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close this bookThe Nutrition and Health Transition of Democratic Costa Rica (INFDC, 1995, 228 p.)
close this folder5. Socioeconomic factors for the understanding of health policy during the 1970s
View the document(introduction...)
View the documentIntroduction
View the documentRecognition of social demands and the regulation of the conflict during the 1930s and 1940s
View the documentThe social government in the new development strategy of Costa Rica during the 1950s and 1960s
View the documentThe consolidated social government
View the documentFinal reflections
View the documentAcknowledgement
View the documentReferences

The social government in the new development strategy of Costa Rica during the 1950s and 1960s

The growth of transnational businesses within the predominantly international strategies served as a framework for the development of the social government in Costa Rica. This government returned to the social intervention tradition of the 1930s and 1940s, but within the framework of national-level implementation following the development strategy previously mentioned. In doing so it favored the growth of transnational investments.

In 1948 a civil war took place in Costa Rica, which resulted in access to power of new social sectors and the establishment of a new development strategy. During the decades that followed, attention to social issues acquired a new dimension that led to the establishment of the social government. For this to happen, it was necessary to combine the antecedents related to the internal or specific situation and history of Costa Rica with the development strategy that was predominant at the international level. The former made it possible to effectively apply the latter, with outcomes that resemble more those found in developed than in developing countries.

As we have seen, these antecedents are the specific social measures that were taken during the 1930s and 1940s and that were further expanded and developed during the decades that followed. These antecedents included a government style that took into account several demands of the people it served, recognizing their organizations in order to maintain social harmony and avoid conflicts and discontent. Also, the government tried to minimize social conflict, giving priority to consensus building over repressive means. The development strategy required increased production, and this required substantial government participation that led to the establishment of the social government.

The social tradition, initiated in previous decades, was reemphasized in Costa Rica during the 1950s, but social actions were now linked to an economic policy oriented towards the growth of markets. This approach combined an interest in the creation of purchasing power of the population with improvement in health and education of the labor force and negotiation and regulation of social conflicts. Nevertheless, there was a tendency to discourage the development of autonomous popular organizations.

Production and Expanding Markets

From an economic point of view, measures were taken to favor increased production and productivity, the development of physical infrastructure and the training of workers and technicians, and the development of the internal market. This in turn resulted in an increase in employment and a concentration of production and wealth.

Increase in Production and Productivity

Costa Rica did not have the capacity to carry out the massive production characteristic of industrialized nations. However, the government stimulated the application of technology to agricultural and industrial production and paid a great deal of attention to increasing productivity. It was Josigueres (President of Costa Rica 1948-1949, 1953-1958, 1970-1974, and head of the National Liberation Party created in the 1950s by the sectors that won the 1948 civil war) who emphasized modern approaches to production and insisted on salary incentives that would motivate hard work and provide job satisfaction. These policies achieved the collaboration of different social classes (Sol 1992, p. 248). He stated:

"Study, technique, and science represent the only viable solution for the social problem. Low-cost production and efficient industries must use technical methods... The social reform must start in the coffee plantations with more production per area; in the corn fields with more tractors, better seeds, more fertilizer, and less manual labor; in industry with more electricity, better machinery, and more planning. The reform must consist of liberating man from rough work, to end the motor-man and replace him with the thinking man. Rough work debilitates and produces little. Technical work enhances and increases production. " (Hidalgo and Monge, 1991, p. 149)

As a result of this effort, an annual 6% to 7% increase in production was observed in the 1950s. Productivity per worker increased at an average annual rate of 5% between 1950 and 1970 (Reuben, 1982).

Development of Physical Infrastructure

As a way to the above effort, a series of institutions and sectors were created in the country to develop the infrastructure necessary for the enhancement of production and productivity. Some of the institutions created were the Electric Institute of Costa Rica for the production of electricity for industrial development, the National Water Service for the distribution of potable water and urban sewage disposal, the Atlantic Port Administration to manage the port system of the Atlantic, and the Pacific Electric Railways as an autonomous institution (Salazar, 1982). The Ministry of Public Works and Transportation, in charge of the building of bridges, highways, and rural roads, was reorganized.

These actions resulted in a substantial increase in physical infrastructure that favored the development of markets and production.

Development of the Internal Market

To provide an outlet for the increasing national and foreign production, the markets were expanded during the period under consideration. The process followed the Keynes's model of increasing aggregated demand to stimulate production. The measures to develop the internal market included the stimulation of production for the market as well as the creation of demand for the increased production.

The stimulation and protection of production for the internal market was reflected in the process of integration of Central America, which protects and stimulates an industry that serves the region. Fostering an increase in purchasing power as a stimulator of efficiency and an incentive for economic growth is promoted by the following argument:

"...everywhere, and particularly in Latin America, if there is no pressure to increase wages from either organized labor or progressive governments, nations tend to adopt inefficient working methods that only produce, through the labor of everybody, the well-being of a few." (Figueres, taken from Gamier et al., 1991, p. 26)

This approach resulted in increased internal market production, purchasing power, and quality of life. The expansion of the internal market can be seen from the 6% average annual growth between 1950 and 1970 (OFIPLAN, 1982, p. 46). The 70% in the middle class benefited the most, since their income participation increased from 48% to 60% between 1961 and 1971, at the same time as the 20% at the bottom end of the income scale moved from 6% to 5.4% and the top 10% moved from 46% to 34% (Vega, 1986, p. 364).

Other Complementary Measures in the Economic Arena

During the 1950s and 1960s, other complementary measures that also favored the development of productivity and the growth of internal markets were taken, including:

· The nationalization of the banks, which allowed government control of savings and loans. It guaranteed the implementation of the desired production approach within the new strategy.

· Training of workers and technicians mainly through the creation of the National Institute of Learning. This institute trained workers for industry, a process that was mainly stimulated through the incorporation of Costa Rica within the system of Central American integration in 1963. In fact, the Institute was founded in 1965 (Rovira, 1988, p. 110).

We should not believe that the measures taken to improve production (productivity) and markets prevented a process of concentration of wealth and an increased dependence on foreign investment. This was observed in the displacement of small coffee and sugarcane producers by their larger counterparts. Similarly, the contribution in terms of industrial production of small and medium-sized industries diminished and became increasingly controlled by the larger enterprises, including transnationals (see Paz, 1976; Izurieta, 1979).

In conclusion, beginning in the 1950s, the implementation of a new development strategy in Costa Rica required the intervention of the government to facilitate the expansion of production and productivity, physical infrastructure, markets, financing, and the training of the labor force.

Emergence of the Government and Social Policy

The government that was formed in Costa Rica beginning in the 1950s favored production and required an institutional development that would allow it to implement social activities in favor of the majority of the population. The social government, which meets the demands of the new development strategy, became a very complex system in Costa Rica by combining new demands with the social policies of the previous decades.

The government intervened to foster increased production and productivity, training of the labor force, adequate health conditions of workers, production in specific areas of interest, foreign investment, growth of internal markets, regulation of transactions among different social sectors, and a stable social environment that would allow growth while avoiding serious conflicts.

In addition to fostering production and market growth, the government also worked under a broad social policy that allowed it to buy internal production and to increase the purchasing power of large segments of the population.

The Expansion of Social Aspects in Government Actions

The social policy that began in the 1950s included the expansion of education at the elementary, high school, technical, and university level. It also involved the expansion of health coverage; the provision of electricity, water, and telephones; the regulation of markets involving basic products, the previously mentioned policy to increase real wages, the provision of housing, and land distribution. The government was able to achieve labor stability with both the private and public sector, the latter through the Civil Service regulations.

Two examples illustrate increased public investment during these decades. The CCSS expenditures increased from C11 to 23 million constant Costa Rican colones between 1950 and 1958 (Valverde et al. 1990). The second example is the number of social institutions that were created during this period: the National Production Council, which already existed but which became an autonomous institution; the National Fund for the Blind; the Costa Rican Institute of Electricity; the National Water System; the Land and Settlement Institute; the National Children's Hospital; the National Institute of Learning; and the National Rehabilitation Program.

As a result of this growth, the government had an increased demand for labor and became an important source of employment. In addition, the increased government participation stimulated the creation of new entities in the civil sectors (nonprofit organizations, cooperatives, etc.) that also fostered the quality of life and the general well-being of the population.

The Regulation of Conflict

In the field of social conflict, the policy launched in the 1950s was designed to favor organizations that worked closely with the government and to repress those that tended to operate independently of the government. The proposals of the National Liberation Party (PLN), which has governed the country since the civil conflict of 1948, include the search for harmony and solidarity among social classes that would always be guided by the entrepreneurs (Sol 1992). Figueres stated the need for the

"...substitution of the class struggle by harmonious and enthusiastic cooperation. Instead of war, peace; instead of struggle, solidarity; instead of hatred, love. This tendency is called solidarity." (Sol 1992, p. 255)

It is important to note that the search for this solidarity and harmony stimulated the development of popular organizations that were under the control of PEN without real power of decision.

With respect to unions, after the victory of 1948, the workers confederation was repressed and instead the Rerum Novarum was recognized. In the field of community development, in 1967 a law was approved that, as a result of the weakening of the Progressive Cooperatives, created the National Community Development Department (DINADECO). The societies for community development that were created as a result received financial support from the government and were also strengthened by "inducing or forcing other community organizations to adopt this model of development." (Valverde et al., 1989, p. 77). In the field of agriculture, the protests of the small producers were answered with the creation of cooperatives and the channeling of discontent through different entities such as the County Agricultural Committees (Valverde et al., p. 78).

On the other hand, social policy and all the apparatus that surrounded it institutionalized the demands, answered them individually, and fostered passivity and paternalism by developing an attitude in which the government had to solve the problems.

Nevertheless, there was a margin for negotiation that remained open due to the legal status of the Social Guarantees and the Labor Code. As a result, some entities were created to negotiate issues such as wages and prices. Some public institutions mediated labor disputes and conflicts between small- and large-scale producers. Therefore the legal framework existed for the discussion of agreements and collective conflicts involving the labor force mostly within the public sector. Within the private sector, due to strong repression, it was only in the banana industry that it was possible to develop union movements and collective agreements.

The Jump from the 1930s-1940s to the 1950s-1960s

The social policy that was developed beginning in the 1950s deviates from the policies developed during the previous decades in at least three respects.

First, during the decade of the 1940s there was not a clear correspondence between social and economic policy, since the former did not modify the fundamentals of the liberal economic policy. During the second half of the century, social policy became a complement of the economic policy that required an expansion of the internal market. This is how many of the activities that were performed by the government through its institutions favored production and entrepreneurs as well as low-income workers and consumers. Training programs, education, health, policies, etc. that favored workers also benefited enterprises that could recruit a healthy and alert labor force.

Second, the social policy of the 1940s was, on the one hand, a product of the government reform resulting mostly from the need to establish alliances with the popular movement which was then headed by the Communist Party. After the events of 1948, the Communist leaders were exiled or thrown into jail and the Communist Party became illegal. This meant a serious weakening of the autonomous popular movement and favored the birth of new organizations controlled by the government. Therefore, social policy had an important component of social conflict prevention and favored the development of nonautonomous popular organizations.

Third, policy coverage broadened during the second half of the century and benefited not only the wage earners but also a large middle class that grew and became stronger during these decades.

Fourth, the social policy that was initiated in the 1950s had more internal as well as external resources available. On the one hand, the abolishing of the army in 1949 meant the release of resources that could be used, among other things, for social expenditures. On the other hand, there was a greater availability of external resources for the development of infrastructure as well as for social programs.

In conclusion, the development of the social government in Costa Rica is the result of the needs of the new development strategy together with the historic antecedents of the country and a greater availability of resources. The development, as previously described, required the existence of expanding markets. The historic antecedents included a social policy already in the process of development and a government style that incorporated public needs and mechanisms of negotiation to avoid conflicts among different sectors of society. Finally, the greater availability of resources was the result of the dissolution of the army and foreign assistance through loans and donations.