Throughout its history, Honduras has been an underdeveloped area. Its rugged topography and deficiency of good ports on the Pacific coast have combined to keep it comparatively isolated from the mainstream of social and economic development. The capital, Tegucigalpa, is located high in the central mountains, removed from the isthmus's main north-south transportation routes.

The rugged topography and semi-isolation have provided Honduras some advantages as well as disadvantages. Unlike the neighboring republics of El Salvador and Guatemala, Honduras did not produce a totally dominant landholding oligarchy. It also escaped the turmoil over transisthmian transit routes that plagued Nicaragua and Panama. Finally, Honduras, alone among Central America's republics, is not controlled by a single city. The isolation of the capital led to the rise of San Pedro Sula in the twentieth century as the nation's commercial and industrial center. Both a product and a victim of its past, in the mid-1990s, Honduras was striving to find some means of gaining the benefits of modernization while avoiding the violent conflicts that wracked its neighbors in the 1980s.