analysis, the results in the inflationary period are distorted. Also, the fact that the results indicate substantial increases in the values for Honduras would suggest these large increases were not attributable to the CACM integration.
Viewed superficially, the sharp decline in both net trade creation and output effects after the 1982 debt crisis, and the relatively good performance of Honduras, might be construed to imply that the members would have benefited by terminating the integration. However, given the severe impact of the worldwide recession, the debt crisis, and political strife in the area, such a generalization would be unfounded.
The analysis does seem to suggest that since the mid-seventies, the relative position of Costa Rica has improved dramatically. This is undoubtedly substantially due to the relative political stability in that country.
Based on the previous literature and the empirical study presented here, there is ample reason to believe that the CACM integration resulted in substantial welfare gains for its members. There is also reason to believe that the distribution of the gains was not balanced among members, and this failure can be attributed in large measure to the lack of an effective mechanism for promoting the development of the lesser developed countries.
The Cline and Delgado study's detail of disaggregation allowed a more accurate approach than is available to most researchers, and this gives their results a high degree of credibility. Even their approach would be hampered in analyzing the 1970s and 1980s, due to the obvious major changes in the world and regional economies, but by estimating trade in terms of physical quantities rather than the monetary trade values, their method would avoid the distortion described above.
Acknowledging its limitations, this study does support the results of the Cline and Delgado study that there were positive trade and output gains for the CACM measured as of 1970. Further, there is no evidence in the results to indicate the CACM members would have benefitted by increasing intraregional tariffs in the seventies, as suggested by Mendez and Rousslang. Such a policy would have exacerbated the growing inflation in the region, and would not have alleviated the problems caused by the economic shocks of the eighties.
There can be little doubt that the members of the CACM have developed faster than they would have without the integration. It may be questionable whether any further gains can be obtained by revitalizing the CACM, but as noted by Bulmer-Thomas, the failure of the CACM in the 1980s was primarily a failure of the region's import substitution policy to successfully move beyond the "easy" first stage. The future success of the region is probably more dependent on strategies which encourage industries that can compete on the international market, and to accomplish this will involve reducing external