ABSTRACT
Historically, Costa Rica has been the most welfare-oriented nation in Central America. Relatively large sums have been spent on education, health care as well as, in recent years, housing. However, at the beginning of the 1980s, the economy had to face an economic crisis which has been the longest and deepest one since the depression of the 1930s. This, in turn, points to an important problem which has to be tackled in the immediate future. Unless external finance can be obtained, the question as to whether an economy can sustain the development of its social sectors is crucially dependent on its ability to produce agricultural and industrial goods. This is as true for Costa Rica as for any other developing country. The present chapter will be devoted to an analysis of some of the structural, long-run problems of the Costa Rican economy: problems that in one way or another bear on the ability of the country to expand production and continue the road towards a welfare state of, say, the Scandinavian type.1
