ABSTRACT
This chapter analyses the contribution of the CACM to economic change in the region, and the circumstances that prompted the crisis and disruption within it by the end of the 1960s. Historically the CACM has been seen as an engine for economic growth in Central America. Economic analyses have predominated in explaining economic growth, making the case for economic integration under the common market. The traditional argument is that integration is good for the states in that it promotes free trade within the region. Disintegration and unilateral actions, on the other hand, are undesirable or counterproductive for economic development given some levels of interdependence between states. The selfi shness of the governments has been invoked to explain disintegration. Little attention, however, has been dedicated to understanding the impact of distributional confl icts and the central role of high politics in explaining instability and setbacks on integration. Likewise, the impact of the external environment in the process of integration was largely neglected in earlier studies. Intergovernmentalism provides an explanation for these crises and will attempt to address some of the shortcomings of the traditional views of integration. The case will be made for the connection between the domestic political economy of the states with the greater picture of the global political economy. Two theses are advanced here.
