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The performance of social security contributory and tax-financed pensions in Central America, and the effects of the global crisis


  • This article is based on Sistemas de Pensiones en Centroamérica: Estudio Comparativo sobre la Capacidad de los Sistemas para Enfrentar la Crisis Actual y sus Posibles Efectos en los Principios Fundamentales de la Seguridad Social, San José, Programa Estado de la Región, 2011. The article summarizes that monograph, updates it to the end of 2010 and adds new information.

Carmelo Mesa-Lago, Distinguished Service Professor Emeritus of Economics and Latin American Studies, Department of Economics, 4529 Wesley Posvar Hall, University of Pittsburgh, Pittsburgh, PA 15260, United States; Email:


Over the last 30 years, Latin America has pioneered structural pension reforms. This article focuses on a representative regional sample of seven Central American countries with diverse levels of development (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) studying contributory and tax-financed pensions as well as recent pension reforms. It comparatively assesses system performance regarding five social security principles: unity; universal coverage; adequacy of benefits; equal treatment, solidarity and gender equality; and financial sustainability. It also evaluates the impact of the world crisis on these pension systems, highlighting the differences between public and private pensions, and extracts lessons and suggests policies for the future.