This is part of Reason's 2025 summer travel issue. Click here to read the rest of the issue.

Everyone knows about the McDonald's Happy Meal—a global icon, with its bright box, its golden arches, and a toy that keeps kids entertained long after the fries are gone. What most don't know is this worldwide sensation was born in Guatemala, a small Central American country more often associated with coffee, bananas, and (unfortunately) crime.

In the mid-1970s, Yolanda Fernández de Cofiño, who founded the first McDonald's in Guatemala, noticed that kids struggled to finish their meals. She created "Ronald's Menu," a kid-friendly meal that included a smaller hamburger, a little batch of fries, a drink, a sundae, and a toy she picked up from local markets. Her idea caught the attention of McDonald's corporate offices, and by 1979 it had evolved into the Happy Meal we know today.

It's remarkable that a product so central to McDonald's global empire had its beginnings in Guatemala. But it's not surprising. Beneath the headlines of corruption, violence, and poverty, the country pulses with entrepreneurial energy.

Walk through downtown Guatemala City, and you'll feel it. Vendors line the sidewalks, selling everything from shucos (Guatemalan hot dogs) to handcrafted jewelry—often just steps away from sleek shopping centers filled with local luxury brands. This is a country where people don't wait for permission or perfect conditions. They improvise, adapt, and build.

Visitors can see this spirit in action at places like the Mercado Central (the central market), where generations of merchants have set up shop in the city's historic center, or the Mercado de Artesanías La Aurora (the handcrafts market), where artisans from across the country sell handwoven textiles, ceramics, and leather goods. It's also alive in Cuatro Grados Norte, a once-neglected neighborhood now revived by artists, restauranters, and small businesses. And on Sundays, the city's Pasos y Pedales program transforms two of its main boulevards into lively pedestrian zones, buzzing with cyclists, food carts, and families browsing handmade goods.

"About 45 percent of adults are involved in some kind of entrepreneurial activity," explains David Casasola, director of research for the Global Entrepreneurship Monitor (GEM) at Universidad Francisco Marroquín (UFM). In 2023, Guatemala ranked second out of 45 countries participating in GEM's survey—the world's most comprehensive study on entrepreneurship, which includes economies from every region and income level—for the highest share of adults owning and managing a recently created business. It also held the third highest rate of female entrepreneurship.

This is partly shaped by necessity. Around 90 percent of Guatemalan entrepreneurs start their own businesses because formal job opportunities are scarce and strict labor regulations make it difficult to enter the formal work force, according to GEM.

"Guatemala has a serious problem generating employment opportunities," Casasola explains. "Many people can't access the job market because, first, it's a highly regulated market. The way hiring works is very strict….Second, for a formal job to be worthwhile to an employer, the worker needs a level of productivity that is often out of reach—mainly because of low-quality education, limited technical training, and industries that still lack the kind of structure needed to generate significant value."

Labor laws designed to protect workers—such as rigid termination rules, mandatory bonuses, and restrictions on part-time or freelance work—often end up discouraging hiring altogether. Starting a formal business isn't easy either, thanks to layers of bureaucracy and paperwork. Add rampant corruption, poor infrastructure, limited access to credit, and legal uncertainty, and it becomes clear why opportunity is often stifled.

Ironically, those very obstacles have pushed many into entrepreneurship. Faced with endless red tape in the formal markets, many Guatemalans turn to informal ventures. About 70.6 percent of early-stage ventures operate without registration, according to GEM. Those that survive and adapt to the challenging environment are the ones that eventually formalize. But whether formal or informal, a business is still a business—and the value these ventures add to society, from creating jobs to fostering innovation, is undeniable.

"This is a developing country burdened by countless obstacles," says Ramón Parellada, a board member of the Center for Economic and Social Studies (CEES). "People need more freedom to pursue entrepreneurship."

CEES was founded in 1959 by the entrepreneur and economist Manuel Ayau and others eager to understand why Guatemala was so poor. Their conclusion: economic barriers—not a lack of talent or effort—were holding the country back.

In 1971, Ayau went on to found UFM, a libertarian university dedicated to promoting free markets, individual liberty, and the rule of law. "The idea of creating a university that stood out from the rest wasn't driven by an interest in teaching just any subject—those can be taught anywhere," Parellada explains. "Instead, the focus was on teaching the principles that govern a society of free and responsible individuals."

At UFM, my alma mater, "Academic freedom led to other kinds of freedom," as George Gilder put it in Life After Google. Its graduates have been central to key economic reforms. One of the most notable examples took place in 1996, when a group of alumni helped privatize Guatemala's dysfunctional state-run phone system. Within a few years, Guatemala became one of the best-connected countries in Central America. Today, call centers are booming. "Sometimes thoughts become things," Alfredo Guzmán, who played a key role in the privatization effort, told Reason in 2011.

Guided by CEES' motto "for individual freedom to produce, consume, exchange, and serve without coercion of privileges," other key reforms have followed. These include deregulating foreign currency, allowing Guatemalans to conduct business in any currency, and securing greater autonomy for universities by separating them from state control. These changes have helped start the process of dismantling the barriers that keep so many Guatemalans in poverty.

One of UFM's current initiatives is the Kirzner Center for Entrepreneurship, named after the economist Israel Kirzner. His concept of "entrepreneurial discovery" describes how entrepreneurs identify and solve unmet needs, creating value in the process. The center applies this framework by helping Guatemalans turn ideas into businesses.

UFM has also pioneered a degree in entrepreneurship, encouraging students not just to build businesses, but to critically assess the policies that shape their success or failure. The goal isn't just profit; it's long-term, widespread prosperity.

Guatemala is an extraordinary country: home to ancient Mayan pyramids hidden in jungles, active volcanoes towering over vibrant cities, and 23 officially recognized languages. But perhaps its greatest untapped treasure is its entrepreneurial energy.

Guatemala faces serious structural challenges, many of them imposed by the state. But its people continue to find workarounds through informal markets and voluntary exchange. Whether it's inventing the Happy Meal or deregulating entire industries, Guatemalans aren't waiting for permission. They're building prosperity in spite of the system, not because of it.

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5-Day Historical Getaway in Guatemala

Day 1
Flight to Guatemala City

When you arrive, head to your hotel and drop off your luggage before exploring the city.

Stay in Guatemala City 
for three nights.

Standard hotel: La Inmaculada Hotel Upscale hotel: Hyatt Centric

Visit the Historic Center

Start your trip in Zone 1, the heart of Guatemala City. Wander through the central square, surrounded by such iconic landmarks as the Metropolitan Cathedral (Catedral Primada Metropolitana de Santiago), a blend of baroque and neoclassical architecture, and the National Palace of Culture, once the seat of government and now a museum.

Don't miss the Central Market, where you can find everything from textiles and handicrafts to fresh produce and street food.

Optional activity: Visit Guatemala's 100th McDonald's—known as "Mc100"—in Mixco's Zone 7. The flagship location features a distinctive architectural design as well as the largest McPlay area in Central America.

Grab a drink at El Portalito, one of the city's oldest bars, known for its live marimba music. For dinner, head to La Cocina de la Señora Pu, a cozy spot that recreates traditional Guatemalan flavors.

Day 2
Dive into Mayan Heritage

Explore Guatemala's historical roots at two of the country's best museums: Museo Popol Vuh, home to one of the world's most important collections of Mayan art, and the Ixchel Museum of Indigenous Textiles and Clothing, which showcases Guatemala's textile traditions. Both museums are located on the Universidad Francisco Marroquín campus, so take some time to enjoy the beautiful grounds and modern architecture.

For lunch or dinner, head to Zone 4, the city's creative district. It's packed with great dining options. A local favorite: Mercado 24, known for its creative take on Guatemalan ingredients.

Optional activities: Get shucos from a street vendor in Zone 4. No need to get out of your car—they'll come to you!

Day 3
Day trip to Antigua

Just an hour from the capital, Antigua is a UNESCO World Heritage Site famous for its cobblestone streets, pastel-colored colonial buildings, and unbeatable volcano views.

Walk through the Santa Catalina Arch, hike up to Cerro de la Cruz, and explore the city's many shops and markets. Grab lunch at Tartines for panoramic views of the cathedral from the rooftop. Enjoy a cocktail at Ulew, a speakeasy known for inventive drinks.

Day 4
Connect with Nature

Go on an adventure and hike one of Guatemala's volcanoes: Pacaya Volcano is a popular half-day hike, with a chance to witness volcanic activity and even roast marshmallows over geothermal vents. For a more challenging experience, try Acatenango, an overnight trek with incredible sunrise views of the erupting Fuego Volcano next door.

Optional activities: Fly to Tikal in the Petén region to visit the Mayan ruins in the jungle; visit Lake Atitlán, a highland lake surrounded by volcanoes and dotted with picturesque traditional villages.

Day 5
Flight home

Make a list of the things you didn't have time to see for your next visit!