Weak foundations: the economy of El Salvador in the nineteenth century

Abstract

Hector Lindo-Fuentes provides the first in-depth economic history of El Salvador during the crucial decades of the nineteenth century. Before independence in 1821, the isolated territory that we now call El Salvador was a subdivision of the Captaincy General of Guatemala and had only 250,000 inhabitants. Both indigo production, the source of wealth for the country's tiny elite and its main link to the outside world, and subsistence agriculture, which engaged the majority of the population, involved the use of agricultural techniques that had not changed for two hundred years.By 1900, however, El Salvador's primary export was coffee, a crop that demanded relatively sophisticated agricultural techniques and the support of an elaborate internal finance and marketing network. The coffee planters came to control the state apparatus, writing laws that secured their access to land, imposing taxes that paid for a transportation network designed to service their plantations, building ports to expedite coffee exports, and establishing a banking system to finance the new crop. Weak Foundations shows how the parallel process of state-building and expansion of the coffee industry resulted in the formation of an oligarchy that was to rule El Salvador during the twentieth century. Historians and economists interested in the routes to underdevelopment followed by Latin American and other Third World countries will find this analysis thorough and provocative.

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