UPPSALA UNIVERSITET
Ekonomisk-historiska institutionen
A relatively easy task?
- Hirschman’s theory of trade dependency applied to the U.S. – Central American case
D-uppsats HT - 2007
Författare: Lars Karlsson
Handledare: Peter Hedberg
Datum för ventilering: 2008-01-17
Tables and figures
Tables
Table 1.1 Possibility matrix
Table 2.1 Central American exports in the year 1913, in US dollars
Table 3.1 Central American trade concentration 1948-1968
Table 3.2 Percentage of total trade for Central American countries conducted with U.S.
Table 3.3 Central American trade concentration 1948-1968, excluding U.S.
Table 3.5 The Central American countries terms of trade 1948-1968, 1948 = 100
Figures
Figure 3.1. Costa Rica’s terms of trade 1948 – 1968 (1948 = 100)
Figure 3.2. El Salvador’s terms of trade 1948 – 1968 (1948 = 100)
Figure 3.3 Guatemala’s terms of trade 1948 – 1968 (1948 = 100)
Figure 3.4. Honduras’ terms of trade 1948 – 1968 (1948 = 100)
Figure 3.5. Nicaragua’s terms of trade 1948 – 1968 (1948 = 100)
Figure 3.6. Development of average Central American terms of trade, average Central
American concentration of imports and average Central American concentration of exports,
(1948=100)
Contents
1. Introduction……………………………………………………………………..... pp. 1-3
1.1 Aim and scope of the research…………………………...……………………..... pp. 3-4
1.2 Methodology………………………………………….......................………….…pp. 4-10
1.2.1 Methodological problems…………………………………………………...………………...pp. 10-12
1.2.2 Literature & sources………………………………………………………….…………….....pp. 12-13
1.3 Presentation of Hirschman’s theory & prior research…….……………………….p. 14
1.3.1 A.O. Hirschmans theory of trade dependency…………………………………………….….pp. 14-15
1.3.2 Prior research…………………………………………………………………………………pp. 15-22
2. Historical background of U.S. – Central American relations…………………..…p. 23
2.1 An overview of the economic history of Central America………………………..pp.23-27
2.2 U.S. foreign policy towards Central America…………………………………….pp. 28-30
2.2.1 U.S. military intervention and subversion in Central America………………………………pp. 31-33
3. U.S. – Central American trade relations during the post-war period…………..….p. 34
3.1 Central American trade concentration 1948-1968………………………………...pp.34-38
3.2 Central America’s terms of trade 1948-1968……………………………………..pp. 39-45
4. Summary & concluding remarks…………………………………………………..p. 46
4.1 Summary…………………………………………………………………………..pp. 46-47
4.2 Concluding remarks……………………………………………………...………..pp. 47-50
5.1 Literature………………………………………………………………………….pp. 51-54
Appendix A. Central American countries trade, percentage share of principal trading partners,
pp. 55-64
1. Introduction
The conventional view concerning the role of small states in international economic and
political affairs, has been to regard them as “pawns of an inanimate chessboard”1 on which
the great nations may carry out their game of power politics. A vast literature has argued that
nation size and level of economic development are the two most important determinants of
leverage in international affairs.2
One of the earliest contributions to this school of thought was the 1945 publication of
Albert O. Hirschman’s National power and the structure of foreign trade. In this book
Hirschman put forward a theory concerning the nature of international trade relations,
suggesting that there might be “in the trading system some inherent weakness which makes it
vulnerable to the will of any government so minded to use it in the pursuit of power”.3 Even
though the inspiration for Hirschman’s book was the trade policies of Nazi-Germany during
the 1930’s, his main theory was not dependent upon such factors as bilateralism and exchange
control, typical for this period. Rather, Hirschman’s contention was that the basic “structural
characteristics of international economic relations… make the pursuit of power a relatively
easy task”.4
Hirschman pointed out that even though conventional trade theory was fundamentally
correct in its assertion that international trade results in a state of mutual gain and inter-
1
Mathisen, Trygve (1971), The functions of small states in the strategies of the great powers. Oslo.
2
Hirschman, Albert O., (1980), National power and the structure of foreign trade. New York. Richardson, Neal
R. & Kegley jr, Charles W. (1980), Trade dependence and foreign policy compliance – A longitudinal analysis.
International studies quarterly, Vol. 24 No.2, pp. 191-222, Dos Santos, Theotonio (1970), The structure of
dependence. The American Economic Review Vol. 60 No. 2, pp. 221-236 Vital, David (1967), The inequality of
states – A study of the small power in international relations. Oxford. Wittkopf, E.R. (1973), Foreign aid and
United Nations votes: a comparative study. American Political Science Review Vol. 67, pp 868-888
3
Hirschman (1980), p. xvi
4
Hirschman (1980), p. vi
1
dependence, the conventional theory didn’t account for the fact that it left some nations more
dependent than others. This problem was especially accentuated when the trade was
conducted between nations of differing size and economic development. When a large and
powerful economy like that of Germany trades with a small underdeveloped nation, the
relative importance of that trade will almost invariably be stronger for the smaller nation. The
large and powerful nation – in this case Germany – “having a much smaller stake in this
common trade than the small country, is able to bend the latter to its will by subtle or not-sosubtle hints that the benefits of this trade might otherwise be withdrawn”.5
Hirschman’s theory came to have a profound influence on the field of research that has
been dealing with Nazi-Germanys trade policies during the inter-war years. As stated above
however, Hirschman himself never regarded his findings as specific to the German case, but
envisioned a much broader application for his theory. The strong similarities between
Hirschman’s theory and what has come to be known as the school of dependencia has been
noted by researchers, along with an expression of dismay over the fact that the two has never
been proparly introduced.6 In the second edition of National power and the structure of
foreign trade, Hirschman himself recognised the similarities between his work and the
subsequent writing of dependency theorists, proclaiming himself to be “the frequently
unacknowlegded founding grandfather”7 of dependency theory.8
5
6
Hirschman (1980), p. viii
Baldwin, David A. (1981), Review of National power and the structure of foreign trade. The American
Political Science Review Vol. 75 No. 4, pp. 1105-1106
7
Hirschman (1980), p. vi
8
The basis for what would later evolve into modern day “dependency theory” has traditionally said to have been
the simultaneous discovery of Raúl Prebisch and Hans Singer in the 1950’s of a deteriorating terms of trade for
primary commodities relative to manufactured goods, often referred to as the Prebisch-Singer-thesis. Raúl
Prebisch made his discovery while working as director for the Economic Commission for Latin America
(ECLA), and presented his findings in the 1950 publication The economic development of Latin America and its
principal problems.
2
This essay, therefore, seeks to test the usefulness of Hirschman’s theory of trade
dependency in explaining U.S. – Central American trade relations, a field of research that has
traditionally been highly influenced by dependency analysis. The test will be carried out by
applying Hirschman’s theoretical framework on U.S. – Central American trade relations
during the first part of the post-war period, using the same statistical techniques that
Hirschman utilized in his original study of Nazi-German trade policy.
1.1 Aim and scope of the research
In this essay the broader applicability of Albert O. Hirschman’s theory of trade dependency –
which was first presented in his 1945 publication National power and the structure of foreign
trade – is examined. Hirschman’s theory has traditionally been used to explain the nature of
Nazi-Germanys trade policies during the inter-war years. This essay aims to investigate
whether Hirschman’s theoretical framework may be used to interpret U.S. – Central American
trade relations during the post-war period, using the same statistical techniques that
Hirschman utilized in his original study.
In section 1.2 I will explain the general idea of my examination, and the specific
methodological choices that have been made. In section 1.3.1 I will give a thorough
description of Hirschman’s theory of trade dependency, which is followed by a broad
presentation of the academic work inspired by or critical to Hirschman’s theory in section
1.3.2, which also includes a closer look at small state research and dependency theory.
Section 2.1 outlines the economic history of the five Central American nations. Section 2.2
deals with the history of U.S. foreign policy towards Central America, and tries to show the
strategic importance of the Central American region for U.S. planners during the relevant time
period. Section 3 presents my examination of the U.S. – Central American trade relations
3
during the post-war period, containing a calculation of the trade concentration towards the
United States for the five Central American countries, during the period of 1948 to 1968
(section 3.1), as well as an in-depth analysis of the development of the five countries terms of
trade during that same period (section 3.2). This is followed by a brief summary of my
findings (section 4.1), and then conclusions are drawn in section 4.2.
1.2 Methodology
In National power and the structure of foreign trade Albert O. Hirschman makes three
statistical inquiries to test his theory of trade dependency. In this paper I will repeat one of
these inquiries – dealing with the development of trade concentration for small and
underdeveloped countries – using the same statistical instrument that Hirschman used in his
original study.
For this purpose Hirschman constructed an index of trade concentration which is presented
below, and where C stands for the concentration of a country’s trade, Xi for the value of the
investigated country’s trade conducted with trading partner i, while X constitutes the total
trade of the investigated country.9
C = √ ∑ (Xi / X) ¨2
The index is thus a function of both the absolute number of other countries with which the
examined country conducts its trade, as well as the relative distribution of this trade amongst
the various trading partners.
9
Hirschman (1980), p. xviii
4
The calculations of Hirschman’s index of concentration are made in the following way.
First you calculate the percentage held by each of the trading partners of country X’s total
imports/exports. You then calculate the sum of the squares of these percentages. The index is
then obtained by calculating the square root of this sum.10
The maximum value of the index is always 100. This concentration of trade is reached
when a country trades exclusively with one single country (√100¨2 = 100). The lowest
possible value of the index is decided by the number of countries with whom X conducts
trade. If for instance, X has 10 trading partners, then the lowest possible value of the index
would be reached in the case when each of the trading partners holds 10% each of X’s total
trade (√10x10¨2 = 31,6). The index could theoretically approach zero in the event that a
country would trade with an infinite number of trading partners which each held an infinitely
small share of the country’s total trade.
Hirschman conducted this examination with the purpose of proving that the natural
tendency of small nations to spread their trade over a large number of trading partners11, was
offset in the case of a number of South-East and East-European countries, because of their
close ties to Nazi-Germany. Germany had, according to Hirschman, been exercising a powerpolicy in its trade relations with these countries, resulting in a trade pattern for these SouthEast and East-European countries which was very highly concentrated towards the German
market. The resulting strong dependence of Eastern Europe upon its trade with Germany,
Hirschman emphasized, was not necessarily a conscious goal envisioned by German leaders.
Rather, it was the positive externality of a policy designed to accommodate a wide array of
German interests, all consistent with the strategic importance for Germany of having a strong
10
Hirschman (1980), p. 98
11
Hirschman (1980), p. 31 ”… it will be an elementary defensive principle of the smaller trading countries not to
have too large a share of their trade with any single great trading country, so that the integration of their
economies with those of the great countries… may be kept at a minimum compatible with their economic wellbeing.”
5
position in South-East and Eastern Europe. Put another way, Hirschman’s theory predicts that
a trade relation will naturally evolve into a relation of usurpation12 given that it exhibits three
special characteristics. The first prerequisite is that one of the trading partners should be a
highly industrialized, relatively large trading nation.13 The second condition is that the trading
partner with which this large nation conducts its trade, should be a relatively small trading
nation; preferably somewhat underdeveloped, with a rather undiversified range of production
for exports. The third and final prerequisite is that there should be, on the part of the large
trading nation, some kind of a motive – political, military, economic or otherwise – which
would make it interested in controlling the actions of the smaller trading nation. The
implications for my examination of the Central American countries trade concentration, is that
we should find an increasing concentration of these countries trade towards the U.S. due to
three factors; 1) The large size and economic prosperity of the United States of America, in
concert with its unrivalled status as the worlds foremost economic superpower following
WWII 2) the relatively small size and economic backwardness of the Central American
countries and 3) the strategic importance for the U.S. of controlling the Central American
region (i.e. the motive).14
These three factors will be thoroughly discussed in section 2. of this paper, where I will
show that U.S. – Central American trade relations following WWII demonstrated all of the
special characteristics mentioned by Hirschman, which would make it an ideal case with
12
The basis for this usurious relationship being a high level of trade concentration on the part of the small and
weak country towards the markets of the large and powerful country.
13
The word “large” is used somewhat inter-changeably throughout National power and the structure of foreign
trade. Therefore it is not all that easy to discern whether this adjective is used as a description of the quantum of
a country’s foreign trade, or whether it simply refers to the geographical size of that same country. With some
obvious exceptions, however, the geographical size of a country can be said to be somewhat proportional to the
quantum of its foreign trade, making the distinction something of a moot point. Therefore, in the following
discussion the word “large” will be used to denote both geographical size as well as a large quantum of foreign
trade.
14
Hirschman (1980), pp. 34-40
6
which to test his theory of trade dependency. The development of the Central American
countries trade concentration following WWII will thereafter be presented in section 3.2.,
which will conclude the first part of my examination of Hirschman’s theory of trade
dependency.
The second part of the examination will be to take a take a closer look at the development
of the external economic circumstances of the Central American countries during the same
time period. Hirschman’s theory of trade dependency predicts a correlation between the
development of a nations concentration of trade and the general condition for its external
economic relations, which in this paper will be measured by looking at the countries terms of
trade. More precisely, Hirschman’s theory predicts that trade concentration and terms of trade
development will be inversely correlated to each other. If we for example were to find that
Central American trade in the year of 1948 was highly concentrated towards the United States
of America, this – according to the logic of Hirschman’s theory of trade dependence – would
have given the U.S. a position on Central American trade similar to that of a monopolist. A
country with this kind of a monopoly position could then, according to Hirschman, use its
coercive power to obtain more favourable conditions for its foreign trade with the dependent
countries. Much like a monopolist, the stronger country would thus be expected to act as a
price-giver, rendering in highly unfavourable terms of trade for the price-takers, i.e. the
weaker countries.15
Presented below is a possibility matrix for the findings of the two examinations that will
be conducted in this paper. There are 12 possible combinations, 6 of which would lend
support to Hirschman’s theory of trade dependency. The findings are held to be consistent
with Hirschman’s theory in the cases where the concentration of trade and the terms of trade
for the examined countries can be shown to be inversely correlated to each other. As I
15
Hirschman (1980), pp. 26-33
7
mentioned above, according to Hirschman’s theory, a high concentration of trade should have
a detrimental effect upon a nations external trading conditions. Thus, if we for example would
find a diminishing concentration of the Central American countries trade throughout the
examined period, we would then expect the general condition for the regions external trade –
as expressed by the development of its terms of trade - to be improving. This result is
displayed in square number 10 in the possibility matrix below. As indicated by squares 2 and
6 in the matrix, if the examination instead would show a diminishing concentration of trade
along with a constant or deteriorating terms of trade, such a finding could not be considered as
being consistent with Hirschman’s theory. If there is no movement in the concentration of
trade during the examined period, this finding can be said to be consistent with Hirschman’s
theory under the premises that there is either no movement in the terms of trade (squares 1
and 4), a deteriorating terms of trade in the case of a consistently high concentration of trade
(square 5), or an improving terms of trade in the case of a consistently low concentration of
trade (square 12).
Table 1.1 Possibility matrix
Possible
Constant high
Diminishing
Increasing
Constant low
findings
concentration
concentration
concentration
Concentration
Constant
1) Consistent
2) Not consistent 3) Not consistent
4) Consistent
terms of trade with theory
with theory
with theory
Deteriorating
6) Not consistent 7) Consistent
8) Not consistent
with theory
with theory
5) Consistent
terms of trade with theory
Improving
9) Not consistent 10) Consistent
terms of trade with theory
with theory
with theory
with theory
11) Not consistent 12) Consistent
with theory
with theory
8
For whatever reason Hirschman actually never defined what he thought should be
considered as high or low values of his index. The only clue to this question is given on page
106 in his book, where he talks about countries with a “relatively high foreign trade
concentration”, and roughly defines them as countries whose index values are “usually above
40”.16 In the analysis of my statistical findings I will therefore hold values of above 40 as
denoting a high concentration of trade, while values below 40 will be defined as a low
concentration of trade.
Something short should also be said concerning the choice of time-frame for my
examination, i.e. the twenty year period between 1948 to 1968. First of all, looking at the
structural characteristics of post-war trade relations, we of course find major differences when
we compare it to the structure of inter-war trade. It is, however, a clearly expressed contention
in National power and the structure of foreign trade that the transition from a bilateral to a
multilateral trading system did not in any way eliminate the basis for Hirschman-like trade
dependence.17 This being said, the choice of time-frame was more or less determined by the
specific case with which this essay seeks to test Hirschman’s theory, i.e. Central America’s
trade relations with the U.S. For several reasons, which will be discussed much more
thoroughly in section 2 of this essay, the first decades following WWII ought to be an ideal
period for which to test this case. The post-war world saw the emergence of the United States
of America as a political, military, and above all economic superpower; the U.S. was actually
16
Hirschman (1980), p. 106
17
In the preface to the second edition of National power and the structure of foreign trade Hirschman had the
following to say about his theoretical framework, “I dwelt not so much on the diabolical cunning of the Nazis, or
on Dr. Schacht’s technical innovations such as bilateralism, exchange controls and so on, as on the structural
characteristics of international economic relations that, as I wrote, ‘make the pursuit of power a relatively easy
task.’… “‘power elements and dis-equilibria are potentially inherent in such ‘harmless’ trade rela-tions as have
always taken place, e.g., between big and small, rich and poor, industrial and agricultural countries – relations
that could be fully in accord with the principles taught by the theory of international trade’”, Hirschman (1980),
pp. vi-vii
9
supplying the world with roughly half of its demand for goods and services during the early
post-war years.18 If one is to test a proposed weakness in the structural characteristics of
international trade, which allegedly makes it an “easy task” for a large trading nation to
dominate its small trading partners through coercive trade policy, why not perform the test on
the largest nation available, during a time when “the amazing extent of [its] power”19 was the
most evident.
Furthermore, the chosen twenty year period has one more advantage in that it constitutes a
more or less homogeneous time-frame, as far as the basic structural traits of the world
economy is concerned. The examination starts at a time when the structural rearrangements of
the pre-war international economic order had been more or less completed, and it ends before
the structural crisis of the early 1970’s. No doubt, there were many other external factors
during the chosen twenty year period which may have influenced the character of U.S. –
Central American trade relations, but none of the same magnitude.
1.2.1
Methodological problems
In the examination of the Central American countries concentration of trade, one problem of
definitions arose. For certain countries it was hard to decide whether their percentage of the
Central American countries trade should be supplemented by the percentage of countries over
which they held a considerable influence. How for instance should a country like the
Netherlands be treated? Should one only account for the percentage of total Central American
trade conducted by the nation itself, or should one also account for the percentage held by the
18
LaFeber, Walter (1994), The American age – United States foreign policy at home and abroad. New York, pp.
457-458
19
LaFeber (1994), p. 458
10
Netherlands Antilles?20 I finally decided to use the same reasoning that Hirschman used for
his examination, namely to count these examples as different countries, except for in the very
special case that there had taken place an actual annexation of the territory.21
I also chose to follow Hirschman’s example in regards to another obvious methodological
problem. In the statistical account of world trade that is provided by the UN’s Yearbook of
International Trade Statistics (YITS) there are certain gaps of information, because of the fact
that the YITS only presents the trade value of each countries most important trading partners.
In Hirschman’s statistics – which was provided by the League of Nations International trade
statistics - the value of the trade with “non-important trading partners” was presented under
the headline of “other countries”. In the YITS this value is simply excluded, but can of course
be obtained by subtracting the sum of the values of all accounted trading partners with the
total trade of the examined country. In my examination the percentage to the total trade of
these unaccounted trading values never reached more than 3 per cent. Hirschman’s solution to
this problem was to assume that each of the unknown countries contributing to this
unaccounted value held a 0,5 percentage of the total trade.22 I believe that this is a reasonable
assumption; in any case I find it highly improbable that this assumption in any way will
contribute to an overvaluation of the concentration of trade of the examined countries. If
anything the opposite should be true, since there is numerous instances when the YITS among
the most important trading partners – i.e. the trading partners included in the statistical
20
A percentage that for some of the countries and some of the years exceeded the percentage held by the
Netherlands itself. Other examples included Panama and the Panama Canal Zone, China and Taiwan
21
Hirschman (1980), pp. 99-100. This exception was of less importance for my examination though, since no
such example presented itself.
22
See footnote on page 100 in Hirschman (1980). Included there is also a calculation by Hirschman showing that
whether or not you choose to assume that the post “other countries” is 1) one single country 2) n countries
holding a 0,5 per cent share each, or 3) an infinite number of countries all holding infinitely small shares of the
country’s total trade, the obtained value of the index doesn’t differ all that much.
11
material – has included countries holding 0,5% or less of the total trade of the examined
countries.
1.2.2 Literature and sources
The overview of the economic history of Central America, and the characterization of U.S.
foreign policy towards the Central American region - which are presented in section 2 of this
essay - are mainly drawn from the works of two historians; Victor Bulmer – Thomas’ The
political economy of Central America since 1920, and Walter LaFeber’s Inevitable
revolutions- The United States in Central America. Additional literature has been used to a
certain extent - mainly in order to add some depth to the topics discussed, or to highlight
certain aspects of an event – but the main lines in section 2 has been gathered from these two
books.
As was mentioned in the previous section, my examination of the Central American
countries trade concentration has been carried out with the use of statistical material from the
Yearbook of international trade statistics (YITS). The YITS has been published on a yearly
basis by the United Nations statistical division since the early 1950’s, and is widely
acknowledged as being the most complete statistical account of international trade following
the end of WWII. As I described in the previous section this material has a few shortcomings
– mainly gaps of information -, which resulted in some degree of methodological problems.
These problems were, however, of a minor character and should not affect the results of my
examination in any profound way. Moreover, the YITS is commonly used as the main source
of statistical material in most studies of – non-European - international trade patterns, and
hence should probably be considered standard material for these types of studies.
The information concerning the development of Central America’s terms of trade between
1948 to 1968, which is presented in section 3, has been gathered from Victor Bulmer-Thomas
12
book The political economy of Central America since 1920. The calculations of the terms of
trade are Bulmer-Thomas’ own, and should therefore probably be held up for some scrutiny.
According to Bulmer-Thomas himself the figures were derived with the use of official
statistical material from the UN-based Comisión Económica para América Latina (Economic
Commission for Latin America). The calculations of the terms of trade were done by dividing
the nominal value of each country’s exports/imports by the real value (in 1970 prices) of the
exports/imports, giving a series of price indexes for exports (Px) and imports (Pm). The net
barter terms of trade were then derived using the formula Px/Pm x 100.23 There are many
different methods by which terms of trade measurements can be derived, this being one of the
crudest examples, insofar that the volume of trade, factor productivity, and other relevant
factors are held as constant. The choice to use Bulmer-Thomas’ figures was made because of
the good fit between his index-series and the time-frame within which I sought to conduct my
examination. Other available sources to the development of the Central American countries
terms of trade were all in-complete in this aspect, either in that they did not account for all of
the five countries which I wished to examine, or in that their index-series were to short.
23
Bulmer-Thomas, Victor (1987), The political economy of Central America since 1920. New York, pp. 305-
306
13
1.3 Presentation of Hirschman’s theory & prior research
1.3.1 A.O. Hirschman’s theory of trade dependency
The historical background to Hirschman’s book was Nazi-Germanys trade policy towards the
countries of South-Eastern and Eastern Europe.24 A central theme in National power and the
structure of foreign trade is the concept of an asymmetrical gain from trade. The gains from
trade is normally said to constitute “the excess of the value to […a country] of the things
which she imports over the value to her of the things which she could have made for herself
with the capital and labour devoted to producing the things which she exported in exchange
for them”25 It is important however, Hirschman writes, that we make a clear distinction
between this objective definition of the gains from trade, and the subjective measure of that
same phenomena. The objective definition of the gains from trade only measures the
“physical surplus of goods made possible by the international division of labour”26
Hirschman’s definition of the subjective gain from trade is not – as one could be led to
believe – each of the trading nations respective share of that objective gain, but wholly
independent from it. As Hirschman points out, even if there were to be no such “physical
surplus” at all, there could still be a subjective gain from trade, under the sole premise that the
commodities being traded were somewhat differentiated.27
This distinction may seem to be nothing more than an exercise in futility, but is actually of
central importance for Hirschman’s theory, since it theoretically enables a powerful country to
24
A policy that has been described by Paul Einzig as a “bloodless invasion”. Einzig, Paul (1938), Bloodless
Invasion: German Economic Penetration into the Danubian States and the Balkans. London
25
Marshall quoted in Hirschman (1980), p. 18
26
Hirschman (1980), p. 20
27
Hirschman (1980), pp. 20-21
14
impose unfavourable objective trading conditions on a less powerful country, while binding it
to itself by virtue of the subjective gain experienced by this country from that same trade.28
The reasoning goes as follows; imagine country A, a large and prosperous nation with a
very extensive foreign trade. Now imagine that country A chooses to import a share of its
supplies from country B, a small underdeveloped nation with a relatively meagre foreign
trade, perhaps only centred around one or two principal commodities. Even though it might –
correctly – be argued that this trade will result in mutual gain and interdependence, it is clear
that the relative importance of this trade will be far higher for country B. Even if country A
were to import 100% of country B’s produce, this trade might not constitute more than a few
percentages of country A’s total imports. This highly asymmetrical subjective gain from trade
- to use Hirschman’s own expression -gives country A superior bargaining power over its
more dependent trading partner. This bargaining power may then be used to achieve goals, be
they political, economic or military in nature.29
1.3.2 Prior research
The empirical basis for Hirschman’s theory was later reconfirmed by Frank C. Child in The
theory and practice of exchange control in Germany. Child argued that Germany during the
period of 1934 to 1939, through an elaborate use of exchange controls, was able to improve
its terms of trade on the expense of its trading partners. According to Child, Germany not only
28
Hirschman (1980), pp. 23-26
29
Hirschman (1980), pp. 26-33
15
acted as a price-giver in relation to its trading partners, but actively used price
discrimination30 in order to reap the maximum benefits from its monopolistic position.31
A more extensive examination of the themes in Childs book can be found in Howard S.
Ellis Exchange control in central Europe published in 1941.In it Ellis described how NaziGermany through the establishment of bilateral clearing agreements and exchange controls
made its trade indispensable for the countries of Eastern Europe. In so doing, Germany
imposed on itself heavy costs – for example by accepting a higher price for the import of its
supplies – but was eventually reimbursed when it had grown important enough to its trading
partners as to facilitate what can only be described as economic extortion32 Nazi-Germanys
trading policies thus “persisted because it was an instrument par excellence of political
power… [t]he National Socialist state developed this totalitarian instrument to one of its most
formidable weapons”.33
In 1979 Larry Neal conducted an examination of the development of Nazi-Germanys
terms of trade during the period of 1934 to 1938. He found that the terms of trade for
Germany was actually steadily deteriorating during the whole period, which was very hard to
reconcile with Hirschman, Child and Ellis description of Nazi-Germany as a monopolistic
price-giver. Neal argued that it may have been counterproductive for Germany to raise the
prices of its exports during this time, since the German economy was in a phase of rapid
growth and thus could benefit more from a simple expansion of the quantum of exports.34
30
Price discrimination is defined as “[t]he practice of charging consumers different prices for the same good or
service” thereby giving the monopolist “ an opportunity to capture more surplus”. Besanko, David &
Braeutigam, Ronald R., (2005), Microeconomics. Hoboken, p. 448
31
Frank C. Child (1958), The Theory and Practice of Exchange Control in German - A Study of Monopolistic
Exploitation in International Markets. The Hague, pp. 53-55, 226-230
32
Howard S. Ellis, (1941), Exchange Control in Central Europe. Cambridge, pp. 282-289.
33
Ellis (1941), p. 289
34
Neal, Larry (1979), The Economics and Finance of Bilateral Clearing Agreements: Germany, 1934-8,
Economic History Review 32, no. 3., pp. 391-404
16
Small state research has traditionally been highly influenced by the school of realist
thought, subscribing to the maxim of Thucydides that “the strong do what they can and the
weak suffer what they must”.35
In The inequality of states David Vital discusses the question of the long-term viability of
smaller nations, concluding that viability in this case “is a relative quality fluctuating with
circumstances, possessed by different states in a different degree, but in no case absolutely
and finally as it is by the major powers”.36 As long as – by chance or good fortune – the
smaller nations interests do not collide with that of the great powers, the possibility for longterm survival is greatly enhanced. Should, however, a small nation depart from this order, and
follow a path of independent development which for some reason would be regarded as
unacceptable for any of the great powers “the vast disparity in economic, military and
organizational resources would soon be felt”37 Whether the smaller states of the world, in
such a surrounding, can be characterized “as fully sovereign and politically independent is
largely a matter of definition and opinion”.38
The imperative for small states to remain sensitive to the wishes of the larger and more
powerful nations is emphasised by a large literature of scholarly research. For instance,
Witkopf (1973) looked at the voting pattern of small states in the U.N. General Assembly, and
found that those countries which received U.S. aid showed a strong bias towards voting in
accordance with United States strategic interests.39 Similarly Richardson and Kegley jr.
(1980) found the same pattern when looking at nations that were in one way or another
35
Thucydides quoted in Hunter, Virginia (1973), Athens tyrannis: A new approach to Thucydides. The Classical
Journal Vol. 69 No. 2, p. 124
36
Vital (1967), p. 184
37
Vital (1967), pp. 183-184
38
Vital (1967), p. 184
39
Wittkopf (1973), pp. 868-888
17
economically dependent upon the United States.40 Looking at the strictly economic
implications of geographical size, some have even gone so far as to explain wealth
distribution by simply comparing “differences in scale”.41
Others have sought to explain the various ways in which small states may act, in order to
overcome their difficulties. Vandenbosch (1964) placed important emphasis on the U.N.
system, in granting more power to small states,42 while East (1973) has shown that due to the
smaller states inability to the gather information concerning the events of the outside world,
these states are forced to cooperate if they hope to bridge this information asymmetry.43
In The power of small states Annette Baker Fox looked at the strategies employed by
small states during WWII, and found that there were numerous ways through which a small
state could retain there independent status vis-à-vis the great powers. By forming alliances
and cooperating with other small states, making tactical concessions for certain great power
interests, as well as employing military intelligence and crafty diplomats in order to foresee
and/or influence great power behaviour, several small states were able to keep out of harms
way during the war.44
In one respect the smaller states actually had a strategic advantage towards their larger
adversaries Baker Fox argued; the great powers in all their might had an endless array of
concerns and interests with which they were constantly occupied, while the smaller states
generally only had one, keeping their autonomy intact.45
40
Richardson & Kegley jr (1980), pp. 191-222
41
Kennedy, Paul (1991), On the “natural size” of Great Powers. Proceedings of the American Philosophical
Society Vol. 135 No. 4, pp. 485-489
42
Vandenbosch, Amry (1964), The small states in international politics and organisation. The Journal of
Politics Vol. 26 No. 2, pp. 310-312
43
East, Maurice A. (1973), Size and foreign policy behavior: A test of two models. World politics Vol. 25 No. 4,
pp. 556-576
44
Baker Fox, Annette (1967), The power of small states – Diplomacy in World War II. Chicago.
45
Baker Fox (1967), pp. 180-181
18
Still, “the main boundaries of action for the small state were set by the relative military
strength of the [great powers]”46 Baker Fox concluded. Respecting these boundaries, the small
states could, as mentioned above, in many cases maximize their room for independent action,
but the presence of the great powers was always in consideration for these small states.
A school of thought that in many respects has similarities with the main lines of small
state research is that of dependency theory. Though occupied mainly with concepts such as
“core” and “periphery”, rather than “large” or “small” nations, the asymmetrical dynamics of
small- and great power interaction is just as essential for dependency theory as it has
traditionally been in small state research.
The theoretical foundation for dependency theory can be said to have been laid by the
Argentinean economist Raùl Prebisch, while working for the U.N. based Economic
Commission for Latin America (ECLA).47 Prebisch was one of the first who presented the
theoretical division of the world into an industrialised core and an underdeveloped periphery.
The relation between the two was, according to Prebisch, a consequence of the differing
modes of production in the two spheres, where the core concentrated on the production of
industrial manufactures, while the periphery had been given the task to supply the core with
primary commodities. The trouble with this division of labour was, according to Prebisch, that
the world market prices for primary commodities had seen a steady drop during the whole of
the twentieth century, resulting in a deteriorating terms of trade for the periphery.48 This
46
Baker Fox (1967), pp. 183
47
Later renamed the Economic Commission for Latin America and the Carribean (ECLAC).
48
Blomström, Magnus & Hettne, Björn (1981), Beroende och underutveckling – Den latinamerikanska
beroendeskolans bidrag till utvecklingsteorin. Stockholm, pp. 56-58. The reference used by Blomström & Hettne
is Prebisch, Raùl (1950), The economic development of Latin America and its principal problems. New York:
United Nations.
19
conclusion was simultaneously drawn by the development economist Hans Singer49, hence
this finding is traditionally labelled the Prebisch-Singer thesis.50
The solution for this precarious problem was, according to Prebisch and ECLA, a
transition within the dependent economies favouring import substitution, with barriers being
erected towards foreign capital, and domestic industry receiving large subsidies. In The
structure of dependence Theotonio Dos Santos criticized ECLA’s analysis, arguing that this
remedy would not work in the long-run, due to the heavy constraints imposed by the structure
of dependency upon the workings of the domestic market. In order to industrialize, the
dependent economies would still be forced to import the necessary technological prerequisites
and would thus have to maintain a strong export sector in order to attain the foreign currency
needed for its imports. The “structure of dependence” was thus not something which the
dependent countries could escape from in such an easy manner but was rather an ever-present
reality, something which a hypothetical restructuring of the dependent economies had to
reflect.51
Dos Santos thus regarded dependency as a more or less inescapable problem, which is
reflected in his concluding remarks in The structure of dependence
“Everything now indicates that what can now be expected is a long process of sharp political and military
confrontations and of profound social radicalization which will lead these countries to a dilemma: governments
of force which open the way to fascism, or popular revolutionary govern-ments, which open the way to
socialism. Intermadi-ate solutions have proved to be, in such a contra-dictory reality, empty and utopian.”52
49
Singer, Hans (1950), The distribution of gains between investing and borrowing countries. American
Economic Review Vol.40 No.2, pp. 473-485
50
Blomström & Hettne (1981), p. 57
51
Dos Santos (1970), pp. 221-236
52
Dos Santos (1970), p. 236
20
Economic historian and sociologist André Gunder Frank shared much of Theotonio Dos
Santos pessimism, though he postulated that there at times – due to economic depression or
other forms of crises – appeared windows of opportunity, during which change could
perceivably be accomplished. Frank was the first of the dependency theorists which came to
be widely read outside the theory’s traditional domain of Latin America. He was also the first
of the Dependentistas who, in a structured manner, established a coherent framework for the
theory, including testable hypotheses.53
Frank introduced the concept of metropolitan and satellite nations – which had much in
common with the before-mentioned core-periphery – which could be divided into several subcategories of dependent relationships; meaning for instance, that a section of society could at
the same time function as both a metropolis and a satellite in relation to other sections in
society or towards other countries. The international metropolis however, would never
function as a satellite, Frank continued, but would always reap the benefits of the structural
characteristics of the world economy.54 In Franks own words “the now developed countries
were never underdeveloped, though they may have been undeveloped”55.
Sociologist Fernando Henrique Cardoso later criticized Frank for failing to see the
complexity of the various forms of dependency which could be seen throughout history.
Cardoso emphasized the “movement” of dependent relationships between differing social
classes and countries, and remained very critical of Frank’s assertion that dependency and
development were necessarily opposed to each other, as well as the notion of “metropolis”
and “satellites” as static dichotomies.56
53
Blomström & Hettne (1981), pp. 108-113
54
Frank, Andre Gunder (1966), The development of underdevelopment in Monthly Review No. 6, 1989 (reprint),
available [online]: http://findarticles.com/p/articles/mi_m1132/is_n2_v41/ai_7659725
55
56
Frank (1966), p. 1
Cardoso, Fernando Henrique (1977), The consumption of dependency theory in the United States. Latin
American Research Review Vol. 12 No. 3, pp. 7-24
21
Dependency theory has subsequently been discredited by some researchers due to the
rapid economic development of the so called “East Asian tigers”, i.e. Taiwan, Singapore,
Hong Kong and South Korea.57 Others have lamented the lack of universally accepted
definitions of the various forms of dependency being discussed, as well as hypotheses and
theses which can be empirically tested,58 while still others have reported a positive or neutral
correlation between different measures of dependency and economic growth.59
57
Gunnarsson, Christer & Rojas, Mauricio (2004), Tillväxt stagnation kaos – En institutionell studie av
underutvecklingens orsaker och utvecklingens möjligheter. Kristianstad, pp. 76-88
58
Kaufman, Robert R., Chernotsky, Harry I., Geller, Daniel S. (1975), A preliminary test of the theory of
dependency. Comparative Politics Vol. 7 No. 3, pp. 303-330, Chilcote, Ronald H. (1978), A question of
dependency. Latin American Research Review Vol. 13 No. 2, pp. 55-68, Kleemeier, Lizz L. (1978), Empirical
tests of dependency theory: A second critique of methodology. The Journal of Modern African Studies Vol. 16
No. 4, pp. 701-704
59
Ray Lee, James & Webster, Thomas (1978), Dependency and economic growth in Latin America.
International Studies Quarterly Vol. 22 No. 3, pp. 409-434, Ray, David (1973), The dependency model of Latin
American underdevelopment: Three basic fallacies. Journal of Interamerican Studies and World Affairs Vol. 15
No. 1, pp. 4-20
22
2. Historical background of U.S. – Central American relations
In this section of the essay I will give a broad historical background to the development of the
Central American economies (2.1), as well as a characterization of the main lines in U.S.
foreign policy towards the Central American region during the nineteenth and twentieth
centuries (2.2). These sections are included in order to establish the applicability of
Hirschman’s theory of trade dependency on the U.S. – Central American case. As the reader
might recall, this applicability depended upon three prerequisites presented in section 1.2.
These prerequisites were that we should have 1) a group of small and economically backward
countries, which are engaged in trading activity with 2) a large and economically powerful
nation, which 3) has a strategic interest in dominating or controlling these small countries.
2.1 An overview of the economic history of Central America
The year 1821 marked the end of Spanish colonial rule over Central America. After a shortlived Mexican occupation between 1821 to 1823, the region gained its independence and
emerged as one united country, the Central American Federation. The fifteen year duration of
the CAF was to constitute the calm before a 50 year storm of political turbulence, as the five
Central American republics – Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua –
declared autonomy from the Federation.60
The period which followed the struggle for independence – 1870 to 1920 – was one of
more or less unhindered economic growth. During this formative period of the regions history
the foundation was laid for the Central American economies future production-patterns; a
production that was to revolve around two major export crops, bananas and coffee, for which
60
Bulmer – Thomas (1987), p. 338
23
the Central American climate had proven ideal. Prior to 1870 Central American exports to
Europe and the eastern parts of the United States, was loaded onto ships on the pacific
seaboard and then transported along the western coast of Latin America, passing Cape Horn
before it could reach the Atlantic ocean. During the 1870’s and 1880’s ports were established
along the Atlantic coast of Central America. Along with an improved infrastructure in the
form of roads and railroads, these projects contributed considerably to the reduction of
transportation costs for Central American exports. Exports consequently increased manifold
during the period, satisfying a rising demand of coffee and bananas in the United States and
Europe.61
The relative importance of these two crops compared to the remainder of Central
American production for exports can be clearly seen in table 2.1 below. The share of the
banana- and coffee industries in the exports of Costa Rica, El Salvador and Guatemala ranged
from somewhere between 80- and 90 per cent. The only country among the five which could
be said to have been somewhat less dependent upon these two crops, was Honduras. Still,
according to the table, Honduras owed more than half of its export earnings to the sales of
coffee and bananas, with the sales of precious metals – a practice that had been initiated by
the Spanish colonial power, and had long ago seized to be a dynamic part of the Honduran
economy - taking a distant third place, accounting for about a quarter of Honduran exports.
The table also shows that for the region as a whole, “[c]offee was king”62, accounting for
close to 65 per cent of the regions exports. The corresponding share for bananas was around
20 per cent (while contributing to approximately half of the export earnings of Costa Rica and
Honduras).
61
Bulmer – Thomas (1987), pp. 1-8
62
Bulmer – Thomas (1987), p. 3
24
Table 2.1 Central American exports in the year 1913, in million US dollars. Current prices.
Commodity
Costa Rica El Salvador Guatemala Honduras Nicaragua
Coffee
3,6
7,5
12,3
0,1
5,0
Bananas
5,2
…
0,8
1,7
0,5
Precious metals
1,0
1,5
…
0,9
1,1
Hides
0,1
0,1
0,5
0,2
0,3
Timber
0,1
…
0,3
0,0
0,3
Rubber
0,0
0,0
0,1
0,0
0,3
Other commodities
0,1
0,2
0,5
0,5
0,4
Total
10,3
9,4
14,4
3,4
7,7
79,6%
90,5%
53,5%
70,5%
Bananas and coffee 85,2%
as % of total
Source: “Central America: exports by value, 1913, in US dollars”, Bulmer – Thomas (1987),
p. 8
The monumental importance of the banana- and coffee industries for the Central
American economies, would in itself prove to be a major obstacle in the way of any further
diversification of agricultural production. The vested interests of banana- and coffee growers
in the political and financial institutions of the region, had grown so strong that the prospects
of acquiring political support or capital for any venture outside of these industries looked dire,
to say the least. This, in association with the fact that the banana- and coffee industries had a
highly underpaid workforce – relying on various forms of (government-supported) coercion,
rather than wage rates to ensure an adequate supply of labour – led to an underdeveloped
home market for its agricultural produce. The Central American countries thus evolved into
25
archetypical underdeveloped economies, with GDP mainly consisting of agricultural
production for exports, concentrated on two major crops.63
Moving up to the time of the Second World War, the Central American mode of
production was more or less unchanged. There had been some attempts at production
diversification in the 1920’s; sugar was for instance becoming much more important for the
five nations exports, as well as timber (in the case of Nicaragua) and cacao (Costa Rica). But
these changes in the Central American production pattern was hastily undone as a result of the
1930’s depression, which hit the Central American economies hard.64
So at the time when hostilities had commenced in Europe, the Central American
economies were perhaps more dependent than ever on the export of their two commodities of
choice, coffee and bananas. Therefore, European war-time rationing became a serious
blowback for the region, coffee and bananas being considered as non-essentials in the eyes of
the Allies.65
With the European markets effectively out of reach, the five Central American countries
turned to the United States which was the sole major market remaining for their exports. The
U.S. was already prior to the war the largest single trading partner of Central America, but
with the elimination of European – above all English and German – competition, the United
States, by the time WWII had been won, had a virtual monopoly on Central American trade.66
The development of Central Americas trade during the war-years with the U.S. on the one
hand, and the UK and Germany on the other, is shown in table 1.2 below. The total
dominance by 1945 of the U.S. as a market for Central Americas produce is evident in the
figures, the U.S. absorbing between 83- to 90 per cent of the five Central American countries
export in that year. The German market, which in 1939 received about a quarter of Costa
63
Bulmer – Thomas (1987), pp. 9-12
64
Bulmer – Thomas (1987), pp. 74-79
65
Bulmer – Thomas (1987), pp. 87-91
66
Bulmer – Thomas (1987), pp. 91-95
26
Rica’s exports – as well as approximately one tenth of that of El Salvador, Guatemala and
Nicaragua – was non-existent by the end of the war. The UK market – though not particularly
important for any of the five except for Costa Rica – had followed a similar path, and hence
sported an all but vanished demand for Central American commodities in 1945.
Table 1.2 Central American exports 1939, 1940 & 1945, percentage share of principal
trading partners
Costa Rica El Salvador Guatemala Honduras Nicaragua
1939 a)USA
45,6
59,9
70,7
90,7
77,5
b) UK
16,9
0,2
0,4
1,8
1,3
c) Germany 25,0
9,0
11,5
1,9
10,9
58,8
75,2
91,0
95,6
94,2
25,1
0,2
1,3
0,1
0,4
-
-
0,5
-
84,4
84,6
90,7
83,2
90,0
b) UK
-
0,4
0,5
-
0,9
c) Germany
-
-
-
-
-
1940 a) USA
b) UK
c) Germany 1945 a) USA
Source: “Central America: external trade shares (%) by main countries, 1939, 1940 and
1945”, Bulmer – Thomas (1987), p. 92
27
2.2 U.S. foreign policy towards Central America
Despite its geographically small proportions, Central America has received more attention
from US planners than the remaining countries of the western hemisphere combined. When
people speak of US military intervention in Latin America, what they usually refer to is the
landing of troops in one of the Central American countries.67
The founding fathers of the United States, including Thomas Jefferson and Alexander
Hamilton, were convinced that the new republic was destined to spread to the south of
modern day Texas, into Mexico and Central America. In the early nineteenth century the state
of Louisiana was gained from the Spanish, which was considered to be the first step of a
“piece by piece” acquisition of the southern territories of the hemisphere. A necessary
prerequisite for this “piece by piece”-policy was the creation of political stability in the
region. The 1770’s revolutionaries thus became strongly anti-revolutionary in their policy
toward Central America.68
However, if revolutions did occur in the region at least they would be American
revolutions, reasoned Jefferson, who was to frequently point out to the British that “America
has a hemisphere to itself”69 An idea that can be said to constitute the central ideas of the
Monroe doctrine, that talked about eliminating European presence in America, leaving the
United States the sole great power in the hemisphere.70
The doctrine, according to James Monroe himself, was to serve
67
LaFeber, Walter (1983), Inevitable revolutions – The United States in Central America. New York, pp. 5-8
68
LaFeber (1983), pp. 19-22
69
Jefferson qouted in LaFeber (1983), p. 22
70
LaFeber (1983), pp. 22-23, 28-29
28
“[A]s a principle in which the rights and interests of the United States are in-volved, that the American
continents, by the free and in-dependent condition which they have assumed and main-tained, are henceforth not
71
to be considered as subjects for future colonization by any European powers.”
The doctrine was primarily a policy of non-intervention between the United States and
Europe, stating that the U.S. would refrain from interfering in the internal affairs of the
European nations, as long as there were to be no European involvement in the western
hemisphere, leaving the U.S. unchallenged as the new worlds leader.72
During the last decades of the nineteenth century the United States economy grew at an
exceptionally high rate. By the early 1890’s the U.S. had become the worlds leading industrial
society. In 1870 the United States had a population of around 40 million, a number that by the
start of the first World War had climbed to over 100 million. Per capita growth of GDP more
than doubled during this same period.73
With its newfound economic strength the United States for the first time had the power to
make the aspirations of the Monroe doctrine a reality. The President of the United States
during these first years of the twentieth century was Theodore “Teddy” Roosevelt, who firmly
believed in the idea of the U.S. as a “natural protector” of a Central American populace whom
were simply incapable of managing their own affairs.74 This perceived responsibility grew in
strength from 1903 onwards, with the U.S. run building of the Panama canal.75 As Elihu Root,
secretary of state 1905-1909, put it
71
Knopf (1965), p. 4
72
Knopf (1965), pp. 6-8
73
Cameron (2005), pp. 281-285
74
“All that this country desires is that the other republics on this continent shall be happy and prosperous; and
they cannot be happy and prosperous unless they maintain order within their boundaries and behave with a just
regard for their obligations toward outsiders” Theodore Roosevelt quoted in LaFeber (1983), p. 37
75
LaFeber (1983), pp. 34-37
29
“The inevitable effect of our building the canal must be to require us to police the surrounding premises. In
the nature of things, trade and control, and the obligation to keep order which go with them, must come our
way.”76
The first real mission for the “natural protector” in Central America came in 1906. A
major conflict had broken out between Guatemala’s U.S. friendly dictator Manuel Estrada
Cabrera, and Nicaragua’s José Santos Zelaya, which rapidly escalated into a full scaled arm
conflict involving all of the five countries. With the assistance of Mexican dictator Porfirio
Días, the U.S. sent its naval forces to the region, demanding a cease-fire, followed by a U.S.
held peace conference in Washington D.C. The threat from the U.S. navy succeeded in
bringing about a cessation of hostilities, and in the following conference a Central American
Court of Justice was established, through which all further disputes in the area would be
managed. Of course, the court was consistently disregarded by U.S. government officials
when it made the “wrong” decisions, i.e. decisions not consistent with U.S. strategic interests.
The CACJ was therefore a short-lived experiment, leaving the United States itself to settle
future regional conflicts in accordance with its status as “natural protector”.77
After the end of WWII the United States of America was, without competition, the single
most economically powerful nation of the world. Europe lay in ruins, and the productive
capacity of former economic superpowers like Germany and Great Britain were now wholly
dependent upon a steady stream of U.S. aid. U.S. planners had already during the war laid the
groundwork for a new global system – built around the new United Nations organization – in
which the U.S. itself would claim a leading role. Exempt from this new system however, was
Central America, which was to remain the sole responsibility of the United States.78
76
Elihu Root qouted in LaFeber (1983), p. 37
77
LaFeber (1983), pp. 39-41
78
LaFeber (1983), pp. 85-89
30
2.2.1 U.S. military intervention and subversion in Central America
The commonly held perception amongst U.S. planners of Central America as their “own
backyard”, has perhaps found its most vivid illustration in the numerous military interventions
and general subversive activity throughout the region by a long line of U.S. governments.
The driving force behind this occasionally overt, but generally covert involvement in the
internal affairs of the region has long been understood, and was first outlined by American
president Calvin Coolidge in the 1920’s, when he declared that U.S. citizens and their
property were to be considered as
“a part of the general domain of the nation, even when abroad… There is a distinct and binding obligation on the
part of self-respecting government to afford protection to the persons and property of their citizens, wherever
they may be”79
A few years after President Coolidge’s announcement to United Press – from which the
above quotation is taken – of the sanctimony of U.S. property, civil war broke out in
Honduras due to allegations of electoral fraud. The war threatened “the property of foreign
fruit companies80 and American-owned homes and shops”.81 The U.S. Navy was quickly
dispatched to Honduras in order to restore the internal stability that was essential for U.S.
interests in the country.82 This line of action followed a long tradition of U.S. policy towards
the Central American area. Thus for example, in the late nineteenth century, before the
annexation of Panama from Colombia had taken place, U.S. military personnel carried out
79
80
LaFeber (1983), p. 59
Among which U.S.-owned United Fruit Company, Cuyamel Fruit Company and Vaccaro Brothers Fruit
Company were the largest and most influential in the Honduran economy
81
Leonard, Thomas M. (1991), Central America and the United States: The search for stability. Athens,
Georgia, p. 84
82
Leonard (1991), pp. 83-86
31
operations in Panama at no less than six different occasions.83 Similarly, political turbulence
in the beginning of the 1910’s led to a twenty year U.S. occupation of Nicaragua, between
1911 and 1933.84
During the early post-war period, the most flagrant example of this “big stick-policy”85
was probably the overthrowing of democratically elected Guatemalan President Jacobo
Arbenz. When Arbenz came to power in 1950, the U.S.-based United Fruit Company owned a
substantial part of Guatemalan land, close to 550,000 acres. This vast holding had been
acquired during the prior regime of Jorge Ubico, and the beneficial prices UFCO was given
had enabled the company to purchase substantially more land than was needed for its
production. This was done mainly in order to avoid competition. Moreover, UFCO had been
allowed to undervalue its holdings in order to avoid Guatemalan taxes. Arbenz had won the
presidential election on a more or less socialist platform, and thus implemented an agrarian
reform soon after taking office. UFCO was affected by these reforms through an
expropriation of two thirds of its land, essentially the part of its holdings that was not being
put to use. Arbenz offered to compensate UFCO by paying the company a sum of $1,185,000,
equivalent to the undervaluation that had been made by UFCO for tax reasons.86
This solution was deemed unacceptable by UFCO, which appealed for assistance to the
U.S. State Department. The State Department declared to Arbenz that it expected a more fair
settlement to be reached by the two parties, but was greeted by deaf ears. The response from
the United States government was to be swift, and came in the form of a CIA-planned military
83
LaFeber (1983), p. 32
84
LaFeber (1983), pp. 46-49
85
The phrase originates from President Theodore Roosevelt
86
Leonard (1991), pp. 133-136
32
invasion. Jacobo Arbenz was overthrown on 27 June 1954, and was succeeded by the
installation of U.S. friendly Castillo Armas.87
We can thus conclude that the prerequisites mentioned in section 1.2 for a power-policy
through trade to be established between the United States and Central America was present.
We have here an overwhelmingly powerful nation with an apparent strategic interest in
controlling the development of an economically underdeveloped region of the world, giving
us 1) the strong, 2) the weak and 3) the motive. The question is now whether it can be shown
that the United States of America conducted such a power-policy in its trade relations with
Central America during the period of 1948-1968. This question is addressed in the following
sections of the essay.
87
Leonard (1991), pp. 137-142
33
3. U.S. – Central American trade relations during the post-war period
In his book National power and the structure of foreign trade Albert O. Hirschman made
three statistical examinations in order to test some of the quantitative predictions of his theory
of trade dependence. In this paper I will repeat one of these examinations, applying
Hirschman’s own statistical methodology on the U.S. – Central American case.88 This is done
in section 3.1 of this paper.
In section 3.2 I will take a closer look at the development of the Central American
countries terms of trade, in order to see if the general conditions for these countries external
trade can be said to have been affected by the level of trade concentration, as would be
expected provided that Hirschman’s theory is valid.
3.1 Central American trade concentration 1948-1968
In this section I will try to measure the concentration of the Central American countries trade
upon the United States of America. This is done by employing Hirschman’s index of trade
concentration, which was presented and discussed in section 1.2. What will be measured with
the use of this index, is what Hirschman called the monopoly power of the United States of
88
Hirschman’s second examination looked at the trading pattern for several large trading economies, in order to
investigate whether these countries had been redirecting their trade towards smaller trading partners. To include
a similar examination would, however, have rendered this essay much too large; nor is an examination of the
general trade policies of the stronger party (in this case the United States) essential for testing the potency of
Hirschman’s theory on the specific case with which this essay deals. Hence it has been excluded. Hirschman’s
third examination is not relevant for the purpose of this paper. It involves measurements of the composition of
world trade, and is included in Hirschman’s book in an attempt to discredit certain theories which, if true, would
have rendered Hirschman’s theory of trade dependence more or less useless. His findings can be quickly
summarized as follows: The exchange of manufactured commodities for raw materials and foodstuffs constitute
only a minor part of total world trade. The overwhelming majority of all trade consists instead of the exchange of
raw materials and foodstuffs for other raw material and foodstuffs. Hirschman (1980), pp. 117-151
34
America upon each of the five Central American countries trade. The degree of this monopoly
power, according to Hirschman’s theory, can be grossly interpreted as the degree of U.S.
leverage upon Central American trade.
In section 2.1 of this paper we saw that the Central American countries experienced a
substantial loss of markets as a result of the outbreak of WWII. Central American trade with
Europe all but seized, leaving the region with the United States of America as its sole major
trading partner. This fact should show in the examination of the five countries concentration
of trade, in the form of a strong U.S. monopoly power over Central American trade in the
beginning of the examined period, i.e. a highly concentrated Central American trade with a
clear preference toward the U.S.
As has been shown in sections 2.1 and 2.2 of this paper, the three basic prerequisites – as
defined by Hirschman - for a usurious trading relationship to develop were present in the U.S.
– Central American case. There was 1) a large and economically powerful nation, which
traded with 2) five small and economically underdeveloped countries, whom the large and
powerful nation 3) had a strong interest in controlling.
If Hirschman’s theory holds up, we should thus expect to find consistently large or
increasingly large levels of trade concentration for all of the five countries.89
In table 3.1 below the Central American countries trade concentration during the period of
1948 to 1968 is shown. As we expected the level of concentration is remarkably high in the
beginning of the period for all five countries, reflecting the strong position of the United
States of America in Central American trade. However, the high index values decreases
consistently during the examined period, which is contrary to what we would expect if
Hirschman’s theory of trade dependency was valid. During the twenty year period examined,
the Central American countries concentration of trade drops to about half its original level in
89
Hirschman (1980), pp. 98-99
35
the case of Costa Rica, El Salvador and Nicaragua. Honduras and Guatemala’s trade
concentration also decrease considerably, to approximately 60-65% of the 1948-level.
Table 3.1 Central American trade concentration 1948-1968
Year: 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968
Costa
I90
78,0
N/A
64,3
60,5
56,2
53,3
49,6
50,3
48,9
42,7
41,7
Rica
E91
78,9
N/A
73,3
63,0
59,3
57,4
57,9
62,8
56,7
47,8
49,0
El
I
73,9
N/A
63,6
60,1
54,6
50,7
46,0
40,9
41,9
38,2
36,6
Salvador
E
77,8
N/A
83,8
73,1
54,7
52,7
50,3
47,4
43,1
40,8
35,6
Guatemala I
76,6
N/A
64,1
65,6
68,1
60,9
51,7
50,4
47,8
45,7
45,3
E
89,0
N/A
83,6
71,9
72,7
42,8
47,0
53,9
40,1
38,0
36,9
I
79,2
79,3
74,1
69,3
68,4
61,2
57,5
53,6
51,0
52,0
49,2
E
74,3
71,1
72,1
77,9
65,9
63,9
59,2
62,2
56,6
58,7
50,3
I
84,0
N/A
71,9
66,1
63,9
56,7
54,5
52,6
49,5
48,1
42,1
E
74,9
N/A
55,4
50,6
53,8
42,8
47,0
47,7
41,3
41,6
41,8
Honduras
Nicaragua
Source: “Trade by principal countries of provinence and destination” for Costa Rica, El
Salvador, Guatemala, Honduras and Nicaragua, YITS 1951-1971.
In National power and the structure of foreign trade Hirschman explained that the relative
strength of one countries monopoly power over another country, depended on two factors, the
monopoly being stronger:
1) the greater the percentage held by the monopolist country in the trade of country X,
90
Imports
91
Exports
36
2) the smaller the concentration of the remaining part of X’s trade, i.e., the less the
monopoly country is confronted by other countries hold-ing smaller but still important
shares of the trade of country X.”92
In table 3.2 below we can see the share held – in percentages – by the U.S. of the total
quantum of Central American trade during the examined period of 1948 to 1968. As the
figures show, the U.S. share of this trade was decreasing consistently throughout the period,
indicating a diminishing U.S. monopoly power on Central American trade.
Table 3.2 Percentage of total trade for Central American countries conducted with U.S.
Year: 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968
Costa
I
77,7
N/A
63,3
58,8
54,5
51,1
46,8
46,5
46,3
39,1
37,9
Rica
E
78,6
N/A
72,4
59,6
50,6
49,7
52,1
58,5
53,1
44,5
46,8
El
I
73,4
N/A
62,6
59,0
52,7
48,4
42,9
36,4
37,1
32,7
29,0
Salvador
E
77,4
N/A
83,6
72,1
44,5
39,7
35,1
33,8
25,5
25,1
19,5
Guatemala I
76,2
N/A
62,9
64,5
67,3
59,3
49,0
48,0
44,5
41,9
40,9
E
88,9
N/A
83,3
70,8
71,5
33,1
40,4
48,9
32,6
31,1
27,9
I
78,7
78,9
73,6
68,6
67,6
59,7
55,9
51,7
48,8
49,8
45,9
E
72,9
69,3
70,8
77,3
64,1
62,7
57,4
60,3
53,7
55,8
45,1
I
83,8
N/A
71,3
65,0
62,8
54,9
52,7
50,8
47,3
45,7
38,0
E
74,5
N/A
52,8
45,5
43,2
33,1
40,4
38,8
27,2
22,0
28,3
Honduras
Nicaragua
Source: “Trade by principal countries of provinence and destination” for Costa Rica, El
Salvador, Guatemala, Honduras and Nicaragua, YITS 1951-1971.
92
Hirschman (1980), p. 99
37
In table 3.3 below, the Central American countries trade concentration is displayed once
more. This time however, U.S. trade has been excluded in the calculations. This should give a
general idea as to the concentration of Central America’s non-U.S. trade during the period.
The table shows that this concentration was increasing between the years of 1948 to 1968,
further contributing to the demise of U.S. monopoly power on Central American trade.
Table 3.3 Central American trade concentration 1948-1968, excluding U.S.
Year: 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968
Costa
I
6,6
N/A
11,5
14,1
13,7
15,3
16,5
19,1
15,7
17,1
17,4
Rica
E
6,7
N/A
11,4
20,3
30,8
28,6
25,3
22,9
20,0
17,5
14,6
El
I
8,0
N/A
11,0
11,4
14,2
15,0
16,6
18,6
19,5
19,7
22,4
Salvador
E
7,9
N/A
6,0
12,0
31,9
34,7
36,0
33,2
34,8
32,2
29,8
Guatemala I
7,7
N/A
12,2
11,8
10,3
13,8
16,4
15,4
17,4
18,2
19,4
E
4,6
N/A
6,9
12,8
12,9
27,1
23,9
22,6
23,3
21,9
23,2
I
9,0
7,5
8,3
10,1
10,5
13,3
13,7
14,1
14,8
15,1
17,6
E
14,2
15,7
13,7
9,4
15,3
12,2
14,4
15,3
18,0
18,3
22,3
I
5,7
N/A
9,0
12,1
12,0
14,2
14,1
13,8
14,5
14,9
18,1
E
7,9
N/A
16,8
22,2
32,1
27,1
24,0
27,8
30,6
35,3
30,8
Honduras
Nicaragua
Source: “Trade by principal countries of provinence and destination” for Costa Rica, El
Salvador, Guatemala, Honduras and Nicaragua, YITS 1951-1971.
38
3.2 Central America’s terms of trade 1948-1968
As was shown in the previous chapter, the relative dependence of the Central American
countries on its trade with the United States, declined sharply during the examined period.
This is clearly contrary to what we would expect to find if Hirschman’s theory of trade
dependence was valid. However, we must also account for the fact that the index series starts
out with figures indicating very high levels of concentration for all the Central American
countries. Moreover, the countries trade seems to have been concentrated towards the U.S.,
which would lend some support to Hirschman’s theory.
The highly concentrated Central American trade in the year of 1948, in concert with the
apparent preference of this trade towards the U.S., would - if we follow the logic of
Hirschman’s theory of trade dependence – have given the United States a position on Central
American trade similar to that of a monopolist. As was explained in section 1.3 a country with
this kind of a monopoly position could then use its coercive power to obtain more favourable
conditions for its foreign trade with the dependent countries, resulting in a deteriorating terms
of trade for these countries (in this case Central America)93
If Hirschman’s theory is valid, we should thus expect the Central American countries
terms of trade to undergo some degree of improvement during the period of 1948-1968
(represented by square number 10 in the possibility matrix of section 1.3 ). We would expect
this due to the fact that the forces under which the Central American countries could be
expected to have been forced into a system of highly unfavourable terms of trade were
steadily diminishing during this period.94 In other words, as the monopoly power held by the
United States of America over the Central American countries declined, and these countries
93
Hirschman (1980), pp. 26-33
94
One could argue that this interpretation of the development of the Central American countries trade
concentration, does not adequately take into account the distinction between high and low values of Hirschman’s
39
started to develop new trade relations amongst themselves and with the countries of Europe,
the overall situation for Central American foreign trade should have been improving.
In table 3.5 below we can see the development of the Central American countries terms of
trade during the period of 1948 to 1968. The most striking observation that can be made from
this table is of course the highly favourable development of the terms of trade during the first
four to six years of the series. During the period of 1948 to 1954 the terms of trade increased
by around 100 per cent for the countries of Costa Rica, El Salvador and Nicaragua.
Guatemala’s terms of trade had by that time increased by approximately 70 per cent, while
Honduras development was somewhat less dramatic. All in all, these observations strongly
support Hirschman’s theory of trade dependency, showing a strongly inverse correlation
between trade concentration and terms of trade development.
index. The definition of high vs. low index values was made in section 1.2 of this essay, and states that values
above 40 ought to be considered as high, whereas values below this level ought to be considered as low. As is
evident in table 3.1 the index values for the Central American countries in very few cases dropped below 40,
despite the large relative decline of the concentration values throughout the period. Should the development of
the Central American countries trade concentration thus perhaps be characterized as consistently high, rather
than diminishing? In my view, such a characterization would say more about the crude definitions provided by
Hirschman’s theoretical framework, than it would about the actual development, which after all did show a 50
per cent reduction of the concentration of trade for several of the examined countries. Furthermore, such a
characterization would not in any profound way, change the results of this second part of the examination, which
will soon be evident.
40
Table 3.5 The Central American countries terms of trade 1948-1968, 1948 = 100
Year:
1948 1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
Costa
100
154,9 144,4 192,3 183,9 150,1 132,1 126,9 144,4 138,8 124,9
100
157,8 177,9 230,5 226,7 167,4 126,4 127,7 123,6 137,0 131,9
Guatemala 100
145,4 146,2 169,1 164,4 147,6 125,4 112,6 108,8 101,4 101,8
Honduras
100
119,9 112,2 135,6 131,9 112,2 95,7
Nicaragua
100
136,0 177,0 204,9 144,3 117,9 110,0 114,0 107,7 114,4 116,0
Rica
El
Salvador
113,8 121,4 112,6 122,0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Costa Rica, El Salvador,
Guatemala, Honduras and Nicaragua, Bulmer – Thomas (1987), pp. 334-335
However, after 1954 the figures for the terms of trade starts falling for all of the examined
countries. By 1968 the percentage increase of the terms of trade has dropped to a level
ranging between only 2 and 30 per cent, giving a reversed U-shape to the graphical
description of the development, which is shown in figures 3.1 through 3.5.
41
Figure 3.1 Costa Rica’s terms of trade 1948 – 1968 (1948 = 100)
Terms of trade
250
200
150
Terms of trade
100
50
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Costa Rica, Bulmer –
Thomas (1987), pp. 334-335
Figure 3.2 El Salvador’s terms of trade 1948 – 1968 (1948 = 100)
Terms of trade
250
200
150
Terms of trade
100
50
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for El Salvador, Bulmer –
Thomas (1987), pp. 334-335
42
Figure 3.3 Guatemala’s terms of trade 1948 -.1968 (1948 = 100)
Terms of trade
180
160
140
120
100
Terms of trade
80
60
40
20
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Guatemala, Bulmer –
Thomas (1987), pp. 334-335
Figure 3.4 Honduras’ terms of trade 1948 – 1968 (1948 = 100)
Terms of trade
160
140
120
100
Terms of trade
80
60
40
20
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Honduras, Bulmer – Thomas
(1987), pp. 334-335
43
Figure 3.5 Nicaragua’s terms of trade 1948 – 1968 (1948 = 100)
Terms of trade
250
200
150
Terms of trade
100
50
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Nicaragua, Bulmer –
Thomas (1987), pp. 334-335
In figure 3.6 below the average development of Central America’s terms of trade during the
period, is compared with the development of the average concentration of Central American
imports and exports. The lack of an inverse correlation during the larger part of the examined
period is made even more clear in this graphical description of the development. The
concentration of imports and exports is steadily declining, at the same time as the terms of
trade curve is highly volatile in both directions. This finding should cast serious doubts on
Hirschman’s contention that concentration of trade has a negative influence upon terms of
trade development.
44
Figure 3.6 Development of average Central American terms of trade, average Central
American concentration of imports and average Central American concentration of exports,
(1948=100)
200
180
160
140
120
Terms of trade
100
Imports
80
Exports
60
40
20
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
0
Source: “Net barter terms of trade, 1920-1984 (1970 = 100)” for Costa Rica, El Salvador,
Guatemala, Honduras and Nicaragua, Bulmer – Thomas (1987), pp. 334-335, “Trade by
principal countries of provinence and destination” for Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua, YITS 1951-1971.
45
4. Summary & concluding remarks
4.1 Summary
In this essay Albert O. Hirschman’s theory of trade dependency – which was first presented
by Hirschman in his 1945 publication National power and the structure of foreign trade – was
re-examined, using the same statistical techniques that Hirschman used in his original study.
The original study focused on Nazi-Germanys trade policy towards Eastern Europe during the
inter-war years, and reached the conclusion that Germany had conducted a power-policy visà-vis its trading partners, achieving a monopoly on their trade which it then used in order to
establish more beneficial terms for its foreign trade.
This paper instead focused on the trade relations between the United States of America
and the five Central American countries – Costa Rica, El Salvador, Guatemala, Honduras and
Nicaragua – during the twenty-year period of 1948 to 1968. Through an analysis of
Hirschman’s theoretical framework it was shown that the U.S. – Central American case
should be an ideal case with which to test Hirschman’s predictions. In the research section it
was found that the Central American countries trade was heavily concentrated on the United
States in the beginning of the examined period. However, this concentration diminished
steadily during the entire period, which is contrary to what we would have expected if
Hirschman’s theory of trade concentration were to be valid. This first examination showed
that although the United States of America enjoyed a position as unrivalled economic
superpower following WWII, it simply was not able to hold on to the monopoly of Central
American trade which it had held during the war-years. This finding should cast serious
46
doubts on A. O. Hirschman’s contention, that the “structural characteristics of international
economic relations… make the pursuit of power a relatively easy task”.95
The declining trend in Central American trade concentration was then compared to the
development of the five countries terms of trade during the same period. Hirschman’s theory
predicted these two factors to be inversely correlated, which held up for the first six years of
the examined period. During the following twelve-year period, however, no such correlation
could be found, which is a clear indication that trade concentration does not necessarily have
a negative impact on terms of trade development.
4.2 Concluding remarks
The re-examination of A. O. Hirschman’s theory of trade dependency which has been
conducted in this essay, by applying it to the U.S. – Central American case, lends no support
to the validity of that theory. Whatever merit Hirschman’s theory can be said to have had in
explaining German external trading behaviour during the interwar period, it seems to have no
bearing whatsoever when it is applied to the U.S. – Central American case; nor does it seem
to be within this theory’s predictive ability to shed any light on the evolution of Central
American trading conditions following WWII, as is shown by the absence of co-variation
between Central American trading concentration and the development of its terms of trade.
Perhaps the apparent fit between Hirschman’s theoretical framework and the empirical case
examined in National power and the structure of foreign trade, is specific for that particular
case and does not necessarily generalize.
A better explanation for the appearance of the Central American countries terms of trade
curves, might instead be that they are simply following the development of world market
95
Hirschman (1980), p. vi
47
prices for the principal Central American commodities during the examined period. Indeed,
Bulmer – Thomas points out in his extensive work The political economy of Central America
since 1920 that the prices Central American producers received for their two most important
crops – bananas and coffee – soared to unprecedented levels mainly on the wings of post-war
recovery. Bananas and coffee had during the war been considered as a “non-essentials” by the
Allies, which did considerable harm to the Central American economy. But during the first
decade of the post-war era, demand for these luxuries started building up amongst the
populations of Central America’s traditional trading partners and beyond.96
This is the same conclusion which the Economic Commission for Latin America – a UN
based organisation - drew at the time, when analysing Central America’s post-war boom in
export earnings. The boom, ECLA concluded, was the result of more favourable world market
prices, above all for coffee. A factor that was further accentuated by Brazilian coffee-farmers
lowered output - as a result of frost on the plantations – in concert with excellent harvests of
coffee beans in Central America.97
This conclusion is also well in line with a newly published report on terms of trade
volatility titled Winners and losers in the commodity lottery. The report, written by Blattman,
Hwang and Williamson, discusses how terms of trade volatility might affect long-term
economic growth. Latin America is pointed out in the report as being one of the worlds
regions with the highest historic levels of terms of trade volatility. This is above all else due to
a traditional production pattern which has focused on one or a few agricultural products for
exports. Coffee is also singled out in the report as one of the primary commodities which has
96
Bulmer – Thomas (1987), pp. 105-110
97
Economic Commission for Latin America (1953), pp. 44-46, 63-65
48
historically been the most volatile.98 The volatility of the terms of trade which can be
observed during the examined period should thus perhaps be expected in a region where
“[c]offee was king”99.
A “structure of dependence” – to use the words of Theotonio Dos Santos – could of
course still have existed between the United States and Central America during the examined
period. But it must in that case have manifested itself in other forms than those predicted by
Hirschman’s theory. Clearly, the level of trade concentration did not seem to affect the
external trading conditions with which the Central American countries where faced during the
examined twenty year period. Any structure of dependence enabling the United States to
control the Central American region, thus seem not to have affected the conditions for U.S. –
Central American trade. Moreover, the factor which according to Hirschman was supposed to
enable the U.S. to exert this type of control – the level of trade concentration – was steadily
decreasing throughout the period.
U.S. control over the Central American region seems to have come in a much higher
degree through the use of military force – described in section 2.2.1 - rather than through
coercive trade policy. These military interventions could then, to paraphrase von Clausewitz,
perhaps be seen as the extension of trade policy by other means. The magnitude and scope of
these interventions, must then be seen as a strong testimony to the impotence of trade
asymmetries with regards to enabling one nations control or dominance over another.
Hirschman’s assertion that the “structural characteristics of international economic relations…
98
Blattman, Cristopher, Hwang, Jason, Williamson, Jeffrey G. (2007), Winners and losers in the commodity
lottery: The impact of terms of trade growth and volatility in the Periphery 1870 – 1939, Journal of Development
Economics, pp. 157-166
99
Bulmer – Thomas (1987), p. 3
49
make the pursuit of power a relatively easy task”100, is thus clearly misleading. At least when
it comes to explaining the specific case with which this essay has been dealing.
This is also one of the central ideas in Walter LaFeber’s Inevitable revolutions. LaFeber
agrees with the Dependentistas that various forms of dependency has been present in the
dynamics of U.S. – Central American relations, which has often been detrimental for the
latter. However
“as the story unfolds, it becomes clear that the economic aspects of dependency theory are not sufficient to
explain how the United States gained such control over the region. Other forms of power, including political and
military, accompanied the economic. In Nicaragua from 1909 to 1912, for example, or in Guatemala during the
1954 crisis, or in El Salvador during the eighties, economic leverage proved incapable of reversing trends that
North American officials despised and feared. Those officials then used military force to destroy the threats. The
United States thus has intervened frequently with troops or covert operations to ensure that ties of depen-dency
remained”.
101
LaFeber calls this special relationship neo-dependency, to distinguish it from conventional
dependency theory. However, the dependent nature of the Central American countries is more
or less assumed in LaFeber (1983), thus the specific forms of this supposed dependency is
therefore never discussed thoroughly by LaFeber, nor does he attempt in any way to quantify
or measure the extent of this dependency.102 This task may perhaps be completed by future
research, which could add some depth to the interpretation of U.S. – Central American
relations during the post-war period.
100
Hirschman (1980), p. vi
101
LaFeber (1983), pp. 17-18
102
Other than by, for example, presenting figures concerning the absolute size of U.S. investments in the region
50
5. References
5.1 Literature
Aguilar, Alonso (1968), Pan-Americanism from Monroe to the present – A view from the
other side. London
Besanko, David & Braeutigam, Ronald R., (2005), Microeconomics. Hoboken
Bulmer – Thomas, Victor (1987), The political economy of Central America since 1920.
New York
Blattman, Cristopher, Hwang, Jason, Williamson, Jeffrey G. (2007), Winners and losers in the
commodity lottery: The impact of terms of trade growth and volatility in the Periphery
1870 – 1939, Journal of Development Economics 82 pp. 156-179
Cardoso, Fernando Henrique (1977), The consumption of dependency theory in the United
States. Latin American Research Review Vol. 12 No. 3, pp. 7-24
Child, F. C. (1958), The Theory and Practice of Exchange Control in Germany: A Study of
Monopolistic Exploitation in International Markets, International Scholars Forum, 10
The Hague.
Dos Santos, Theotonio (1970), The structure of dependence. The American Economic Review
Vol. 60 No. 2, pp. 321-236
East, Maurice A. (1973), Size and foreign policy behavior: A test of two models. World
politics Vol. 25 No. 4, pp 556-576
Einzig. P.(1938). Bloodless Invasion: German Economic Penetration into the Danubian
States and the Balkans London
Ellis. H. S.(1941), Exchange Control in Central Europe. Harvard Economic Studies. 69
Cambridge
51
Gunnarsson, Christer & Rojas, Mauricio (2004), Tillväxt stagnation kaos – En institutionell
studie av underutvecklingens orsaker och utvecklingens möjligheter. Kristianstad
Hirschman, Alfred O., (1980), National power and the structure of foreign trade.
New York.
Hunter, Virginia (1973), Athens tyrannis: A new approach to Thucydides. The Classical
Journal Vol. 69 No. 2, pp. 120-126
Kaufman, Robert R., Chernotsky, Harry I., Geller, Daniel S. (1975), A preliminary test of the
theory of dependency. Comparative Politics Vol. 7 No. 3, pp. 303-330
Kennedy, Paul (1991), On the “natural size” of Great Powers. Proceedings of the American
Philosophical Society Vol. 135 No. 4, pp. 485-489
Kleemeier, Lizz L. (1978), Empirical tests of dependency theory: A second critique of
methodology. The Journal of Modern African Studies Vol. 16 No. 4, pp. 701-704
Knopf, Alfred A. (1967), The Monroe Doctrine – Its modern significance. New York.
LaFeber, Walter (1983), Inevitable revolutions – The United States in Central America.
New York.
LaFeber, Walter (1994), The American age – United States foreign policy at home and
abroad. New York
Leonard, Thomas M (1991), Central America and the United States: The search for
stability. Athens, Georgia.
Mathisen, Trygve (1971), The functions of small states in the strategies of the great powers.
Oslo.
52
Ray Lee, James & Webster, Thomas (1978), Dependency and economic growth in Latin
America. International Studies Quarterly Vol. 22 No. 3, pp. 409-434
Singer, Hans (1950), The distribution of gains between investing and borrowing countries.
American Economic Review Vol.40 No.2, pp. 473-485
Vandenbosch, Amry (1964), The small states in international politics and organisation. The
journal of politics Vol. 26 No. 2, pp. 293-312
Wittkopf, E.R. (1973), Foreign aid and United Nations votes: a comparative study. American
Political Science Review Vol. 67, pp 868-888
5.2 Printed sources
United Nations statistical department (1953), Yearbook of international trade statistics 1953.
New York
United Nations statistical department (1955), Yearbook of international trade statistics 1955.
New York
United Nations statistical department (1962), Yearbook of international trade statistics 1962.
New York
United Nations statistical department (1964), Yearbook of international trade statistics 1964.
New York
United Nations statistical department (1966), Yearbook of international trade statistics 1966.
New York
United Nations statistical department (1968) Yearbook of international trade statistics 1968.
New York
United Nations statistical department (1971), Yearbook of international trade statistics 197071. New York
53
Economic Commission for Latin America (1953), Economic survey of Latin America 1953.
New York
5.3 Electronic material
Frank, Andre Gunder (1966), The development of underdevelopment in Monthly Review No.
6, 1989 (reprint), available [online]: http://findarticles. com/p/articles/ mi_m1132/ is_
n2_v41/ai_7659725
54
Appendix A. Central American trade 1948-1968 by country and percentage of
total trade
A.1. Costa Rican imports, percentage share of principal trading partners 103
Year:
Bel
Can
Col
Den
Els
Fra
Ger
Gua
Hon
Ind
Ita
Jap
Mex
Ned
Nea
Nic
Pan
Spa
Swe
Swi
Tri
UK
US
Ven
Oth
48
0,6
1,9
0,1
…
…
0,3
0,0
…
0,2
1,1
0,7
0,0
1,6
0,3
3,4
0,6
0,3
0,2
0,8
1,0
…
4,5
77,7
…
4,7
50
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
52
4,2
3,6
0,2
0,0
0,0
0,8
6,7
0,0
0,6
1,1
1,3
1,1
0,9
1,8
3,8
0,3
1,0
0,0
0,0
0,9
0,0
5,4
63,3
0,0
3,0
Trade concentration
1948 = 6081,5* sqrt = 78,0
1950 = N/A
1952 = 4138,6 sqrt = 64,3
1954 = 3655,7 sqrt = 60,5
1956 = 3157,4 sqrt = 56,2
1958 = 2843,8 sqrt = 53,3
1960 = 2460,7 sqrt = 49,6
1962 = 2526,2 sqrt = 50,3
1964 = 2388,6 sqrt = 48,9
1966 = 1820,2 sqrt = 42,7
1968 = 1737,9 sqrt = 41,7
54
2,0
3,1
0,4
…
…
1,4
10,0
…
0,3
0,3
1,5
1,7
1,0
2,2
3,9
0,0
1,1
0,5
0,6
1,0
…
7,2
58,8
…
3,0
56
1,9
2,8
0,9
…
0,0
2,2
9,4
0,0
0,1
0,5
2,3
2,1
0,8
2,7
4,3
0,3
1,2
0,5
0,8
1,4
0,0
6,2
54,5
0,0
5,1
58
1,7
2,6
0,9
0,7
0,7
1,3
10,6
0,1
0,1
0,7
2,0
5,2
1,6
4,3
4,2
0,2
1,0
0,3
0,6
1,1
0,0
5,7
51,1
0,6
2,5
60
2,3
3,2
0,6
0,9
0,8
2,1
11,5
0,4
0,1
0,3
1,6
7,2
1,0
3,7
1,8
1,8
1,0
0,5
0,6
1,2
0,4
5,8
46,8
1,6
2,3
62
2,1
3,6
0,7
0,2
1,8
1,5
11,7
0,3
0,1
0,3
2,3
6,7
1,1
2,8
3,2
0,7
1,2
0,3
0,6
2,6
0,5
5,1
46,5
1,7
2,1
64
1,5
3,0
0,9
1,1
2,1
2,1
10,4
2,0
0,5
0,2
1,8
7,5
1,5
2,0
2,4
1,4
1,0
0,5
0,6
1,5
0,3
5,1
46,3
1,7
2,6
66
1,6
3,1
0,9
0,4
4,3
2,3
9,9
5,1
1,1
0,0
1,5
8,8
2,3
1,8
2,1
2,4
1,6
0,5
0,9
1,2
0,4
4,8
39,1
1,2
2,3
68
1,4
1,3
1,0
0,2
7,5
1,2
7,7
7,4
2,4
0,0
1,5
7,0
2,1
1,4
0,5
5,5
1,5
0,5
0,8
1,1
0,4
4,2
37,9
2,8
2,4
Trade concentration excluding U.S.
1948 = 6081,5 - 6037,3 = 43,6 sqrt = 6,6
1950 = N/A
1952 = 4138,6 - 4006,9 = 131,7 sqrt = 11,5
1954 = 3655,7 - 3457,4= 198,3 sqrt = 14,1
1956 = 3157,4 - 2970,3 = 187,1 sqrt = 13,7
1958 = 2843,8 - 2611,2 = 232,6 sqrt = 15,3
1960 = 2460,7 - 2190,2 = 270,4 sqrt = 16,5
1962 = 2526,2 - 2162,3 = 363,9 sqrt = 19,1
1964 = 2388,6 - 2143,7 = 244,9 sqrt = 15,7
1966 = 1820,2 - 1528,8 = 291,3 sqrt = 17,1
1968 = 1737,9 - 1436,4 = 301,5 sqrt = 17,4
* Sum of the squares of the percentages
103
Belgium-Luxemburg (Bel), Canada (Can), Colombia (Col), Costa Rica (Cos), Denmark (Den), El Salvador
(Els), France (Fra), Germany (Ger), Guatemala (Gua), Honduras (Hon), India (Ind), Italy (Ita), Japan (Jap),
Mexico (Mex) Netherlands (Ned), Netherlands Antilles (Nea), Nicaragua (Nic), Panama (Pan), Panama Canal
Zone (Pcz), Peru (Per), Spain (Spa), Sweden (Swe), Switzerland (Swi), Trinidad & Tobago (Tri), United
Kingdom (UK), United States of America (US), Venezuela (Ven), Others (Oth)
55
A.2. Costa Rican exports, percentage share of principal trading partners
Year:
Bel
Bhn
Can
Col
Dan
Els
Fin
Fra
Ger
Gua
Hon
Ita
Jap
Jor
Ned
Nea
Nic
Pan
Pcz
Per
Sov
Swe
Swi
UK
US
Oth
48
1,9
50
N/A
N/A
1,5
N/A
4,4
N/A
N/A
N/A
N/A
1,3
N/A
0,1
N/A
N/A
0,1
N/A
2,5
N/A
0,0
N/A
N/A
2,7
N/A
0,1
N/A
0,2
N/A
0,3
N/A
N/A
N/A
N/A
0,3
N/A
1,6
N/A
0,2
N/A
78,6 N/A
4,2
N/A
52
1,3
0,0
9,6
1,4
0,0
0,0
0,0
0,0
1,6
0,0
0,3
2,9
0,0
0,0
4,1
0,1
0,3
1,3
0,0
0,0
0,0
0,0
1,5
0,2
72,4
3,0
Trade concentration
1948 = 6223,3 sqrt = 78,9
1950 = N/A
1952 = 5371,0 sqrt = 73,3
1954 = 3964,5 sqrt = 63,0
1956 = 3511,1 sqrt = 59,3
1958 = 3289,2 sqrt = 57,4
1960 = 3356,5 sqrt = 57,9
1962 = 3948,5 sqrt = 62,8
1964 = 3218,2 sqrt = 56,7
1966 = 2287,7 sqrt = 47,8
1968 = 2401,9 sqrt = 49,0
54
1,2
9,2
2,2
0,2
17,3
0,4
0,9
0,2
4,1
0,2
0,2
1,7
0,5
0,6
0,4
59,6
1,1
56
1,5
0,0
5,7
0,4
0,0
0,0
0,0
0,3
29,9
0,0
0,1
1,2
0,0
0,0
4,1
0,3
0,5
1,0
0,0
0,0
0,0
0,4
0,5
0,6
50.6
2,9
58
1,6
60
3,9
62
1,8
64
1,7
66
3,4
6,7
1,0
0,0
0,9
1,4
0,6
0,7
0,7
0,1
27,4
0,2
0,1
2,1
0,3-
1,2
24,4
1,0
0,1
2,1
0,4
0,6
1,3
0,2
1,3
0,4
0,5
22,0
0,1
0,2
1,6
0,6
0,5
0,3
0,2
6,4
1,1
0,5
17,3
2,8
1,3
1,8
0,4
0,9
0,4
0,2
4,5
1,7
1,2
11,8
3,5
3,2
1,5
0,9
2,2
0,4
0,7
1,2
0,6
2,3
3,5
0,3
1,1
1,5
1,5
0,5
5,2
0,4
0,3
0,7
0,2
1,0
5,3
0,6
3,0
1,3
0,1
0,1
5,2
0,1
7,3
2,0
0,0
0,9
0,7
0,9
0,2 1,1
1,1
0,9
49,7 52,1
0,5 0,2
1,4
0,4
0,8
58,5
0,5
1,0
0,3
0,4
53,1
0,5
3,3
0,2
0,5
44,5
2,8
68
1,3
1,2
0,6
0,0
0,1
5,0
1,8
1,0
6,1
4,7
3,6
1,1
1,2
2,5
4,3
0,2
7,9
2,9
0,0
0,0
1,0
2,3
0,2
0,2
46,8
4,0
Trade concentration excluding U.S.
1948 = 6223,3 – 6178,0 = 45,3 sqrt = 6,7
1950 = N/A
1952 = 5371,0 - 5241,8 = 129,2 sqrt = 11,4
1954 = 3964,5 – 3552,2 = 412,3 sqrt = 20,3
1956 = 3511,1 - 2560,4 = 950,7 sqrt = 30,8
1958 = 3289,2 – 2470,1 = 819,1 sqrt = 28,6
1960 = 3356,5 – 2714,4 = 642,1 sqrt = 25,3
1962 = 3948,5 – 3422,3 = 526,2 sqrt = 22,9
1964 = 3218,2 – 2819,6 = 398,6 sqrt = 20,0
1966 = 2287,7 – 1980,3 = 307,4 sqrt = 17,5
1968 = 2401,9 – 2190,3 = 211,6 sqrt = 14,6
56
A.3. El Salvadorian imports, percentage shares of principal trading partners
Year:
Bel
Can
Cos
Den
Fra
Ger
Gua
Hon
Ita
Jap
Mex
Ned
Nea
Nic
Pan
Swe
Swi
UK
US
Ven
Oth
48
3,1
2,7
0,0
0,0
0,6
0,00,44,91,30,02,21,31,10,00,91,23,773,4
3,2
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
52
1,5
2,7
0,1
0,5
1,1
4,2
1,4
4,0
1,9
1,4
1,7
6,1
0,0
1,9
0,3
0,8
1,1
4,7
62,6
0,0
2,0
Trade concentration
1948 = 5455,9 sqrt = 73,9
1950 = N/A
1952 = 4039,7 sqrt = 63,6
1954 = 3610,8 sqrt = 60,1
1956 = 2979,3 sqrt = 54,6
1958 = 2568,1 sqrt = 50,7
1960 = 2117,3 sqrt = 46,0
1962 = 1669,2 sqrt = 40,9
1964 = 1756,1 sqrt = 41,9
1966 = 1456,8 sqrt = 38,2
1968 = 1341,8 sqrt = 36,6
54
2,21,50,60,61,26,01,64,81,31,81,55,72,11,20,91,23,459,03,4
56
3,4
1,5
0,3
0,4
1,5
8,2
1,8
5,2
1,5
5,1
2,6
5,7
0,0
0,5
0,9
0,8
0,8
4,1
52,7
0,0
3,0
58
3,31,70,40,61,19,42,85,81,54,91,93,43,70,71,11,11,24,448,40,71,9
60
3,81,70,50,81,610,24,25,12,27,41,73,13,71,10,90,71,44,042,9
1,11,9
62
2,92,11,01,11,69,56,88,31,97,11,74,84,51,60,80,61,4
3,836,4
0,61,5
64
3,32,04,01,01,38,59,17,31,77,21,65,41,11,51,80,61,14,037,15,20,0
66
2,71,32,61,41,48,012,46,11,66,61,94,40,52,51,51,70,83,732,74,12,1
68
3,1
1,2
4,2
0,8
0,9
6,2
16,2
6,9
2,1
7,5
1,9
3,5
0,2
3,2
1,6
0,5
0,8
2,5
29,0
4,9
2,8
Trade concentration, excluding U.S.
1948 = 5455,9 - 5387,6 = 68,3 sqrt = 8,0
1950 = N/A
1952 = 4039,7 - 3918,8 = 120,9 sqrt = 11,0
1954 = 3610,8 - 3481,0 = 129,8 sqrt = 11,4
1956 = 2979,3 - 2777,3 = 202,0 sqrt = 14,2
1958 = 2568,1 - 2342,6 = 225,5 sqrt = 15,0
1960 = 2117,3 - 1840,4 = 276,9 sqrt = 16,6
1962 = 1669,2 - 1325,0 = 344,2 sqrt = 18,6
1964 = 1756,1 - 1376,4 = 379,7 sqrt = 19,5
1966 = 1456,8 - 1069,3 = 387,5 sqrt = 19,7
1968 = 1341,8 - 841 = 500,8 sqrt = 22,4
57
A.4. El Salvadorian exports, percentage share of principal trading partners
ElS
Bel
Can
Cos
Den
Fra
Ger
Gua
Hon
Hun
Ita
Jap
Hol
Nic
Pan
Per
Pol
Saf
Sov
Sud
Swe
Swi
UK
US
Oth
48
0,31,70,60,00,50,04,73,94,20,00,80,30,90,9-
0,30,70,077,4
2,8
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
52
1,5
1,0
0,1
0,0
0,1
3,3
0,5
1,4
0,0
2,4
0,0
3,6
0,5
0,1
0,0
0,0
0,0
0,0
0,0
0,3
0,0
0,8
83,6
0,8
Trade concentration
1948 = 6053,6 sqrt = 77,8
1950 = N/A
1952 = 7025,4 sqrt = 83,8
1954 = 5341,5 sqrt = 73,1
1956 = 2996,0 sqrt = 54,7
1958 = 2776,9 sqrt = 52,7
1960 = 2526,2 sqrt = 50,3
1962 = 2247,8 sqrt = 47,4
1964 = 1861,3 sqrt = 43,1
1966 = 1666,0 sqrt = 40,8
1968 = 1270,1 sqrt = 35,6
54
56
1,40,8
0,80,6
0,10,4
0,00,1
0,80,3
10,5- 29,4
1,12,2
1,8- 1,3
0,0
0,51,3
1,811,1
3,0- 3,2
1,20,8
0,1- 0,0
0,1- 0,0
0,80,13,272,10,5
0,9
0,0
2,6
44,5
0,5
58
1,80,80,50,20,432,42,63,0-
60
1,50,30,70,80,233,35,23,4-
1,910,92,41,00,00,0-
0,70,21,039,70,5
0,811,52,51,20,10,0-
62
0,60,51,31,10,225,95,64,4-
64
1,20,81,80,80,226,110,75,8-
0,619,22,02,40,10,0-
1,31,20,20,10,50,235,1- 33,81,4
0,2
66
0,80,64,30,60,024,712,69,0-
68
0,7
0,6
7,5
0,3
0,0
19,6
14,5
11,1
1,5
0,70,80,3
19,1- 11,46,9
1,82,61,7
2,45,37,0
0,20,0
0,0
0,00,00,0
2,3
1,7
1,7
1,1
0,60,2- 0,2
0,30,20,2
0,20,10,1
25,5- 25,1- 19,5
1,8
1,7
1,5
Trade concentration, excluding U.S.
1948 = 6053,6 - 5990,8 = 62,8 sqrt = 7,9
1950 = N/A
1952 = 7025,4 - 6989,0 = 36,4 sqrt = 6,0
1954 = 5341,5 - 5198,4 = 143,1 sqrt = 12,0
1956 = 2996,0 - 1980,3 = 1015,7 sqrt = 31,9
1958 = 2776,9 - 1576,1 = 1200,8 sqrt = 34,7
1960 = 2526,2 - 1232,0 = 1294,2 sqrt = 36,0
1962 = 2247,8 - 1142,4 = 1105,4 sqrt = 33,2
1964 = 1861,3 - 650,3 = 1211,0 sqrt = 34,8
1966 = 1666,0 - 630,0 = 1036,0 sqrt = 32,2
1968 = 1270,1 - 380,3 = 889,8 sqrt = 29,8
58
A.5. Guatemalan imports, percentage share of principal trading partners
Year:
Bel
Can
Cze
Cos
Dan
ElS
Fra
Ger
Hon
Ita
Jap
Mex
Hol
Ho-a
Nic
Swe
Swi
UK
US
Ven
Oth
48
0,82,20,7-
50
52
54
N/A 2,5 1,4N/A
5,4 2,6N/A
0,0 0,9N/A
0,8
N/A
0,0
2,3- N/A
0,3 0,90,4N/A
0,8 0,90,0- N/A
5,2
7,50,4- N/A
0,0
0,40,8- N/A
1,1 0,90,0- N/A
0,0 0,34,2N/A
4,7
4,30,2- N/A
0,9
1,84,3- N/A
5,4
5,5N/A
0,0
0,6N/A
0,3
0,41,0N/A
1,0
1,02,7N/A
5,5
3,976,2- N/A
62,9 64,50,0N/A
0,7
0,63,2
N/A
2,5
3,2
Trade concentration
1948 = 5865,0 sqrt = 76,6
1950 = N/A
1952 = 4106,1 sqrt= 64,1
1954 = 4299,0 sqrt = 65,6
1956 = 4635,3 sqrt = 68,1
1958 = 3706,4 sqrt = 60,9
1960 = 2668,4 sqrt = 51,7
1962 = 2542,7 sqrt = 50,4
1964 = 2281,4 sqrt = 47,8
1966 = 2085,1 sqrt = 45,7
1968 = 2048,4 sqrt = 45,3
56
2,0
1,9
0,0
0,0
0,0
0,6
0,9
6,2
0,5
0,9
0,6
3,6
1,8
5,1
0,0
0,4
0,8
3,6
67,3
0,6
2,1
58
1,22,80,0-
60
2,71,70,0-
0,50,9
1,39,80,62,10,83,42,45,4-
0,84,32,112,00,71,94,41,52,36,1-
0,3- 0,51,1- 1,15,2
4,159,3 49,0
0,8- 1,22,1
3,6
62
64
2,12,32,21,80,00,00,11,41,00,73,49,52,41,510,110,91,11,82,22,05,26,02,32,12,62,05,71,90,10,40,50,51,51,45,13,848,044,51,22,33,2
3,2
66
2,01,50,02,10,511,41,28,61,92,17,52,41,60,51,00,71,44,841,93,53,4
68
1,5
1,2
0,0
2,7
0,5
11,2
1,4
10,4
2,3
2,0
9,0
2,6
1,6
0,5
1,1
0,7
1,8
4,7
40,9
0,6
3,3
Trade concentration, excluding U.S.
1948 = 5865,0 - 5806,4 = 58,6 sqrt = 7,7
1950 = N/A
1952 = 4106,1 - 3956,4 = 149,7 sqrt = 12,2
1954 = 4299,0 - 4160,3 = 138,7 sqrt = 11,8
1956 = 4635,3 - 4529,3 = 106,0 sqrt = 10,3
1958 = 3706,4 - 3516,5 = 189,9 sqrt = 13,8
1960 = 2668,4 - 2401,0 = 267,4 sqrt = 16,4
1962 = 2542,7 - 2304,0 = 238,7 sqrt = 15,4
1964 = 2281,4 - 1980,3 = 301,1 sqrt = 17,4
1966 = 2085,1 - 1755,6 = 329,5 sqrt = 18,2
1968 = 2048,4 - 1672,8 = 375,6 sqrt = 19,4
59
A.6. Guatemalan exports, percentage share of principal trading partners
Year:
Bel
Can
Cos
Els
Fin
Fra
Ger
Hon
Ita
Jap
Ned
Nea
Nic
Por
Spa
Swe
Swi
UK
US
Ven
Oth
48
1,3
3,9
0,3
0,1
0,1
0,1
0,7
0,0
0,5
0,1
0,6
0,5
1,4
88,9
0,8
0,7
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
52
2,1
0,9
0,0
1,1
0,0
0,1
2,3
0,0
0,8
0,0
5,6
0,0
0,0
0,0
0,0
0,5
0,2
1,7
83,3
0,0
1,4
Trade concentration
1948 = 7924,5 sqrt = 89,0
1950 = N/A
1952 = 6986,5 sqrt = 83,6
1954 = 5175,7 sqrt = 71,9
1956 = 5278,7 sqrt = 72,7
1958 = 1829,1sqrt = 42,8
1960 = 2205,2 sqrt = 47,0
1962 = 2903,5 sqrt = 53,9
1964 = 1604,5 sqrt = 40,1
1966 = 1445,4 sqrt = 38,0
1968 = 1361,1 sqrt = 36,9
54
4,3
2,4
1,6
0,1
8,3
0,0
0,1
0,2
7,5
0,1
3,2
0,1
0,7
70,8
0,1
0,5
56
2,5
1,4
0,0
1,2
0,0
0,2
9,0
0,0
0,3
0,7
8,2
0,0
0,0
0,0
0,0
2,6
0,4
0,6
71,5
0,0
1,4
58
2,0
3,8
0,6
1,1
60
2,1
0,2
2,1
2,3
2,7
19,0
0,5
2,5
11,8
13,2
1,1
2,5
15,7
0,0
2,1
15,5
5,9
1,8
0,6
0,2
4,7
33,1
0,0
3,1
0,0
0,0
4,6
40,4
0,4
4,4
62
1,9
0,3
0,1
5,4
0,6
0,3
18,8
1,5
1,3
9,5
5,0
0,0
0,6
0,3
0,2
1,9
0,6
1,0
48,9
0,0
1,8
64
1,7
0,3
1,6
10,4
1,1
2,6
16,0
3,3
3,8
10,1
4,4
0,0
2,7
0,4
0,2
1,0
0,9
2,3
32,6
0,0
4,6
66
1,9
0,2
3,2
12,6
1,5
1,5
13,4
3,2
2,4
8,6
2,4
0,0
3,5
1,7
2,6
1,1
0,4
0,7
31,1
0,0
4,0
68
1,5
0,4
6,3
14,3
1,6
0,3
9,5
5,6
2,6
11,1
2,5
0,0
5,0
1,0
0,3
0,7
0,4
1,0
27,9
0,3
5,7
Trade concentration, excluding U.S.
1948 = 7924,5 - 7903,2 = 21,3 sqrt = 4,6
1950 = N/A
1952 = 6986,5 - 6938,9 = 47,6 sqrt = 6,9
1954 = 5175,7 - 5012,6 = 163,1 sqrt = 12,8
1956 = 5278,7 - 5112,3 = 166,4 sqrt = 12,9
1958 = 1829,1 - 1095,6 = 733,5 sqrt = 27,1
1960 = 2205,2 - 1632,2 = 573,0 sqrt = 23,9
1962 = 2903,5 - 2391,2 = 512,3 sqrt = 22,6
1964 = 1604,5 - 1062,8 = 541,7 sqrt = 23,3
1966 = 1445,4 - 967,2 = 478,2 sqrt = 21,9
1968 = 1316,1 - 778,4 = 537,7 sqrt = 23,2
60
A.7. Honduran imports, percentage share of principal trading partners
Year:
Bel
Can
Col
Cos
Cub
Cze
Els
Fra
Ger
Gua
Ita
Jap
Mex
Ned
Nea
Nic
Pan
Per
Swe
Swi
UK
US
Ven
Oth
48
0,1
0,3
0,3
0,1
1,6
5,1
0,0
0,1
0,2
0,0
4,9
0,1
5,1
0,1
0,1
0,5
1,1
78,7
0,0
1,6
50
0,4
0,6
0,0
0,1
0,4
0,0
5,1
0,0
0,3
0,3
0,0
0,3
2,4
0,2
4,1
0,1
0,4
0,8
0,0
0,0
2,0
78,9
0,2
3,4
52
5,4
0,7
0,4
0,2
0,5
54
1,1
0,8
0,2
0,4
0,5
2,4
2,9
2,0
0,8
0,6
1,2
1,5
1,0
3,4
0,5
0,5
0,5
6,2
0,0
0,7
3,9
1,4
1,3
4,6
0,7
0,1
0,0
3,3
73,6
0,0
1,5
3,0
68,6
0,1
3,5
Trade concentration
1948 = 6274,8 sqrt = 79,2
1950 = 6281,3 sqrt = 79,3
1952 = 5486,5 sqrt = 74,1
1954 = 4807,1 sqrt = 69,3
1956 = 4680,4 sqrt = 68,4
1958 = 3741,1 sqrt = 61,2
1960 = 3311,4 sqrt = 57,5
1962 = 2871,4 sqrt = 53,6
1964 = 2600,3 sqrt = 51,0
1966 = 2708,7 sqrt = 52,0
1968 = 2416,1 sqrt = 49,2
56
1,7
1,2
1,0
0,0
0,9
0,0
2,2
0,0
6,3
0,0
0,5
5,3
0,9
1,0
4,6
0,2
0,2
0,0
0,0
0,0
2,6
67,6
0,0
3,8
58
1,7
1,1
0,2
0,2
0,4
0,6
5,5
0,3
7,0
0,4
0,7
6,1
1,2
1,4
6,5
0,1
1,1
0,0
2,6
59,7
0,1
3,1
60
1,7
1,7
0,1
0,1
0,1
0,8
5,7
0,9
7,5
1,5
0,8
6,1
1,3
1,7
5,4
0,1
0,3
0,0
3,8
55,9
0,5
4,0
62
1,9
1,0
0,6
0,2
0,0
0,9
7,2
0,9
6,1
3,8
1,6
6,0
1,2
1,6
5,8
0,1
0,2
0,0
3,0
51,7
0,6
5,6
64
1,1
1,0
0,5
1,7
0,0
0,5
8,8
0,8
6,4
5,7
1,1
5,4
1,0
1,7
4,7
1,5
0,2
0,0
0,6
0,6
3,1
48,8
0,3
4,5
66
1,2
0,6
0,4
3,4
0,0
0,2
9,9
0,7
5,4
6,6
1,1
3,6
0,8
1,9
3,1
1,9
0,2
0,0
0,5
0,6
3,0
49,8
0,6
4,5
68
1,2
0,8
0,4
3,5
0,0
0,2
12,6
0,7
4,5
7,7
0,8
5,4
0,9
1,5
1,9
2,5
0,2
0,0
0,6
0,8
2,5
45,9
2,1
3,3
Trade concentration, excluding U.S.
1948 = 6274,8 - 6193,7 = 81,1 sqrt = 9,0
1950 = 6281,3 - 6225,2 = 56,1 sqrt = 7,5
1952 = 5486,5 - 5417,0 = 69,5 sqrt = 8,3
1954 = 4807,1 - 4706,0 = 101,1 sqrt = 10,1
1956 = 4680,4 - 4569,8 = 110,6 sqrt = 10,5
1958 = 3741,1 - 3564,1 = 177,0 sqrt = 13,3
1960 = 3311,4 - 3124,8 = 186,6 sqrt = 13,7
1962 = 2871,4 - 2672,9 = 198,5 sqrt = 14,1
1964 = 2600,3 - 2381,4 = 218,9 sqrt = 14,8
1966 = 2708,7 - 2480,0 = 228,7 sqrt = 15,1
1968 = 2416,1 - 2106,8 = 309,3 sqrt = 17,6
61
A.8. Honduran exports, percentage share of principal trading partners
Year:
Bel
Can
Col
Cos
Cub
Els
Fin
Fra
Ger
Gua
Ita
Jam
Jap
Ned
Nea
Nic
Pan
Swe
Swi
UK
US
Ven
Oth
48
0,1
3,1
0,0
0,4
7,6
11,4
0,0
0,0
0,0
0,8
0,0
0,0
0,0
0,2
0,0
0,5
0,8
0,0
0,0
0,0
72,9
0,7
1,5
50
0,2
4,5
0,0
1,1
4,6
14,0
0,0
0,0
0,0
0,7
0,0
0,0
0,0
0,9
0,0
0,3
0,2
0,0
0,0
2,1
69,3
1,4
0,6
52
0,1
4,9
0,0
0,6
7,4
10,1
0,0
0,0
0,7
0,5
0,0
0,0
0,0
1,0
0,0
0,4
0,2
0,0
0,0
0,2
70,8
1,6
1,5
Trade concentration
1948 = 5514,7 sqrt = 74,3
1950 = 5049,2 sqrt = 71,1
1952 = 5199,1 sqrt = 72,1
1954 = 6064,4 sqrt = 77,9
1956 = 4341,6 sqrt = 65,9
1958 = 4080,2 sqrt = 63,9
1960 = 3502,3 sqrt = 59,2
1962 = 3870,9 sqrt = 62,2
1964 = 3207,6 sqrt = 56,6
1966 = 3449,6 sqrt = 58,7
1968 = 2529,8 sqrt = 50,3
54
0,0
3,9
0,5
0,5
2,1
6,5
0,0
0,0
0,7
0,5
0,2
0,0
0,0
4,9
0,4
0,0
0,2
0,0
0,0
0,4
77,3
1,1
0,8
56
0,4
9,0
0,1
0,1
2,2
10,2
0,0
0,0
5,8
1,2
1,5
0,0
0,0
0,7
0,1
0,0
0,1
0,0
0,0
1,1
64,1
1,7
1,7
58
0,1
4,9
0,1
0,3
2,8
7,8
0,0
0,0
5,3
1,5
1,4
1,2
2,8
1,9
0,1
0,1
0,1
2,0
0,1
0,9
62,7
2,3
1,6
60
0,3
2,4
0,0
0,0
2,5
10,2
0,0
0,0
7,2
2,6
2,2
1,8
1,2
3,1
0,2
0,2
0,2
1,3
0,8
1,7
57,4
2,7
2,0
62
1,1
2,9
0,0
0,2
0,0
11,5
0,0
0,0
7,4
3,9
1,0
1,0
0,4
3,8
0,4
0,0
0,6
0,0
1,6
1,0
60,3
1,2
1,7
64
0,5
2,0
0,0
0,8
0,0
12,0
0,7
0,8
11,1
4,2
0,5
2,1
3,6
3,6
0,2
0,9
0,0
0,0
0,4
0,6
53,7
0,3
2,0
66
1,7
0,0
0,0
1,2
0,0
7,4
0,3
0,7
15,6
3,3
2,7
1,1
2,5
1,6
0,3
1,7
0,2
0,2
0,2
0,3
55,8
0,0
3,2
68
5,0
0,0
0,0
3,0
0,0
7,7
0,1
0,2
18,7
4,0
3,4
1,2
4,0
0,4
0,2
2,3
0,7
0,0
0,1
0,4
45,1
0,3
3,2
Trade concentration, excluding U.S.
1948 = 5514,7 - 5314,4 = 200,3 sqrt = 14,2
1950 = 5049,2 - 4802,5 = 246,7 sqrt = 15,7
1952 = 5199,1 - 5012,6 = 186,5 sqrt = 13,7
1954 = 6064,4 - 5975,3 = 89,1 sqrt = 9,4
1956 = 4341,6 - 4108,8 = 232,8 sqrt = 15,3
1958 = 4080,2 - 3931,3 = 148,9 sqrt = 12,2
1960 = 3502,3 - 3294,8 = 207,5 sqrt = 14,4
1962 = 3870,9 - 3636,1 = 234,8 sqrt = 15,3
1964 = 3207,6 - 2883,7 = 323,9 sqrt = 18,0
1966 = 3449,6 -3113,6 = 336,0 sqrt = 18,3
1968 = 2529,8 - 2034,0 = 495,8 sqrt = 22,3
62
A.9. Nicaraguan imports, percentage share of principal trading partners
Year:
Bel
Can
Cos
Tai
Den
ElS
Fra
Ger
Gua
Hon
Ita
Jap
Mex
Hol
Hoa
Pan
Per
Swe
Swi
UK
US
Ven
Oth
48
0,40,80,40,00,80,00,00,80,00,03,70,03,30,80,80,00,01,783,8
2,7
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
52
3,01,50,5-
56
2,9
1,6
0,6
0,0
0,00,0- 0,3
1,82,7- 1,5
0,50,5- 1,2
4,08,9- 7,3
0,0
0,30,0- 0,1
0,50,9- 0,9
1,02,1- 1,9
2,31,0- 1,0
1,01,2- 1,0
5,04,8- 6,7
1,52,7- 2,5
0,0- 0,0- 0,0
0,00,3- 0,4
0,30,7- 0,7
3,8- 3,3- 4,1
71,3- 65,0- 62,8
0,1
1,7
2,0
2,4
Trade concentration
1948 = 7054,7 sqrt = 84,0
1950 = N/A
1952 = 5164,9 sqrt = 71,9
1954 = 4371,0 sqrt = 66,1
1956 = 4088,4 sqrt = 63,9
1958 = 3216,3 sqrt = 56,7
1960 = 2975,4 sqrt = 54,5
1962 = 2769,7 sqrt = 52,6
1964 = 2447,1 sqrt = 49,5
1966 = 2309,2 sqrt = 48,1
1968 = 1770,2 sqrt = 42,1
54
2,41,70,3-
58
4,01,91,00,41,80,57,80,40,30,93,91,41,87,12,80,00,50,64,154,91,42,5
60
3,21,80,6-
62
4,02,00,5-
64
66
3,23,81,01,33,05,82,30,00,40,60,40,52,43,23,15,50,40,50,40,57,87,37,96,90,71,63,84,90,10,20,71,20,8- 1,72,61,26,65,96,15,41,5- 1,61,61,51,52,43,12,25,9- 4,90,90,83,3- 3,22,92,60,8- 0,00,00,00,6- 0,50,70,41,00,80,70,74,2- 4,23,83,552,7- 50,8- 47,3- 45,71,3- 1,4
4,0
2,82,4
2,7
0,5
2,8
68
1,9
0,8
7,7
0,0
0,4
8,1
0,3
6,1
7,1
2,2
1,1
7,6
1,9
3,1
1,3
2,9
0,0
0,4
0,5
3,0
38,0
3,4
2,2
Trade concentration, excluding U.S.
1948 = 7054,7 - 7022,4 = 32,3 sqrt = 5,7
1950 = N/A
1952 = 5164,9 - 5083,7 = 81,2 sqrt = 9,0
1954 = 4371,0 - 4225,0 = 146,0 sqrt = 12,1
1956 = 4088,4 - 3943,8 = 144,6 sqrt = 12,0
1958 = 3216,3 - 3014,0 = 202,3 sqrt = 14,2
1960 = 2975,4 - 2777,3 = 198,1 sqrt = 14,1
1962 = 2769,7 - 2580,6 = 189,1 sqrt = 13,8
1964 = 2447,1 - 2237,3 = 209,8 sqrt = 14,5
1966 = 2309,2 - 2088,5 = 220,7 sqrt = 14,9
1968 = 1770,2 - 1444,0 = 326,2 sqrt = 18,1
63
A.10. Nicaraguan exports, percentage share of principal trading partners
Year:
Bel
Can
Cos
Cub
Els
Fra
Ger
Gua
Hon
Ita
Jam
Jap
Ned
Nea
Pan
Per
Swe
Tiw
UK
US
Ven
Oth
48
0,7
0,4
2,6
2,2
3,0
4,5
0,0
0,4
0,0
0,4
0,0
1,5
0,4
0,7
1,9
3,0
0,4
0,0
0,7
74,5
2,2
0,5
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
52
2,50,60,41,02,51,64,70,00,82,10,62,54,90,81,62,30,40,0
13,152,85,10,0
Trade concentration
1948 = 5613,4 sqrt = 74,9
1950 = N/A
1952 = 3068,5 sqrt = 55,4
1954 = 2562,3 sqrt = 50,6
1956 = 2898,1 sqrt = 53,8
1958 = 1831,0 sqrt = 42,8
1960 = 2207,1 sqrt = 47,0
1962 = 2277,6 sqrt = 47,7
1964 = 1703,0 sqrt = 41,3
1966 = 1731,3 sqrt = 41,6
1968 = 1746,9 sqrt = 41,8
54
2,90,20,20,52,90,013,50,00,60,30,510,85,41,0
0,3
1,6
1,8
0,0
11,8
45,5
0,0
0,2
56
2,9
0,9
0,2
0,7
0,9
0,3
26,5
0,0
0,2
0,2
0,9
10,4
12,1
1,0
0,2
1,2
0,3
0,0
7,8
43,2
0,2
0,0
58
2,03,80,6
1,1
1,1
2,7
19,0
0,0
0,5
2,5
0,5
11,8
13,2
1,1
0,2
1,4
0,6
0,0
4,7
33,1
0,0
0,1
60
2,1
0,2
2,1
0,4
2,3
2,5
15,7
0,0
0,0
2,1
0,7
15,5
5,9
1,8
0,2
1,6
0,0
0,0
4,6
40,4
0,4
1,5
62
64
1,5
1,8
0,0
0,1
1,2
2,5
0,0
0,0
2,3
1,9
1,8
3,4
15,5 17,8
0,5
0,6
0,1
1,0
1,7
2,0
0,1
0,2
21,7
24,1
5,0
4,6
1,0
0,8
0,0
0,2
1,1
0,0
0,2
0,3
0,1
0,3
4,1
3,3
38,8 27,2
0,0
0,0
3,3
5,9
66
1,7
0,1
4,1
0,0
3,9
0,5
15,3
1,7
2,2
2,5
0,2
30,9
2,8
0,4
0,1
0,0
0,0
1,2
1,8
22,0
0,1
5,5
68
1,9
0,6
7,0
0,0
3,6
0,4
11,3
2,2
2,8
2,0
0,0
26,9
2,1
0,0
0,3
0,0
0,1
0,0
2,1
28,3
0,7
4,7
Trade concentration, excluding U.S.
1948 = 5613,4 - 5550,3 = 63,1 sqrt = 7,9
1950 = N/A
1952 = 3068,5 - 2787,8 = 280,7 sqrt = 16,8
1954 = 2562,3 - 2070,3 = 492,0 sqrt = 22,2
1956 = 2898,1 - 1866,2 = 1031,9 sqrt = 32,1
1958 = 1831,0 - 1095,6 = 735,4 sqrt = 27,1
1960 = 2207,1 - 1632,2 = 574,9 sqrt = 24,0
1962 = 2277,6 - 1505,4 = 772,2 sqrt = 27,8
1964 = 1703,0 - 739,8 = 963,2 sqrt = 30,6
1966 = 1731,3 - 484,0 = 1247,3 sqrt = 35,3
1968 = 1746,9 - 800,9 = 946,0 sqrt = 30,8
64