Dueda Externa, Estabilizacion y Liberalizacion en Costa Rica: Respuestas de Economia Politica Ante la Crisis Fiscal
Creators:González Vega, Claudio
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 1825
This paper examines the accumulation of political economy pressures that led to the fiscal crisis of the early 1980s in Costa Rica. It claims that ample access to foreign financial assistance, during a balance of payments crisis, is not necessarily welfare improving, since it modifies expectations of reform and the behavior of the authorities. Entitlements in the form of exchange rate and credit subsidies led to Central Bank losses and to further inflationary pressures.