ABSTRACT
This chapter examines Costa Rica's political economy, the relationship between the nation's economy and its politics. It reviews the nation's political economic evolution, focusing principally upon successive development models and their implications for politics and public policy. Political economy may also affect democracy and social justice. The political and economic actors of a nation (classes, parties, interest and pressure groups, and institutions, including the state itself) contend for influence over the issues. Costa Rica imports all of its oil, making the economy sensitive to petroleum prices. Costa Rica has long had a regressive tax structure in which consumers and poorer citizens have carried the bulk of the state's revenue burden, mainly through sales taxes. Coffee and bananas once dominated Costa Rica's exports but left the nation vulnerable to unfavorable prices cycles and eroding terms of trade. One positive aspect of the neoliberal model has been the growth of nontraditional exports.
