Why do some countries progress while others seemingly so similar stagnate? What explains abrupt changes in the tack of countries? Why does adversity strengthen some countries and weaken other countries? Probing deeper, in this era of unprecedented movement of people, goods, and ideas, just what constitutes a country, a state, a nation?

These sweeping questions have been suggested to us by watching the evolution of the five countries of the Central American isthmus. In the 1980s, Nicaragua, El Salvador, and Guatemala were wrecked by civil war, unnerving Honduras and Costa Rica. The violence was deemed by many to be an...

In William Shakespeare’s playTwelfth Night or What You Will, Viola survives a shipwreck—“our ship did split.” Once washed ashore she asks, “What country, friends, is this? . . . Who governs here?” These two questions are timeless. The nation-state—the country—remains the locus of most important political decisions. And these decisions are made by governors, exercising control over the state.

The nation-state is the most consequential unit of analysis in politics. Politicians know this; readers of newspapers know it. Surprising, then, is the limp interest in individual nation-states by students of politics. Those in the academy who...

Over a tea in Princeton in the spring of 1942, the mathematician Paul Erdos introduced Peter Lax to Albert Einstein, saying he was a talented young Hungarian mathematician. Einstein turned to Erdos and asked, “Why mention Hungarian?”

Central Americans, on the other hand—and, indeed, all Latin Americans—readily identify themselves on the basis of their nationality. As a colleague at INCAE says, “Only poets and politicians speak of Latin America; all others in the region identify themselves on the basis of their nationality.” Salvadorans who migrate to the United States because they feel they have no opportunity—no hope—...

As a cluster of countries, Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica share, in addition to a geographical corner and a cultural affinity, a commitment to rule by liberalism. The locus of decision making may always be the nation-state, but at times powerful currents or forces lead political actors in different nations to make similar choices within a relatively compressed period of time. One such moment occurred in the 1980s, a period of sweeping change in Latin America. At the beginning of the decade, the majority of countries in the region were governed by authoritarian—military—regimes that pursued...

On the eve of the Nicaraguan Revolution, in 1979, the population of Central America was estimated to be 17.4 million. A quarter of a century later, in 2004, the population had doubled, to 35 million. The most pronounced change in the economy of the five Central American countries since the political turmoil of the 1980s is, in fact, just that the population has grown and thus so has economic activity. But there are other important changes. Economies are much more diverse. There is a greater and more complex integration into the world economy. There is, too, a new, previously unimagined...

Like everywhere else, billboards in Costa Rica come and go. At the beginning of 2005, there was a huge billboard greeting travelers on the Pan-American Highway as they approached the Pacific coast showing a pretty girl drinking milk; its patriotic caption read: “The milk of always . . . the milk of us, the Costa Ricans—Dos Pinos.” At the top of the billboard there was a Costa Rican flag and another patriotic pitch: “Proud to be 100 percent Costa Rican. International Quality.” Another billboard showed five photos of smiling individuals. The caption: “This is the national insurance company ....

Beginning in 1936, Nicaragua was effectively headed by General Anastasio Somoza and his family for more than four decades. In January 1951, his government requested the World Bank to send a general survey mission to the country to assist in spurring economic development. The World Bank complied, sending a special mission, which was stationed in Nicaragua from July 1951 to May 1952. The team conducted interviews, reviewed data, and had a firsthand look at the infrastructure of the country. The outlook was deemed promising. In addition to Nicaragua being the largest but least densely populated country in Central America, the...

In the 1950s and the 1960s, there was a flurry of thinking and writing in the academies of the United States, Canada, and Western Europe about how the poor countries of the world could catch up, develop, modernize. As European colonialism ended, many new countries were created, from mammoth India to archipelagos of tiny islands in the Caribbean like the Bahamas. These new countries had many evident needs. In response, there was a heady optimism, especially in United States academia, that the newly minted social sciences could guide a speedy transition from traditional society to modernity. A sense of urgency—...