The development of business associations in Central America: the role of international actors and economic integration

• Date: 01 November 2014
• Author: Benedicte Bull
• DOI: http://doi.org/10.1002/pa.1420
• Published date: 01 November 2014

■Special Issue Paper

The development of business associations

in Central America: the role of international

actors and economic integration

Benedicte Bull*

Centre for Development and the Environment, University of Oslo, Oslo, Norway

This article analyses the formation and development of business associations in Central America from the 1960s to the

present. It shows how the development of the region’s economies and its formal business associations were shaped by

increasing economic integration in the region and by foreign governments and institutions. The argument presented is

that the role of external actors and increasing international economic and political integration renders inadequate the

commonly held explanation regarding the existence and operation of business associations as interest groups in the

region. The origin, cohesiveness, evolution and influence of many formal business organizations in Central America

is the result not only of a self-help function, the dynamics of business–state relations, or that of business reacting to

perceivedthreats from labour or other organizedgroups, but also of various internationalinfluences. These international

forces worked to bothdivide and unify the region’s business interests butoverall have increased their numbers and the

technical and political capacityof both new and existing organizations. Copyright© 2012 John Wiley & Sons, Ltd.

INTRODUCTION

As a basis for considering the recent development

and contemporary role of formal business interest

groups (as distinguished from the informal forces

of business as unofficial power groups) in Central

America, three initial explanations are important.

These are the following: how Central America is

defined, the major thesis or argument of this

article and the use of names and acronyms of orga-

nizations in the region.

Today, in most fields of study and in business, the

designation of Central America includes the six

countries of Costa Rica, El Salvador, Guatemala,

Honduras, Nicaragua and Panama. However, until

1903, Panama was part of Colombia and has

historically developed quite apart from the other

five countries that formed the Central American

Republic (1823–1840) and were members of the

different institutions of the Central American

integration formed in the late 1950s. Panama

became part of some of the regional institutions

after their revival in the 1990s, but it has often

followed its own path regarding integration

agreements with third parties. For instance, it is not

a member of the Dominican Republic–Central

America–USA Free Trade Agreement (DR-CAFTA)

and was originally not part of the negotiations for

an Association Agreement with the European Union

(AA-EU). Given Panama’s loose historical ties with

the rest of Central America, the term is used in this

article to include the original five countries.

Whether embracing five or six countries, Central

America is sometimes referred to as a region and

sometimes as a sub-region of Latin America. In

other cases, it is grouped together with the Carib-

bean, as in the designation ‘Central America and

the Caribbean’. In this article, we refer to the five

countries of Central America as a region and specify

Latin America when referring to the larger region.

Intra-regional trade refers to that between two or

more of the five countries and foreign trade to

trade between the region and the rest of the world,

including the rest of Latin America.

As to what has shaped Central American

business interest groups as economic forces and

political interests, the article argues that this is best

explained by a confluence of forces. Existing litera-

ture explains the establishment and development

of business associations as a result of self-help

internal needsof a business sector, threatsto business

from the state or organized labour, or a consequence

*Correspondence to: Benedicte Bull, Centre for Development and

the Environment, University of Oslo, Oslo, Norway.

E-mail: benedicte.bull@sum.uio.no

Journal of Public Affairs

Volume 14 Number 3 pp 331–345 (2014)

Published online 17 April 2012 in Wiley Online Library

(www.wileyonlinelibrary.com) DOI: 10.1002/pa.1420

Copyright © 2012 John Wiley & Sons, Ltd.