~snip~
Long before political scientists began to talk of failed states, Honduras was known disparagingly as a "banana republic."
In the late 19th century, U.S. companies like United Fruit and Standard Fruit owned vast tracts of land and relied on the Honduran military to quell labor rebellions. The elites then formed the country's two major political parties in support of the fruit companies, cementing ties between Honduras' business and political interests, said Marvin Barahona, a historian at a Jesuit think tank in the capital.
With wealth concentrated in the hands of a few families, Honduras remained poor. Decades later, as U.S. aid poured into government coffers, many citizens complained that their country had been converted into Washington's client state, a base for the U.S. military and U.S.-backed Contras fighting the Sandinistas in neighboring Nicaragua.
Hondurans say corruption and crony politics have deprived state coffers of revenue thanks to politicians who enact laws to favor their own business interests.