and increased participation, but they have also weakened the core capacity of the state to execute policies. Transfers have fomented new social groups including sectors supported by remittances, foreign‐financed soldiers, public employees, non‐traditional export producers, financial intermediaries who channel remittances and refugees.

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  • David Kaimowitz, 1990. "The ‘Political’ Economies of Central America: Foreign Aid and Labour Remittances," Development and Change, International Institute of Social Studies, vol. 21(4), pages 637-655, October.
    • Handle: RePEc:bla:devchg:v:21:y:1990:i:4:p:637-655
    DOI: 10.1111/j.1467-7660.1990.tb00393.x
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    References listed on IDEAS

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    1. Godfrey, Martin, 1983. "Surplus labour as a source of foreign exchange?," World Development, Elsevier, vol. 11(11), pages 945-956, November.
    2. J. Edward Taylor, 1987. "Undocumented Mexico—U.S. Migration and the Returns to Households in Rural Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 626-638.
    3. Russell, Sharon Stanton, 1986. "Remittances from international migration: A review in perspective," World Development, Elsevier, vol. 14(6), pages 677-696, June.
    4. Wuyts, M.E., 1989. "Economic management and adjustment policies in Mozambique," ISS Working Papers - General Series 18768, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Morss, Elliott R., 1984. "Institutional destruction resulting from donor and project proliferation in Sub-Saharan African countries," World Development, Elsevier, vol. 12(4), pages 465-470, April.
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    Cited by:

    1. George Irvin, 1991. "New Perspectives for Modernization in Central America," Development and Change, International Institute of Social Studies, vol. 22(1), pages 93-115, January.
    2. Weller J., 1992. "Exportaciones agricolas no tradicionales en Costa Rica, Honduras y Panama: la generacion de empleo e ingresos y la perspectivas de los pequenos productores," ILO Working Papers 992997153402676, International Labour Organization.
    3. Kazi Abdul, Mannan & A.O, Krueger, 1996. "Sustainability of the new economy: An empirical study of Bangladeshi migrants in Moscow," MPRA Paper 102520, University Library of Munich, Germany, revised 1996.

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