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Evaluating Country Programmes
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Major projects during this period included: funding for a new land-reform
agency for land titling and colonisation; low-income housing through a new government
housing agency; credit for agriculture and establishment of a savings and loan
system through the state banking system; highway maintenance; and establishment
of a private investment bank. With the exception of the investment bank, all
the major projects of this period attempted to strengthen existing government
institutions or to create new ones. USAID also began grant assistance for family
planning in 1967 through ties to the Costa Rican Demographic Association, a private
group fearful of adverse effects of rapid population growth. The most complex
project was the USD20 million agricultural sector loan, which provided funding for
a dozen government entities involved in agriculture to expand programmes and to
improve co-ordination among government agencies.
USAID also strongly supported Costa Rica through its large Central American
regional programme. Funding was provided for highways, industrial credit, electrical
and telephone interconnection with neighbouring nations, expanded regional
institutions for public administration, nutrition, business administration, and a
regional bureaucracy to promote economic integration.
Assessment
Costa Rica met most of the goals set by the Alliance for Progress. In most
dimensions, including social indicators and growth of GDP, the country exceeded
targets set by the Alliance during the 1960s. New institutions were created, taxation
was increased to finance higher levels of public investment, and Costa Rica rapidly
increased its trade with the rest of Central America. By the late 1960s, USAID began
debating when to close the Costa Rica Mission.
Two internal problems and one outside event later emerged to cast a shadow
on the Costa Rican success story. First, expansion of the public sector was not the
unmixed blessing expected by the architects of the Alliance. Government organisations
are easier to create and expand than to eliminate or adapt to changing circumstances.
USAID and the Costa Rican Government made too strong an assumption
that “public sector” was synonymous with “public good”. Construction of new roads
was favoured over the workaday task of road maintenance. Agricultural credit and
extension became bureaucratic – more involved in internal government politics
and less connected to the needs of farmers.
National planning as a key technocratic tool to long-term development also
proved a mistake. In Costa Rica, the National Planning Office (now a ministry)
emerged as a political entity committed to implementing the specific programme
of the administration in power.
OECD 1999