Banana republic is a country that is politically unstable, dependent on limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and corrupt clique. The original concept was a very direct reference to a "servile dictatorship" which abetted (or directly supported in return for kickbacks (Political corruption#Kickbacks)) the exploitation of large-scale plantation agriculture (especially banana cultivation).

The term banana republic (wiktionary:banana republic) is a pejorative term first used by American (United States) author O. Henry in his 1904 book of linked short stories, Cabbages and Kings. The book is based on Henrys 1896-97 stay in Honduras, while hiding from federal authorities (Federal government of the United States) for embezzlement in the United States.