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Economic Development of Central America Econ. 4200 - Spring 2004 – Dr. Taylor - page 89 / 153

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- Political legitimacy and social stability accomplished through negotiating trade agreements (CACM), direct government purchases, setting tariffs and quotas, control currency and reduce or suppress disaffection and political unrest.

- Suppression of disaffection and political unrest can be accomplished though several means [1] allocate state resources to alleviate the material hardship of agitating groups (often a co-opting strategy) [2] violence and terror (US foreign aid during Cold War was critically important in making direct repression feasible).

- In the context of the rising fiscal crisis that swept across the region as ISI opportunities were spent led to governments focusing [1]using [2] to quell the marginalized masses and worker organizations that could not be co-opted.

- Why couldn’t the fiscal crisis be resolved though taxing the propertied classes?

- So, what did they do?...

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