In the pre-Columbian period the region was inhabited by several small and independent indigenous tribes. Christopher Columbus reached Costa Rica in 1502, at Puerto Limón on the Caribbean coast. Permanent European settlement was not consolidated until 60 years later when the indigenous tribes were suppressed. For the next 300 years Costa Rica remained a Spanish colony, but never played a significant role in the regional economy. Coffee and bananas were the principal cash crops. Most of the native Amerindian population did not survive, and the colony was too poor to import many African slaves. Spaniards were not attracted to the region because it lacked mineral deposits. In fact, when other areas of Central America were reorganized as intendencias of the Spanish Crown in the eighteenth century, Costa Rica remained under the control of Nicaragua.
The entire Central American region declared independence from Spain in 1821. However, the failure of this unified effort led Costa Rica to become an independent nation in 1838. A coffee-based economy helped development in the late nineteenth century. The construction of a railroad between Cartago and Puerto Limón encouraged the development of a banana-based economy in lands that were previously inaccessible.
In 1890, Costa Rica celebrated the first truly democratic elections in Central America. There has been a tradition of strong democratic institutions ever since. Religious tolerance was guaranteed and public education made mandatory. The growth of a national business sector and labor unions in the Caribbean region led to the development of progressive, socialist, and communist parties.
Economic ties with Germany and Italy affected Costa Rica negatively during World War II (1939–45), paving the road to power for a progressive alliance of liberals, communists, and Roman Catholics. Following the international trend of strategic alliances to defeat Germany, Costa Rica's president, Rafael Angel Calderón, forged an antifascist alliance that governed until 1949. However, the landed coffee-producing elite opposed Calderón and a brief civil war followed. The antigovernment forces, led by José Figueres Ferrer, were successful and a revolutionary junta took power. A 1949 constitution, set up by the victorious junta, abolished the army and established the present governmental system.
The president is elected to a four-year term and cannot be reelected for consecutive terms. The president, two vice presidents, the 57 members of the unicameral Asamblea Legislativa (Legislative Assembly), and 87 municipal authorities are all elected on the same day every four years, by universal adult suffrage. Costa Ricans are proud of their democratic traditions. The president becomes somewhat of a "lame duck" on the day of his election because the president cannot run for a second term; he depends on his cabinet to initiate legislation. Weak party discipline often means that majorities in the Legislative Assembly are hard to create and precarious. All budgetary matters must be passed by the legislature, which also appoints judges to the Supreme Court for eight-year terms. There are many autonomous governmental institutions that can ignore presidential authority. The result is that the Costa Rican presidency is a weak office compared to many in Latin America.
The major political party is the Partido de Liberación Nacional (PLN—National Liberation Party), which is descended from the groups which won the 1948 civil war. José "Pepe" Figueres founded the party, won the presidency three times, and is still revered. The party has traditionally promoted a strong welfare state, a leading economic role for the central government, and a managed economy. The size of the government has always increased under PLN administrations. However, pressure from the International Monetary Fund (IMF) has forced the PLN to adopt more free market features and to reduce the size of government.
The second major party, the Partido Unidad Social Cristiano (PUSC—Social Christian Unity Party), is descended from the defeated government coalitions of 1948, and from the followers of Rafael Calderón Guardia. The various anti-PLN groups formed a unity coalition, and created the PUSC in 1984. The party favors a free enterprise, market approach to economics, and a much-reduced bureaucracy and national budget. In the past, the PUSC has benefited from anti-PLN sentiment. In recent years political commentators have noted large areas of informal political agreement in national policies and priorities between these two leading parties.
Leading up to elections in 2002, the polls showed that the two parties were in a dead heat. Abel Pacheco from the Costa Rican ruling PUSC won 38.5% of the vote in the first round of balloting in February 2002, PLN candidate Rolando Araya, a chemical engineer, garnered 30.9%, and Partido Accion Cuidadana (PAC—Citizen Action Party) candidate Otton Solis, 26%. An estimated 30% of voters abstained from casting ballots in the first round. Pacheco prevailed in the second round held in April, the first time in the country's history that a runoff election was required.