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date: 23 May 2017

Economic Integration in 19th- and 20th-Century Central America

This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Latin American History. Please check back later for the full article.

Since their independence, the countries of Central America have made several different attempts at political and economic integration. During the nineteenth century, without the connection to the Spanish colonial model, the political powers of each of the former provinces took sides, some in favor of reestablishing a centralized power, embodied by a federal republic, while others favored regional political jurisdiction as well as economic autonomy for the nascent nation-states. The latter group ultimately prevailed.

Toward the middle of the twentieth century, economic integration, driven by the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC), resulted in the creation of the Central American Common Market, aided by the dynamic economic growth of the 1960s. The border dispute and subsequent war between Honduras and El Salvador concluded this chapter.

The process of integration was revived during the 1980s after the signing of the Esquipulas Peace Agreement in order to move past the political crisis in the region, culminating in the creation of the Central American Integration System (SICA). SICA evolved through negotiations between regional economic groups and the national governments in order to coordinate their respective interests, and it was driven by the needs and demands of free trade as well as economic globalization.