The COVID-19 pandemic has fundamentally altered the global economic landscape with the
smallest and most vulnerable economies particularly hard hit. In the Northern Triangle
countries of El Salvador Guatemala and Honduras the crisis has cost lives and livelihoods.
It has impacted both the demand and supply sides of the economy posing difficult policy
tradeoffs. Risks to macroeconomic stability are now growing. Each country will likely exit the
crisis with an even greater need for reform. Escaping the Governance Trap: Economic Reform in
the Northern Triangle provides a framework for understanding the challenges of those three
Central American nations proposing that the lack of governing capacity in each country is a
crucial problem. This book argues that economic reforms can help the Northern Triangle
countries escape their governance traps and identifies priority areas of economic reform.
Sectors covered include fiscal policy monetary and exchange rate policy financial access and
deterrence and structural reforms. It also highlights the role that stakeholders like the
United States can play to help in these reform efforts and how those outcomes affect the
United States and the global community. All told Escaping the Governance Trap provides an
accessible direct account of the Northern Triangle's economic challenges and how to fix them.
