IESET.
Hypotheses·growth·xiomara_castro_honduras_zede_repeal_economic_response_2022_2026

Honduras under Xiomara Castro repealed the ZEDE (Zonas de Empleo y Desarrollo Económico — charter-city / special-economic-zone) framework in April 2022, immediately after taking office.

The pre-registered claim tests two competing predictions: the libertarian-Próspera prediction that ZEDE-repeal triggers FDI collapse and arbitration-driven sovereign-credit cost increases (Próspera ICSID claim filed 2022, ~$11bn); and the heterodox prediction that ZEDE-repeal has minimal aggregate-FDI effect because the ZEDE FDI base was small (<0.5% of national FDI flows). The pre-registered test asks whether Honduras's FDI-share-of-GDP and sovereign-credit spread over 2022Q2-2026Q4 diverge negatively from a Central American peer pool (GTM, NIC excluded, CRI, PAN, DOM) by magnitudes inconsistent with the heterodox prediction.

PARTIALengine/runs/xiomara_castro_honduras_zede_repeal_economic_response_2022_2026

PARTIAL — mean_gap=-0.6805, |gap|/pre_sd=0.11, p_perm=0.667; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. mean_gap=-0.6805, |gap|/pre_sd=0.11, p_perm=0.667; claim direction ambiguous

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 6 country or place units from 2015 to 2026, using a synth did design.

what was measured
What changed
  • Zede repeal indicator
What we checked
  • Foreign investment inflow share income
  • Sovereign credit spread
  • Real income quarterly
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/xiomara_castro_honduras_zede_repeal_economic_response_2022_2026
1007550250201520212026HNDGTMCRIPANDOMSLV
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show fdi_inflow_share_gdp across 6 sampled countries over 2015–2026.
The shapes above are stylised — none of the lines are real data.
Placeholder for xiomara_castro_honduras_zede_repeal_economic_response_2022_2026. Published chart will be generated from engine/runs/xiomara_castro_honduras_zede_repeal_economic_response_2022_2026/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-04-30T10:15:33Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Honduras under Xiomara Castro repealed the ZEDE (Zonas de Empleo y Desarrollo Económico — charter-city / special-economic-zone) framework in April 2022, immediately after taking office. The pre-registered claim tests two competing predictions: the libertarian-Próspera prediction that ZEDE-repeal triggers FDI collapse and arbitration-driven sovereign-credit cost increases (Próspera ICSID claim filed 2022, ~$11bn); and the heterodox prediction that ZEDE-repeal has minimal aggregate-FDI effect because the ZEDE FDI base was small (<0.5% of national FDI flows). The pre-registered test asks whether Honduras's FDI-share-of-GDP and sovereign-credit spread over 2022Q2-2026Q4 diverge negatively from a Central American peer pool (GTM, NIC excluded, CRI, PAN, DOM) by magnitudes inconsistent with the heterodox prediction.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Symmetric-assessment classification: LIBERTARIAN-PREDICTION-SUPPORTED: synth_did CATT on fdi_inflow_share_gdp over 2022Q2- 2026Q4 < -1.0 pp annualised at p_perm < 0.10 AND CATT on sovereign credit spread > +75bp persistent at p_perm < 0.10. HETERODOX-PREDICTION-SUPPORTED: both CATTs are within ±1 SD of permutation-inference placebo distribution (no detectable divergence). MIXED: one channel supports libertarian prediction, the other does not. NOT-INFORMATIVE: permutation inference cannot distinguish at the 4-year horizon with a ~5-unit donor pool.

formal test & threshold
test:      synth_did_symmetric_zede_repeal_assessment
threshold: classification one of {libertarian_supported, heterodox_supported, mixed, not_informative}

Method

Template
synth_did
Clustering
country
Sample
6 countries · 2015 – 2026
Evidence type
causal

Primary: synth_did with HND treated from 2022Q2 and Central American peer pool. Secondary: event-study around April 2022 ZEDE-repeal vote and the Próspera ICSID claim filing (December 2022). Tertiary: symmetric-assessment classification per pre-registered thresholds.

Data

VariableSourceTransform
fdi_inflow_share_gdp
outcome
world_bank_wdi:BX.KLT.DINV.WD.GD.ZStier 2
unctad:Worldtier 2
level
sovereign_credit_spread
outcome
jp_morgan_embi:HNDtier 2
basis_points
real_gdp_quarterly
outcome
world_bank_wdi:NY.GDP.MKTP.KDtier 2
log_level_quarterly
gross_fixed_capital_formation_share
outcome
world_bank_wdi:NE.GDI.FTOT.ZStier 2
pct_of_gdp
zede_repeal_indicator
treatment
constructed:binary = 1 for HND from 2022-04-21 onwardtier 5
binary
us_policy_rate
control
fred:FEDFUNDStier 1
level
us_gdp_growth
control
fred:GDPC1tier 1
yoy_growth
remittance_share_gdp
control
world_bank_wdi:BX.TRF.PWKR.DT.GD.ZStier 2
level
commodity_terms_of_trade
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
log_change
wgi_rule_of_law
control
wgi:GOV_WGI_RL.ESTtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — xiomara_castro_honduras_zede_repeal_economic_response_2022_2026

Verdict: PARTIAL — mean_gap=-0.6805, |gap|/pre_sd=0.11, p_perm=0.667; claim direction ambiguous

Pre-registration

  • Claim: Honduras under Xiomara Castro repealed the ZEDE (Zonas de Empleo y Desarrollo Económico — charter-city / special-economic-zone) framework in April 2022, immediately after taking office. The pre-registered claim tests two competing predictions: the libertarian-Próspera prediction that ZEDE-repeal triggers FDI collapse and arbitration-driven sovereign-credit cost increases (Próspera ICSID claim filed 2022, ~$11bn); and the heterodox prediction that ZEDE-repeal has minimal aggregate-FDI effect because the ZEDE FDI base was small (<0.5% of national FDI flows). The pre-registered test asks whether Honduras's FDI-share-of-GDP and sovereign-credit spread over 2022Q2-2026Q4 diverge negatively from a Central American peer pool (GTM, NIC excluded, CRI, PAN, DOM) by magnitudes inconsistent with the heterodox prediction.
  • Falsification rule: Symmetric-assessment classification: LIBERTARIAN-PREDICTION-SUPPORTED: synth_did CATT on fdi_inflow_share_gdp over 2022Q2- 2026Q4 < -1.0 pp annualised at p_perm < 0.10 AND CATT on sovereign credit spread > +75bp persistent at p_perm < 0.10. HETERODOX-PREDICTION-SUPPORTED: both CATTs are within ±1 SD of permutation-inference placebo distribution (no detectable divergence). MIXED: one channel supports libertarian prediction, the other does not. NOT-INFORMATIVE: permutation inference cannot distinguish at the 4-year horizon with a ~5-unit donor pool.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: HND
  • event_year: 2022
  • n_donors: 5
  • donor_weights (top): {'CRI': 0.4767, 'SLV': 0.3307, 'PAN': 0.1926, 'GTM': 0.0, 'DOM': 0.0}
  • pre_rmse: 0.8645363607219834
  • pre_period_sd: 6.342036626465395
  • mean_post_gap: -0.6805431856941658
  • end_period_gap: -0.23932475657487595
  • post_period_years: [2022, 2026]
  • placebo_p_value: 0.6666666666666666
  • n_placebos: 5
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • imf:NGDP_R; world_bank_wdi:NY.GDP.MKTP.KD → real_gdp_quarterly (outcome, n=10914)
  • wgi:GOV_WGI_RL.EST → wgi_rule_of_law (controls, n=5322)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:33+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Symmetric-assessment test. The libertarian prediction (FDI collapse > 1pp/yr; spread widening > 75bp persistent) and the heterodox prediction (no detectable divergence) are both pre-registered with explicit thresholds. The hypothesis is one of policy-content measurement: whether the ZEDE repeal produced the catastrophic-investment-climate signal the Próspera-defenders forecast, or the no-effect signal the GoH defended.

Authored framework. Read the transparency note.