ABSTRACT
Ecuador is a country in which the linkages between economic fluctuations and political stability are particularly well defined. Since the late 1800s, the export sector has been the leading sector of the economy, and a single export—first cacao, then bananas, and petroleum—has accounted for the lion's share of export earnings. The ability to satisfy competing demands for public expenditures is by no means the only source of political legitimacy and stability, but for Ecuador it has been an important one. The cacao boom brought unprecedented wealth to Ecuador, Because ownership and control of cacao production largely resided in Ecuadorian hands, not foreign ones, the income from cacao exports accrued to nationals. The cacao boom financed the successful liberal revolution of 1895, ending the lengthy period of conservative domination. Wealthy coastal growers and exporters provided the funds needed to raise an army and to install Eloy Alfaro, an experienced soldier and businessman, as its commander.
