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Evaluating Country Programmes
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Pre-1972: A typical developing country
Prior to 1972, US assistance to Costa Rica was about equal to that of other
Central American countries, and moderately higher on a per capita basis than US
assistance to the larger Latin American countries. Latin America received more aid
than other regions because the United States considered it “America’s backyard”.
On the one hand, Costa Rica’s longstanding commitment to mass education and
democracy, and the relatively high quality of government institutions, favoured aid
to Costa Rica. On the other hand, its relatively high level of development made it a
questionable claimant, and that trait led USAID in 1970 to plan to phase out assistance
to Costa Rica.
Basic needs (1972-80): Costa Rica as residual claimant
The proposed phase-out of aid to Costa Rica brought declines in Mission staffing
and programme levels, but a firm decision to actually terminate the programme
was continually deferred. A shift in the overall USAID approach to “basic human
needs”-emphasising help to the poorest in poorest countries should have accelerated
the close of the Mission. Aid levels were reduced, but less so than might have
been expected. Programmes in Latin America were cut, while those in Asia and
Africa were increased. Though planned levels for Costa Rica were low, it consistently
received more aid than was envisaged. When proposed projects failed to
materialise in other countries for technical or for political reasons (such as a coup
d’état), Costa Rica was always considered a safe place to put extra resources at the
end of the fiscal year and, thus, was a “residual claimant” for available resources in
Latin America. Costa Rican institutions could develop and manage projects well
and ensure that they would benefit the poor.
The 1980s: the Sandinista windfall
Costa Rica’s fortunes as a claimant for US economic aid improved dramatically
during 1982-92. Measured in 1994 dollars, it received more than USD1.4 billion
during this decade, compared to USD0.8 billion in the previous 35 years. The debt
crisis of the early 1980s hit Costa Rica hard, but no harder than it struck the rest of
the developing world. The special justification for assistance to Central America was
the leftist Sandinista Government in Nicaragua. The Reagan administration, which
took office in 1981, adopted a foreign policy stance towards Nicaragua of isolation
and hostility. The administration feared Sandinista support for guerrilla groups
elsewhere in Central America, a view given credence when the outgoing Carter
administration cut off US aid to Nicaragua because of mounting evidence of Sandinista
support for Salvadoran insurgents. The United States gave great importance
to the boast attributed to one of the Nicaraguan comandantes that Central American
countries would fall like ripened fruit to revolution, with Costa Rica coming last, as
dessert.
OECD 1999