ABSTRACT
This chapter demonstrates that Honduras manipulated the issue of balanced growth to serve domestic political and economic ends. Moreover, the issue of balanced growth did not have to become magnified into crisis proportions and could have been avoided entirely–-by both Honduras and Nicaragua. A number of Honduras' top economic officials did not support the campaign to secure preferential treatment in the Common Market. The major obstacle to the equitable participation of Honduras in the Common Market was not the "backwash effects" of the current free trade arrangement. During the formative years of the Common Market, theorists had predicted that Nicaragua would have economic difficulties similar to those of Honduras and would thus require similar preferential treatment status. Ernst Haas presents the balanced growth issue as his primary empirical generalization concerning integration efforts in the developing world. The general underdevelopment of a region, he says all national actors are sensitive to any negative changes in the patterns of their economic transactions.
