wow-inequalities/02-data/intermediate/wos_sample/87ca464f85d7880823260c9f36568a66-sanchez-marco-v.-an/info.yaml

abstract: 'Costa Rica also adopted the Washington Consensus type of reforms, but in

  a much more gradual and less `orthodox'' way than the other countries in

  the region. It has combined import liberalization with active export

  promotion. By the 1980s, Costa Rica already had relatively few

  restrictions on capital inflows. Nonetheless, further liberalization of

  the capital account and legislative changes easing the entry of maquila

  industries and establishment of firms in export-processing free zones

  led to a boom in foreign direct investment in the 1990s. Despite the

  inflow of foreign capital, the government managed to stop the exchange

  rate from appreciating, keeping it competitive during most of the 1990s

  with a managed floating exchange regime. Economic growth has been

  volatile but on average the economy expanded at an annual growth rate of

  4.3 per cent during 1985-2001. Exports have been the engine of Costa

  Rica''s growth performance, especially non-traditional exports supported

  by export promotion policies (tax credit certificates, export-processing

  free zones and maquilas) and, since the late 1990s, exports by the Intel

  plant in the country. Growth in employment lagged behind gross domestic

  product growth, but was still substantially higher than growth of the

  labour force. Most new jobs were created in the formal sector. Real

  labour income increased, but due to growing demand for skilled workers,

  labour income inequality increased significantly. Income inequality also

  increased at the household level. The incidence of absolute poverty has

  remained stable, however, since the mid-1990s, thanks to an increase in

  employment and average income. Simulations with the computable general

  equilibrium model for Costa Rica indicate that trade liberalization

  tends to lead to increasing inequality of income, given the combined

  effect of significantly higher labour income in the most dynamic

  economic sectors, especially those intensive in the use of skilled

  workers, and a reduction in labour incomes in agriculture. Simulations

  also show, however, that because of the generally positive outcomes for

  employment, trade liberalization seems to have generated positive,

  though small, effects towards poverty reduction. Poverty also falls

  under the scenario of further trade integration through the Free Trade

  Area of the Americas and a worldwide World Trade Organization agreement.

  Not all workers will benefit from trade integration, however. Those in

  agriculture, in particular, would face falling employment and real

  incomes.'
affiliation: 'Sanchez, Marco V., ISS, The Hague, Netherlands.

  Sauma, Pablo, Natl Univ Costa Rica, San Jose, Costa Rica.'
author: Sanchez, Marco V. and Sauma, Pablo
author_list:
- family: Sanchez
  given: Marco V.
- family: Sauma
  given: Pablo
booktitle: 'WHO GAINS FROM FREE TRADE: EXPORT-LED GROWTH, INEQUALITY AND POVERTY IN

  LATIN AMERICA'
da: '2023-09-28'
editor: Vos, R and Ganuza, E and Morley, S and Robinson, S
files: []
isbn: 978-0-203-96583-2
language: English
number-of-cited-references: '18'
pages: 204-230
papis_id: e240343daf17494261e9f5134d583b72
ref: Sanchez2006costarica
series: Routledge Studies in Development Economics
times-cited: '1'
title: Costa Rica - export orientation and its effect on growth, inequality and poverty
type: article
unique-id: WOS:000278891300008
usage-count-last-180-days: '2'
usage-count-since-2013: '5'
volume: '50'
web-of-science-categories: Economics
year: '2006'