¹ú²úСßÏÅ®

In collaboration with leading researchers and research institutions in the region, including the , ,ÌýInstituto Centroamericano de Estudios Fiscales and the , CLALS led in an ambitious project about the composition and role of Central American elites who have long played an enormous role in shaping the political and economic landscape of Central America. This multi-year program of research, dialogue, and publication was funded by the Ford Foundation.

The investigation explored historical context, transformation, and continuity in elite composition as well as how elites relate to the economic, political, and social orders in the five core countries of the isthmus - Guatemala, El Salvador, Nicaragua, Honduras and Costa Rica. We aimed, in the first instance, to fill an important scholarly gap. Alexander Segovia's book on the structural transformation of the Salvadoran economy during the 1990s (Cambio estructural, políticas macroeconómicas y pobreza en El Salvador), and useful historical studies published during the 1980s and 1990s (e.g. Jeffery Paige's Coffee and Power: Revolution and the Rise of Democracy in Central America and James Mahoney's The Legacies of Liberalism: Path Dependence and Political Regimes in Central America) followed a long tradition of analogous works produced during the 1960s (e.g. Torres Rivas' classic analysis Interpretación del desarrollo social centroamericano) that have not been matched in the contemporary period.

Among the goals of this project were to identify and map the sectoral and territorial economic underpinnings of contemporary elites in these five countries, the institutional spaces in which elites exercise power, develop comparative studies of disputes around fiscal policy, and consider the role of relations between Central American elites with the U.S. and with the broader international arena. Our research highlighted continuity and change in all aspects. We explored how the economic landscape gives rise to political interests, and catalogue the organizational mechanisms through which elites seek to channel their interests into public policy. We described and analyzed elite relationships to different components of the state and, where relevant, their ties to illicit actors. The research empirically documented the socio-political attitudes of Central American elites and assessed how those attitudes translate into behaviors. 

Costa Rica

This three-day seminar in San José, Costa Rica, November 1-3, 2012, was convened to discuss and debate commissioned papers and the project's progress. Highlights of the seminar included the following:

• Representatives from ICEFI delivered a general outline of a publication that will be composed of five country studies exploring how elites exercise power within the fiscal arena;
• Territory remains a cutting-edge method to expand accumulation in Central America. PRISMA representatives presented ideas which will lead to an edited volume on the topic, with in-depth examinations of the regions of Péten and Mosquitia; Participants revisited the historical essay commissioned on Honduras, and argued that given recent political events including the 2009 coup, the country was an outlier in the periodization of rupture;
• Papers commissioned on the axes of accumulation in Guatemala, El Salvador and Costa Rica were reviewed and ideas were exchanged regarding drafts for Nicaragua and Honduras;
• Elites do not exist without a relationship to the state. Discussions were held on the continuing importance of state formation in the face of globalization and how the implementation of structural adjustment policies has affected equality within Central American societies;
• The current landscape of elites in the region was discussed, including the emergence of sharp divisions of elites within Costa Rica in relationship to the passage of CAFTA, the role of elites in the media, and ideas for a paper on intellectual or "organic" elites.

San Salvador

The project's second public dissemination event was held in July 2012 at the Sheraton Presidente Hotel in San Salvador. The discussion drew a great deal of media coverage; the project’s Co-PI’s, Eric Hershberg and Alex Segovia were interviewed in a morning news program prior to the event and news clips appeared on various television networks in the days following. The publicity drew a diverse audience of over 100, to which Eric Hershberg delivered a general overview of the project and Alex Segovia, Juan Pablo Pérez Sáinz, Hugo Noé Pino, and Aaron Schneider presented their initial findings. 

Segovia spoke on the axes of accumulation within El Salvador and efforts at regional collaboration. Pérez Sáinz, whose research for the project has focused on inequality and inclusion, presented findings for El Salvador, painting a rather bleak picture of an increasing portion of the Salvadoran population being characterized as excluded both in terms of their incorporation through the labor markets and social citizenship. Schneider examined fiscal policy as an element of state building and Pino gave an overview of ICEFI’s work with the project on how elites exercise power within the fiscal arena, including the manipulation of media and willingness or lack thereof to build coalitions. For further information on the CLALS' collaboration with ICEFI, please view the summary of the project’s first dissemination event held in Washington, DC. 

While in San Salvador for the project’s second public dissemination event, the steering committee met for two days and made great headway on future steps for the project, including: 

The next substantive meeting for the project will be held in the beginning of November in Costa Rica.

Washington, DC

While issues of violence and security have dominated the Washington agenda on Central America and are of undeniable importance for the region, this narrow lens largely ignores the fundamental dynamics at play. Offering deeper analysis, prominent Central American economists Maynor Cabrera, Ricardo Barrientos, and Hugo Noé Pino of the Instituto Centroamericano de Estudios Fiscales – Central American Institute of Fiscal Studies (ICEFI) and Aaron Schneider of Tulane University, gathered for a panel discussion at the Woodrow Wilson International Center for Scholars to discuss the findings of ICEFI’s recently-released report, "Central American Fiscal Policy in a Time of Crisis." The panelists identified the current Central American crisis in terms of politics and economics; with increasing political fragmentation, the lack of long term agendas, and low citizen confidence in government institutions within a region struggling to maneuver through its insertion in the global capitalist market.

Unlike some countries in South America, such as Brazil and Chile, Central America has not experienced a rebound from the 2007 global economic crisis. The global recession had the detrimental effect of reversing positive trends towards reducing poverty levels in the region. Panelists mentioned a number of factors that continue to influence the state of crisis, to varying degrees of these five countries of the isthmus, such as the ineffective employment of valuable redistributive mechanisms. In general the tax burden is tied to imports, which have fallen as a result of the global financial crisis. Direct tax revenues continue to be low due to tax evasion and wide spread state granted exemptions, thus minimizing their ability to alter inequality through increased social spending. Furthermore, countries continue to grapple with insufficient investment in physical infrastructure, corruption and climate change induced natural disasters.

Traditional mechanisms to encourage fiscal stability, which often require austerity measures, are not viable for Central America the scholars argued, especially given the clear correlation between increased social spending and decreasing poverty levels. Similarly, countries that have historically invested in education and social services, like Costa Rica and Panama, remain the current investment choice for global companies because of their well-trained workforce. The major challenge remains political. For instance, the capacity and technical knowledge to create effective fiscal policies exists; the impetus in terms of implementing economic reforms is linked to resistance from both new and longstanding political and economic interests. Successful reform requires a focus on creating citizen trust in government institutions; and a reconceptualization amongst the public of democracy as a process rather than merely voting for public officials. Public finances also need to be strengthened in order to provide for adequate social spending. In order to accomplish such tasks, there needs to be coalition building between economic elites, the public sector and the civil sector, recognizing that fiscal reform is necessary for the continued economic growth and social development of the region. For its part, ICEFI is working on increasing “fiscal citizenship," through the generation of and dissemination of knowledge.