ABSTRACT
The colonial economy, based on subsistence farming supplemented by cocoa, gave way to coffee production for export in the post-independence period. The reliance on export commodities was foreshadowed by a small-scale experiment in tobacco at the close of the colonial period, which gave rise to three groups of economic actors: producers, transporters, and warehousers. Coffee quickly emerged as the engine of economic development and national modernization. Geographic isolation protected it from many of the embroglios of the troubled Central American Federation. The country achieved long-term political stability when General Tomas Guardia , breaking the hold of Conservative landowning families, seized power and consolidated Liberal control. The success of the coffee experiment, the stability of the European markets, and low military expenditures brought the country relative prosperity. The crisis of 1913 was repeated with greater force with the collapse of the world capitalist economy in 1930.
