Abstract: | Costa Rica is often cited as a model for Central American economies because of its strong democratic institutions, political stability, and open economy. Foreign investment continues to play a pivotal role in fueling economic growth, particularly in the electronics, services, and medical components sectors. A strong record of social investments has resulted in a superior human resource base, a skilled labor pool, and preservation of its biodiversity. The recent formation of the Central American Free Trade Agreement (CAFTA) provides new opportunities for the country but has also increased the pressures for more openness and privatization, particularly in the telecommunications industry, provoking fresh internal debate about the balance between economic growth and preserving social institutional arrangements. © 2005 Wiley Periodicals, Inc. |