Democracy Adrift:Caudillo Politics in Nicaragua

INTRODUCTION

On April 13, 2004, Nicaraguan president

Enrique Bolaños suddenly appeared in

public to alert his countrymen that he

was in danger of being overthrown. A person

not given to grandiose gestures, the president

warned the nation that he would only leave the

office to which he had been democratically elected

as a cadaver. Bolaños did not name those plot-

ting his ouster but he did not need to—any

reasonably informed Nicaraguan knew by in-

stinct that he was referring to Arnoldo Alemán

and Daniel Ortega, and apparently not with-

out cause.

According to an intense wave of rumor

sweeping the capital, Managua, the two caudillos

of Nicaraguan politics were seriously discussing

the possibility of effecting a constitutional coup

against the elected president. The discussions

came to naught, but not before sending shock

waves through the government, the donor com-

munity and the media. Ortega and Alemán would

have used charges of “electoral crimes” revolv-

ing around the presence of stolen money alleg-

edly found in Bolaños’s 2001 campaign coffers

as a pretext to impeach Nicaragua’s elected leader.

What would have come afterward is murkier but

may have included the calling of a constituent

assembly to make radical changes to the power

setup of the country.

Had this eventuality come to pass, Nicaragua

would have been the sixth Latin American coun-

try in recent years to have witnessed the exit of

an elected president from office before the ex-

piry of his term. However, Nicaragua would havebeen a very different case from other recent over-throws. Whereas governments in other placeshave been felled by mobs of enraged citizens(Ecuador, Peru, Argentina, Bolivia) or at leastof opportunistic former soldiers (Haiti), in Nica-ragua the force propelling events would havebeen a political conspiracy by two ex-presidentsof the country and mortal enemies of one an-other. An additional curiosity of the momentwas that Alemán found himself in prison andnegotiating with one hand tied behind his back.Even more arcane were the fluctuating condi-tions of his confinement, which derived fromOrtega’s ability to manipulate Nicaragua’s judi-cial system at his whim.

The mini-crisis of early 2004 came at a dis-tinct moment in Nicaragua’s recent political evo-lution. During the preceding six months, as thetwo caudillos locked horns over the fate of con-victed ex-president Alemán, the chronic dysfunc-tion in the country’s political institutions grewacute. In the capital, Managua, the National As-sembly, bogged down in political wrangling, failedto pass more than a handful of ordinary legisla-tive bills. The Supreme Court of Justice con-ducted its annual election of officers in March,but only after a three-month impasse in whichthe high court did not sit. Meanwhile, the sup-posedly autonomous South Atlantic region con-tinued a two-year stint without any consensuallyaccepted government while drug traffickers ranrampant through its territory.

2 Democracy Adrift

WHAT HAPPENEDTO THE TRANSITION?

If the events of the previous eight years had notbeen sufficiently convincing, these episodes andthe trends behind them rammed home an obvi-ous conclusion. Fourteen years after the end ofthe Sandinista revolution and well after the “thirdwave” of world political change has crested, theconsolidation of democratic institutions in Nica-ragua is not occurring. Although it is now fash-ionable to dismiss such naïve notions, in the early1990s “consolidation” was the expected long-runoutcome of the wave of transitions from au-thoritarian rule that had recently sprouted inSouthern Europe, Eastern Europe, LatinAmerica and other parts of the world. And inthe mid-1990s, Nicaragua briefly appeared to bemaking progress in roughly the right direction.

By this date, however, it is increasingly recog-nized in academic and policy circles that mostof the more than 100 countries that embarkedon democratization starting in the 1980s are notconsolidating their “transition” to democracy.1

Indeed, serious question has been raised aboutthe whole analytical framework of “transitionstudies” and its adequacy as a guide for policy toassist democratic development. In this revision,many Latin American countries are coming tobe seen as what Thomas Carouthers of theCarnegie Endowment calls cases of “feckless plu-ralism,” a term which roughly denotes a stablestate of unconsolidated democracy in which par-ties routinely alternate in enjoying the spoils ofoffice without improving anything.2

Although feckless pluralism is one outcome,this report will argue it has not been Nicaragua’soutcome. Its fate is more disturbing, for it iscaught in a competition betweenauthoritarianisms desirous of moving the coun-try back toward rightwing or leftwing hegemony.Since 1990, these authoritarianisms have beenpersonified by two individuals: Arnoldo Alemánand Daniel Ortega, maximum leaders of the

country’s dominant political machines. In officefrom 1997-2002, Arnoldo Alemán showed astrong tendency to regress to the “dominantpower” system of traditional Liberal clientelism,and in all probability still wants to do so eventhough he is now a prisoner. While striving forpolitical and personal vindication, the eternalleader of the opposition, Daniel Ortega, es-pouses radical-democratic notions of politicsthat prefigure a drive to reassert Sandinista he-gemony in an outwardly democratic frameworkif he regains power.

Democracy, and president Enrique BolañosGeyer, seem hopelessly and helplessly caught inthe middle of this gigantic tussle. At the verybeginning of his administration, presidentBolaños outlined ambitious goals for the reformof Nicaragua’s institutions and of the archaicpolitical culture that underlies them. After nearlythree years in office, he has been able to realizenone of those objectives. His tangle has reachedthe point where, in the face of a possible over-throw of the country’s democratically electedleader in April 2004, Nicaraguan society barelyreacted—indeed, it did little more than yawn.

If it is relatively easy to demonstrate thatdemocratic development in Nicaragua is not oc-curring, it is difficult to pin down exactly whynot. The traditional political science of devel-oped countries harps on structural themes suchas high levels of poverty and inequality, back-ward political cultures, and the presence or ab-sence of specific historical sequences of politi-cal and state development in “explaining” whysome countries make it to developed democracywhile others do not. The United Nations Devel-opment Program (UNDP) has recently publishedan analysis that would supplant these genres ofexplanation with other structural variables,namely the loss of state capacity vis-à-vis themarket and the infringement of the effective sov-ereignty of the Latin American countries by theforces of neoliberalism and globalization.

Introduction 3

Alone, none of these approaches has provedto be compelling, leaving a cloud of explanatoryuncertainty. The only reasonably certain thing tobe said is that absolutely all of the forces hin-dering democratic consolidation apply to theNicaraguan case, most of them powerfully. Inan apt summation, Argentine scholar GuillermoO’Donnell, a leading political scientist for de-cades, concludes that a series of countries in LatinAmerica that include Nicaragua “function in waysthat current democratic theory has ill preparedus to understand.”3

The consequences of this consolidation-not-occurring have likewise long been blurred. While“feckless pluralist” politics as conceived byCarouthers can go puttering on without endan-gering a society’s viability, the destructive com-petition between Nicaragua’s paired caudillosappears to be growing more dangerous. Not onlyis it threatening to strangle such economic andsocial progress as Nicaragua has been able tomake over the last decade, but it may portend aserious threat to the nation’s safety and integra-tion in the long term.

It is even more difficult to gain a grip on whatto do about it. A multi-cornered entity knownas the “international donor community” has beentrying to assist the development of Western-styledemocracy in post-revolutionary Nicaragua fornearly 15 years. While such assistance has donesome good, it is not clearly turning the tide. Inthis respect, Nicaragua is not an exception toworld experience. After reviewing tons of evi-dence, the World Bank’s governance unit has re-cently cast serious doubt on whether most of

the work done to improve governance in devel-oping countries has helped much.4

However, the question emerging at presentgoes beyond this frame of inquiry. If democracyin Nicaragua is not consolidating, then where infact is the country heading? On the path to apossible answer to this query, one question thatneeds to be addressed is “what is Nicaragua?”With a modicum of sociological scrutiny, but-tressed by some historical reflection, Nicaraguaemerges as one of the world’s most singular coun-tries, and also as one of the more fragile.

This report thus begins by profilingNicaragua’s “national problem.” After that, itoffers its readers a review of Nicaragua’s politi-cal evolution since 1990 and briefly details theessentials of its fledgling democratic system. Itgoes on to portray the government in power,assessing its achievements and shortcomings, andthen profiles the government’s opponents. In itslatter sections, the document deals with the wayin which key institutions have functioned in re-cent years and chronicles the Bolañosadministration’s efforts to restart the democratictransition in Nicaragua by reforming them, ana-lyzing why these efforts have had little impact.

All this is a prelude to a final commentary onwhere Nicaragua may be heading. Is the countryrambling eternally through an endless transition,approaching a threshold over which democracywill begin to consolidate anew, or heading to-ward crisis and possible state failure? In this di-vided and highly unpredictable country, all threeof these futures would seem to be potential out-comes. Could there be others?

NICARAGUA’S NATIONAL PROBLEM

The foregoing introduction suggests that

fourteen years after the collapse of the

Sandinista revolution, when the country

began to navigate the “third wave” of change in

world politics, Nicaragua has witnessed little

progress in the consolidation of its recently in-

stalled democracy. Although it may be less obvi-

ous, Nicaragua also faces problems as a country

that threaten in the medium term to produce

serious difficulties for internal public order. In

the longer run, these same problems could con-

ceivably put its territorial integrity and even its

cohesion as a nation at risk.

Despite a chronic lack of consensus and oc-

casional fits of ungovernability, Nicaragua is not

currently a country in imminent danger of col-

lapse or of sinking to the level of a “failed state.”

This however does not rule out that serious prob-

lems may loom on the horizon of a somewhat

more distant future. The dangers that cloud the

country’s coming years are derived from a set of

national dilemmas made up of four essential el-

ements.

A POLITICALLY FRACTURED SOCIETY

Nicaraguan society suffers from a political fracture, thepattern of which is unique in the world. It began withthe 1979 revolution and has yet to heal. This fracturehas led a large part of its political class to display de-structive behavior that is rooted in an anachronistic pat-tern of political struggle anchored in past epochs of thenation’s history.

Following the overthrow of the Somoza dic-tatorship in 1979 and the electoral defeat suf-fered by the Sandinista National Liberation Front(FSLN) in 1990, Nicaraguan society has yet tocome to a basic consensus regarding the country’s“constitution” in the most elementary sense ofthe word. In a country in which three antagonis-tic political projects compete with one another

to prevail, the basic political actors do not agreeon fundamental values, on the appropriate fron-tiers between the state and the market, or evenon who legitimately owns what. Pious rhetoricaside, neither of the two main political partiesaccepts the rules of modern liberal democracy,and both in essence would like to turn the clockback to a glorious past long since relegated tothe history books.

While it is true that after fourteen years theformer combatants in a fratricidal war havelearned to coexist peacefully, the wounds openedby the revolutionary experience have not yet suf-ficiently healed. Society and the electorate con-tinue to be politically divided, with anti-Sandinista forces regularly winning national elec-tions by about fourteen points. The state mean-while remains not only institutionally fragmentedbut also “invertebrate,” as the forces of order—whether for better or worse is not clear—arestill not under the real control of the executivebranch.

Intertwined with and supported by a politicalculture marked by the historical continuity ofthe strongman phenomenon (caudillismo), this lackof fundamental agreement allows for and indeedgenerates highly anti-democratic conduct. Themost serious example of this behavior in recentyears was the pact reached between the Liberaland Sandinista caudillos in 2000, which has pro-pitiated the clientelistic colonization of certaininstitutional spaces within the state, distortingtheir functioning while the conflict between thepact-makers not only goes on unresolved but isbecoming more destructive.

In the context of a fragmented state, the po-litical struggle between these two forces has hin-dered creation of the necessary premises for theproper functioning of a market economy. It doesnot allow for the consolidation of the most ba-

Nicaragua’s National Problem 5

sic institutional practices—the rule of law, re-spect for contracts and the impartiality of legaldecisions—that are essential for the economy tofunction smoothly and propel vigorous growth.The rivalry has also hampered correction of thefaulty design of the political regime inheritedfrom the revolutionary period, which will inevi-tably form the foundation for the desired demo-cratic order of the future.

DEFICITS OF DEVELOPMENTAND SECURITY

There is a worrying gap between a slow rate of economicgrowth and concomitant social development in Nicara-gua and the accelerated pace of change in the interna-tional system (linked to the diverse facets of globaliza-tion), as well as in nature and the environment. Thisgap poses the prospect that it may be impossible for thecountry to emerge from the “poverty trap” on time, i.e.,before the negative forces of globalization, which includetransnational organized crime, draw Nicaragua into avortex of violence.

The United Nations does not classify Nicaraguaas a “least developed country” (LDC). However,the country shares most of the features used todefine this select group of nations.5 Its economy isin large measure anchored to the export of rawmaterials to markets that are not particularly dy-namic, although a certain diversification has takenplace into non-traditional agricultural products,export processing zones and tourism. Per capitaGDP, recently re-estimated at US$750 per year,makes Nicaragua the hemisphere’s second-poor-est country after Haiti.6 This view is reinforcedby data on agricultural yields and average levelsof labor productivity, which are possibly the low-est in Latin America.7 Taken as a whole, thesefigures define a vicious circle known as the “pov-erty trap,” in which a country is structurally in-capable of generating the public and private in-vestment resources necessary to overcome itsproblems and therefore depends massively uponinjections of foreign aid, capital and remittances.8

Between 1984 and 1993, as the result both ofan unviable model of revolutionary change inits economic and social structures and a bloodycivil war, Nicaragua saw its per capita nationalincome decline for ten consecutive years, a recordequaled by few other nations. Amidst this pros-tration a process of reverse change began thatpropelled the country on a forced march downthe path to a market economy. Together thesetwo processes—a socializing revolution (1979-1990) and an abrupt return to capitalism after1990— subjected Nicaragua to a rate of eco-nomic and social change experienced by few othercountries in the world in the short time span of25 years. A striking result of these vicissitudes isthat today some 69% of the population viewstheir country as in worse shape than it was whenthey were children.9

During the past nine years (1995-2003), Nica-ragua has returned to a path of slow and medio-cre economic growth. The real GDP growth ratehas been 4.2% annually; insufficient to more thandent the chronic underemployment that afflictsnearly half the work force.10 This sluggishnesscan be attributed in part to the structural weak-ness of the private sector, which does not investenough to promote faster growth, and to eco-nomic policies that are poorly adapted to thelocal setting. At heart, however, these weaknesseshave powerful roots in the lack of certain basicinstitutional premises needed to propel a morevigorous investment process. The revolutionundermined the already weak legal, judicial andproperty regimes inherited from the Somoza erawithout putting anything stable in their place.The efforts made in recent years to create thisinstitutional web anew have fallen short of theirgoals. Partly for this reason, the attraction of for-eign capital has been insufficient to bridge thegap left by weak national investment.

As the economy has grown, measurementssponsored by the World Bank between 1993 and2001 demonstrate that the country has moved

6 Democracy Adrift

slowly, albeit not in a clearly sustainable fashion,to overcome its very high levels of poverty. Thatthese encompass most of the population identi-fies Nicaragua as a country in which poverty isgeneralized and in which the absolute numberof poor people continues to grow. According tothe latest standard of living survey carried outby the Nicaraguan Statistics and Census Bureau(INEC), relative poverty as defined in terms ofunsatisfied basic needs dropped from 76.7% in1998 to 74.8% in 2001.11

These achievements are due in part to nationalefforts, but are also attributable to the copiousremittances sent by Nicaraguans living abroadand to generous flows of foreign aid, which makepossible high rates of public spending on in-vestment. According to some estimates, aid andremittances sum to $1,300m yearly, equal to nearlya third of GDP. The downward tendency of thepoverty index notwithstanding, certain key so-cial development indicators display a dangerousstagnation. According to the World Bank, illit-eracy and access to electricity have been virtuallyunchanged since 1993, while sanitation and ac-cess to drinking water have improved only mar-ginally.12 According to numerous experts on thematter, the likelihood of Nicaragua reachingmany of the Millennium Development Goals istherefore questionable.13

The challenges lying in wait. In sum, the fig-ures cited above indicate that even with very largevolumes of external resources to which most of thecountries poorer than Nicaragua do not have access, thecountry is not clearly emerging from the pov-erty trap as defined by the United Nations Con-ference on Trade and Development(UNCTAD).14 This reality posits the need toswiftly reach much higher rates of economicgrowth and implement more effective social poli-cies if employment and other deficits are to beovercome.

At the same time, Nicaragua as a society facesgrowing challenges and pressures emanating from

diverse quarters. A globalized system demandsits inclusion in the international regime of freetrade, of which the recently concluded US-Cen-tral America Free Trade Agreement (CAFTA)is an extension. Although they offer opportuni-ties, such agreements also demand speedy adap-tations difficult to achieve in countries whoseproductive structures are as obsolete and under-developed as those in Nicaragua, particularly ifrapid change has to occur amidst rules of thegame that fluctuate with the ups and downs ofdomestic politics.

The globalized system of production and dis-tribution has favored the development of cer-tain large nations of the former “third world”,while creating new obstacles to the developmentof countries, whose productive characteristicsresemble Nicaragua’s. Over the past twenty years,these countries have seen the national process-ing of their raw materials drop, accompanied bythe concomitant loss of value added in theireconomies.15 Meanwhile, the ways in which thesupply networks of world-scale traders operatemake it more difficult for an economy such asNicaragua’s to gain access to external markets athigher points on the value chain.16

As UNCTAD underscores, such situationsrequire new and stronger responses than everbefore on the part of government and the na-tional private sector. In particular, they requirethe formulation of a long-term national devel-opment strategy that propitiates high growthrates and serves as a reference frame for socialand sectoral development efforts such as the poli-cies normally included in poverty reduction(“PRSP”) packages.17 As will be seen further on,the Bolaños administration has put forth a strat-egy by which to do precisely that, without yetachieving consensus in the society at large aboutthe validity of its proposal.

Meanwhile, the forces of global disorder—international trafficking in drugs, arms andpeople, and the money laundering generated by

Nicaragua’s National Problem 7

these activities—have penetrated Nicaragua’sborders and institutions without a convincingstrategy having been put in place to combat them.For over ten years, Nicaragua has served as atransit route for a majority of the drugs arrivingin the United States from South America.18 Theinternal consumption of cocaine and crack isgrowing rapidly, alongside the social phenom-enon of youth gangs. The resources available forfighting these scourges are extremely scarce, andthe police force has but one officer per 700 in-habitants, half that of other countries in Cen-tral America.19

THE ETHNIC–REGIONAL PROBLEM

The Nicaraguan state faces a pressing problem of anethnic and regional nature. Its most worrisome expres-sion is the tendency toward “failed government” on theAtlantic Coast, government incapable of responding evenminimally to the demands of its citizens for services andsecurity, and which may be in danger of gradually devel-oping into a narco-government.

In 1987, the Nicaraguan government formallygranted autonomy to large territories inhabitedby a significant population of indigenous groupsand other ethnic minorities. In the Latin Ameri-can area, Nicaragua may be the country in whichthe autonomous territories encompass the larg-est percentage of the nation’s physical space, butis simultaneously the country in which the di-vorce between a theoretical grant of autonomyand the policies necessary to put it into practiceis most severe.

The stagnation in the development of Coastautonomy is rooted in material premises—anunviable regional economy and an acute budget-ary dependence upon the central government inManagua. Together these lead to a poverty trapeven harsher than on the Pacific side of the coun-try. Lacking the necessary resources to offer evenminimal services to the population, the regionalgovernments (and the central government by as-sociation) have fallen into discredit in the eyes

of the population, despite efforts made by for-eign cooperation to strengthen them.

Over a period of seventeen years, autonomousregional governments have not only failed to sinkfirm roots in society, but have become a tangleof disparate interests which passively presidesover the undermining of the Coast territoriesand indeed the entire country by the forces oforganized crime. The national political parties—the PLC and the FSLN—dominate regional poli-tics, subordinating or marginalizing the Coast’sautochthonous parties to the dictates of leadersin Managua. On more than one occasion, therivalries between or within the two major par-ties have left one or the other of the two au-tonomous regions (North or South) without afunctioning regional council for years at a time.20

Much as is the case at the national level, acuteproblems of corruption underlie these powerstruggles.

Although a law on the subject finally passedthe Assembly in December 2002, the demarca-tion of indigenous landholdings on the Coasthas yet to begin, and uncertainty regarding prop-erty rights is even more pronounced than in theremainder of the country. When added to thesilent invasion of mestizo colonists from thePacific who move in and claim the physical con-trol of land and forests, this impasse is nourish-ing the gradual development of separatist senti-ment in the North Atlantic Autonomous Re-gion (RAAN).21

Most dramatic at the moment, however, isgovernment’s evident incapacity at all levels—central, regional and local—to deal with theemerging problem of drug trafficking. Whiledrugs make their way to the most isolated com-munities, undermining the integrity of local cul-ture, those who traffic in the substances havesubjected the legal system to their designs andare in the process of corrupting the police insti-tution as well.22 Tentacles emanating from theseprocesses have already branched out to other

8 Democracy Adrift

parts of the country, leading to an emerging cri-sis in citizen safety.

THE DECLINE OF SOVEREIGNTY

Nicaragua has lost sovereignty, conceived as control overits own fate, due in part to objective economic dependencyand a concomitant political vulnerability, but also be-cause the country seems incapable of forging the mini-mum political will necessary to solve its problems.

When Violeta Barrios de Chamorro took overthe government on April 25, 1990, after her clear-cut electoral victory two months earlier, Nicara-gua was economically prostrate and on the vergeof collapse as a state. At that point, a veritableflock of international actors went quickly intomotion. Since that date, part of a remote pastfor the majority of the population, this many-sided entity has made enormous efforts, not al-ways coordinated and at times ill-conceived, tohelp rebuild a country whose foundations hadbeen severely fractured. Fourteen years later, at-tempts to introduce a market economy and a lib-eral democracy cannot be considered entirelysuccessful. Although this is not in itself a seri-ous problem, it is worrisome that these effortsmay dissipate over the medium term without thepieces of the country having finally put back to-gether in one way or another.

In the meantime, Nicaragua, a country ex-tremely dependent upon foreign aid, has becomethe prime example of a general Latin Americantrend toward loss of sovereign decision-makingpower over its own fate.23 In transit between asemi-centralized economy (misleadingly called a“mixed economy”) under the Sandinistas to arigorous market economy, the borders betweenthe state and the market have been redrawn inwhat is perhaps the most abrupt and radical man-ner in the entire region. Likewise, as the recentUNDP Report on Democracy in Latin Americapoints out, the political agenda of the fledglingdemocracy has been subtly restricted while theimplementation of Enhanced Structural Adjust-

ment Facilities (ESAFs) and the Poverty Reduc-tion Strategy Papers (PRSPs) is carried out.

In contradistinction to the analytical schemeput forth by the UNDP, this report argues thatlamentable though it may be, this situation isnot the key variable explaining Nicaragua’s na-tional problem. Instead, Nicaragua’s dilemmasare firmly anchored in the domestic politicalsphere and in specific problems, which will betreated in the later sections of this report. It isin the political sphere that an answer to a ques-tion that should be urgent for Nicaraguans mustbe found: how can this sovereignty be recovered?

In Nicaragua’s case such recovery faces a for-midable additional barrier—the regional powerof the United States, expressed since the end ofthe war in 1990 as the exercise of an episodictutelage over the political development of thecountry that has sought, above all else, to avoidthe return to power of the FSLN and itsstrongman Daniel Ortega. This geopolitical be-havior is another element that shapes Nicaragua’sproblems, and one that threatens to become moreconflictive in the future but simultaneously lesseffective.

Portents. At this point in history, amidst abrupteconomic changes and the sharp vicissitudes ofpolitics, the daily life of the average Nicaraguanhas become fragile in the extreme. The economicdata that most eloquently support this statementare wages—the US$75 a month made by a pri-mary schoolteacher and the US$100 earned by arecently graduated medical doctor working in apublic hospital or the young woman who ex-pends her energy in the exhausting work of amaquila garment factory. These figures are farlower than in any of the neighbouring countriesand place Nicaragua squarely in the world ofsevere underdevelopment.

Similarly troubling information, derived fromcreditworthy sources, is available regarding thestate of the spirit this fragility engenders. Ac-cording to the latest UNDP Human Develop-

Nicaragua’s National Problem 9

ment Report on Nicaragua (2002), almost twothirds of Nicaraguans (64%) feel that the settingin which they live their lives is basically unpre-dictable. Three-quarters (76%) mention that it issheer luck, rather than their own efforts, thatdetermines success or failure in life.24 In the opin-ion of analysts, these perceptions hinder manypeople from adequately planning their futuresor assuming a greater share of control over theirlives. Such data also suggest a high level of per-sonal precariousness, typical of countries inwhich the social fabric has been badly rent, thatcasts doubt upon the officially accepted figureof 45.8% as the most appropriate indicator ofthe percentage of people living in poverty inNicaragua.25

This precariousness is also evident in the situ-ation of Nicaragua’s young people, for whomthe need to create opportunities is extremely ur-gent. According to the most recent World Bankpoverty analysis, a full 25% of Nicaraguan youthbetween the ages of 15 and 24 years living in urbanareas neither work nor study.26 Taking into accountthat population growth continues at approxi-mately 2.4% annually (which again places Nica-ragua close to the LDC average), the countrywill clearly be harboring for a long time to comea large “youth bulge,” whose despair will onlyserve to increase the drug consumption and ju-venile delinquency that have flourished of late.27

Indeed, unofficial information on the growth ofjuvenile and organized crime suggest that in themedium and long term (five to ten years), Nica-ragua may face serious problems of public or-der if its rate of economic change and socialdevelopment fails to accelerate.28

However, the most disturbing fact of all isthat according to a survey held by the CentralAmerican University (UCA), 57% of Nicaraguanssaid that they would have preferred to be born in a coun-try other than Nicaragua.29 This pathetic figure re-veals a dangerous weakening if not of a senseof national belonging, at least of a sense of re-

sponsibility toward their country, a cultural de-terioration that it may be supposed is derivedfrom the violent vicissitudes of the past few de-cades of its history. It must be stressed that thissurvey took place among Nicaraguans living inthe country, and therefore does not include thehundreds of thousands of citizens who haveemigrated to the United States, Costa Rica andelsewhere.

The chilling sum of these weaknesses has aprofound political implication—the exercise offull democratic citizenship is a concept foreignto most Nicaraguans. The aftermath of the vi-cissitudes just mentioned is a society of “specta-tor citizens” who attentively but impotentlywatch the course taken by ever more frightfulsocial and political developments. Obviously, thisbehavior does not exempt them from responsi-bility, as every few years a large majority votes infavor of the two sterile political alternatives thatare responsible for the way things now stand.

IN SUMMATION

The end of the Nicaraguan revolution cameshortly after the fall of the Berlin wall and coin-cided in time—the year 1990—with the upswingof the modern era of globalization. From thatmoment onward, the country has tried to cometo grips with the challenges that the globaliza-tion process poses. It does so, however, danger-ously lacking a true national state capable ofmanaging both the “neo-liberal” economic poli-cies and the modern liberal democracy demandedby the international system. During these pastfourteen years, a fatal lack of political consensushas hampered and continues to hamper the ef-forts underway to create such a state, to such anextreme that outbursts of behavior have occurredthat verge on the depredation characteristic offailed states. The most lasting results have beensickly economic progress, chronic social crisis,and now the spectre of a wave of citizen insecu-rity, which accompanies the drug-traffickers’

10 Democracy Adrift

march across the national territory from the At-lantic.

In an effort to summarize the outcome ofthese different processes, former vice-presidentVirgilio Godoy once coined a mordant and lapi-dary phrase, stating that “Nicaragua is becom-ing just a place.” His words incisively sum uphow fragile the unity of a nation has becomethat has failed to organize and confront the glo-balization that envelops it. Although this situa-

tion is not fundamentally different from that fac-ing many other countries, what is different inNicaragua is the danger a returning to a clash ofsystems in which a weak social fabric, rewovenafter the disasters of the past, may again be rentasunder.

To understand how this might be possible re-quires a brief review of recent history, whichwill help to understand how Nicaragua hasreached its present political impasse.

The 25th anniversary of the Sandinista

Popular Revolution passed recently, of

fering a time to reflect on its legacy and

in particular its contribution to the development

of democracy. The FSLN’s claim to have fathered

this form of government by voluntarily relin-

quishing power after the 1990 election has al-

ways rung hollow. But the revolutionary experi-

ence did bequeath a better-educated populace

more conscious of its rights, a competent and

professional electoral body, and an adaptable con-

stitution whose philosophical underpinnings

were essentially liberal rather than socialist. Af-

ter February 25, 1990, when the Sandinistas un-

expectedly found they had been defeated by

Violeta Chamorro, these slender threads were

strong enough to help effect a peaceful turnover

of governmental power.30

Since then, however, Nicaragua’s unique po-

litical vicissitudes have confounded hopes that

the peaceful, electoral end of a socializing revo-

lution would initiate a long-term consolidation

of the multiple facets of democratic rule. Though

Nicaragua has since held two presidential elec-

tions, it is abundantly clear that much of the

remaining agenda of full democratization is now

at best stagnant and at worst in retreat.

A TOUR OF THE TRANSITION

At a superficial level, why democratic consoli-dation has made relatively little progress in Nica-ragua is simply explained. As successive electionshave shown, the basic divide in Nicaraguan poli-tics is not that between democrats andauthoritarians. The post-revolutionary era’s en-during cleavage has instead been betweenSandinistas and anti-Sandinistas, forces that longago congealed into competing authoritarianprojects led by caudillos who wish to turn theclock of history backward, albeit to differentepochs. In the middle, those sincerely pushingto consolidate democratic institutions and forgea political culture appropriate to supporting themhave been few and have so far proven incapableof organizing popular support for their efforts.

Why this has occurred goes to the heart ofwhat makes Nicaragua different from the rest ofthe world and gives the country the capacity tosurprise others with the unexpected twists andturns of its politics. As the histories of Mexicoand Bolivia in the 20th century attest, social revo-lutions in Latin America have not helped tospawn liberal democracies (except perhaps inextremely long time frames). The 11-yearSandinista revolution (1979-1990) in Nicaragua,a genuine social and economic convulsion which

A Tour of the Transition 11

had to fight against a US-financed counterrevo-lutionary war, is not an exception to the pattern.It was peculiar, however, in the manner of itsconclusion, or rather its lack of a firm conclu-sion.

A TRUNCATED REVOLUTION

The United States having proved unable to pushthem out of power using a proxy militarily force,Daniel Ortega and a part of the still youthfulSandinista leadership refused to believe that theirrevolution was over and done with. For nearly15 years, Ortega has quietly nurtured a beliefthat the revolution can come back the same wayit went out, i.e., through an election. Viewed com-paratively, this would seem a vain striving—inEastern Europe, no former Communist presi-dent has made a comeback through the ballotbox. But the FSLN’s ability to secure 40% of thevote in each new election since 1990—withoutchanging its name, leader or ideological funda-mentals—suggests that the Sandinistas might bean exception to world rules. Seen in this light,Violeta Chamorro’s rout of the FSLN may nothave been the decisive historical event that somepeople thought.

In the early 1990s, Ortega nurtured his beliefin a possible revolutionary resurgence in a defacto situation of dual power, something thatalso distinguished the aftermath of socialism inNicaragua from that in Eastern Europe.31 Notonly did the FSLN briefly retain control overthe forces of order–-a revolutionary army andpolice which have since become icons of theSandinista legacy—but exercised blocking powerin the National Assembly (legislature) and en-joyed major influence in the court system, theunions and media. Amidst the battles of the earlypost-revolution years, these power resources per-mitted Daniel Ortega to exert pressure (even“govern,” he once insisted) from below and ne-gotiate with the Chamorro government above,blunting the thrust of the counterrevolution,

which inevitably waits in the wings of every revo-lution that fails.

The new government succeeded in pushing areturn to a market economy, beginning a “struc-tural adjustment” that has since seemed to goon interminably. But using pressure in the streets,Ortega forced it to compromise on the issue ofreturning confiscated properties, which washandled through a series of “concertations” as-sisted by high-level negotiations behind thescenes (arreglos cupulares). De facto, these dealingsleft many properties in the hands of Ortega’ssupporters in the party though they made littleheadway in sorting out the legality of the titlesthey possessed.

Such backroom bargaining, though undemo-cratic and sorely lacking in transparency becameone of several keys to Nicaragua’s fragile post-war stability. Another was US pressure on theChamorro government to curb Sandinista partycontrol of the army and police; by 1995, suchpressure had helped oust the chiefs of both in-stitutions, eroding the situation of dual powerand stabilizing Mrs. Chamorro’s position.32 Thishelped to provide a minimum of order for capi-talism to function anew, but spelled tactical de-feat for Ortega, depriving him of key power re-sources for which he would later seek compen-sation in other arenas.

The democratically-elected government nev-ertheless spent its first three years balanced onthe knife edge of failure, facing opposition bothfrom the Sandinistas and from two forces un-happy with Mrs. Chamorro’s compromising withOrtega—politicians of the 14-party United Nica-raguan Opposition (UNO) coalition that hadbrought her to office, and rearmed peasants(“recontras”) of the Nicaraguan Resistance. Anassist from rearmed Sandinistas (called“recompas”) helped Mrs. Chamorro fight off thelatter’s periodic rebellions.33 But in retrospect, itis clear that the Chamorro government’s forcedtransactions sparked general popular dissatisfac-

12 Democracy Adrift

tion. Using unabashedly anti-Sandinista rheto-ric, Managua’s Liberal mayor Arnoldo Alemánadroitly captured this sentiment and turned it tohis advantage. By 1994, when the Liberal Con-stitutionalist Party triumphed in Atlantic Coastregional elections, Alemán was the rising star ofNicaraguan politics.

THE TRANSITION

Despite this inauspicious beginning, liberal de-mocracy managed to make some progress underMrs. Chamorro’s maternal gaze, if not alwayswith her blessing. The progress accelerated afterserial crises in 1993, which included mutualkidnappings of FSLN and UNO party leadersand brought the country to the brink of seriousdisorder. The “democratic transition” then ar-rived to resolve the country’s impasse. In late1993, the major legislative camps (UNO andFSLN) each underwent a split, leading to theemergence of a moderate cross-party majorityfavoring reform of the 1987 Sandinista consti-tution as the way of bringing political peace.34

When their efforts finally bore fruit in constitu-tional changes approved in 1995, the regimechange some observers thought they had dis-cerned in 1990 finally took place.

The important changes included a rebalanc-ing of the powers of state, which served to curbthe prerogatives of an overweening presidency.The National Assembly not only gained therights to approve tax legislation and internationaleconomic agreements, but also to suggest andvote on choices for magistrates of the SupremeCourt and other bodies of state, theoreticallybolstering their independence. Complementingthis overhaul was a prohibition on immediatere-election of the president and separation ofthe municipal elections from national voting. Fi-nally, the army, already separated de facto fromthe FSLN, was suitably nationalized, becomingsimply the “Army of Nicaragua.”

The reformers’ final salvo was a set of changes,some of them unfortunate, to the elections lawin January 1996.35 With this reform, the scaf-folding of liberal democracy bequeathed by therevolutionary constitution had been put on asounder footing. No sooner did this occur, how-ever, than the coalition of wills powering reformdispersed in the face of each player’s need toseek relegitimation in the 1996 elections, and thetransition came to an unnoticed close. Thechanges nevertheless furnished Nicaragua withan increment of political stability and nourishedhopes, soon to prove illusory, that the consoli-dation of democratic institutions would ensueas a natural consequence.

Regress Sets In. Unfortunately for this scenario,Arnoldo Alemán (with 51% of the vote) andDaniel Ortega (with 38%) dominated the 1996elections, crowding the reformers, who had splin-tered into a myriad of small parties, off the po-litical stage. At six years from an inconclusiverevolution, a majority of Nicaraguan voters em-braced Alemán’s truculent ranting against thestill-powerful Sandinistas, confirming that thecleavage that had expressed itself in the 1990balloting was still very deep. Their decision leftthe ongoing fate of democracy squarely in thehands of two people without any fundamentalcommitment to that form of government.

Once installed in power, Arnoldo Alemán,already stained by corruption accusations dur-ing his stint as mayor, allowed his authoritarianinstincts free reign. A master at clientelistic poli-tics, Alemán exercised iron control both of hisLiberal Constitutionalist Party and of the na-tional government, brooking no internal oppo-sition to his dictates in either arena.36 As timewent by, his methods of governing ran up againstthe limits of what could be considered tolerablein a democracy—Alemán threatened the press,extracted tithes from public employees, andbrought businessmen to heel with arbitrary tax

A Tour of the Transition 13

audits.37 He also began the quest for personalenrichment and economic empire that has ledhim to be catalogued as one of the ten mostcorrupt world leaders of recent times.38

Midway into his five-year reign (1997-2002),Alemán’s behavior had begun to call up uncom-fortable comparisons to the Somozas and sparkquestions about where the “transition” was lead-ing. While Alemán blithely ignored the multi-tude of corruption accusations flung by Comp-troller General Agustín Jarquín, a docile courtsystem declined to take action against him. Match-ing the Liberal president’s caudillistic style washis striving for long-term hegemony—he averredthat his PLC would rule for the next forty years.What democracy would look like at the end ofthat reign no one could quite imagine.

Alemán’s hair-raising aspiration posed a seri-ous problem above all for Daniel Ortega. Fac-ing an aggressive adversary, Ortega initially didwhat he had done to Violeta, challenging Alemánin April 1997 to a duel in the form of a wide-spread rural protest that was inconspicuouslyarmed. Though the military pledged its loyalty,the Liberal president was unwilling to risk quell-ing the revolt by force and capitulated. His ac-ceptance of defeat meant abandoning the pre-tension to take back the Sandinistas’ illicitly ac-quired properties and opened the door to newnegotiations that left the status quo, includingthe legal limbo in which many properties stood,intact.

TOWARD THE 2000 PACT

Along with this re-equilibration of forces,Alemán’s excesses paved the way for the nextunexpected twist in Nicaragua’s tortuous politi-cal course. As the leader eyed the eventual endof his five-year term, he recognized a need toprovide himself impunity for his misdeeds. Thislent him incentive to extend his clientelistic ten-tacles into other branches of state, where plac-ing party stalwarts in key positions could pro-

tect him from pesky accusations of wrongdoing.His need of Ortega’s collaboration to do thisgave the Sandinista leader an opportunity to for-tify his own base of power, which was then indecline

A shared interest in impunity between themaximum leaders of Nicaraguan politics becamethe driving force behind a momentous eventknown as the Liberal-Sandinista pact (called sim-ply “el pacto” by most Nicaraguans), which wassealed in January 2000 through a series of re-forms to the constitution and other laws. Afterexpanding the Supreme Court of Justice (CSJ),the Supreme Electoral Council (CSE) and theoffice of the Comptroller General of the Re-public (CGR), the pacting caudillos proceededto divide up the key positions in each arena ac-cording the their respective political weights. Asthis report will later detail, this deal created acorrupt “bipartisan” administration which domi-nated each of these institutions and denaturedits role—from the very outset the five newComptrollers proved their worth by covering forAlemán cronies, and when that was not enoughthe politicized court system let them off thehook.39

In addition to jointly colonizing institutions,the two leaders decidedly to radically truncatethe framework for political competition, creat-ing Law 331, the most restrictive election law inLatin America. This law introduced draconianrequirements for party registration and mainte-nance and politicized the operation of the Su-preme Electoral Council at all levels. WhileAlemán bet these arrangements would guaran-tee his supremacy indefinitely, Ortega believedthe new rules would force fractious small par-ties to fuse into a single bloc and split the anti-Sandinista vote, helping the FSLN to triumphwith a minority 40% vote share.

By the end of Alemán’s term, democracy’shorizon appeared ever more clouded. With cor-ruption rampant, foreign donors dismayed by

14 Democracy Adrift

the pact largely withdrew their assistance fromthe pacted institutions, preferring to invest inthe development of municipal government wherehopes for democratic progress could be keptalive. Municipal elections in November 2000, thefirst to be held independently, offered some en-couragement as the Conservative Party emergedwith 13% of the vote, briefly breaking the Lib-eral-Sandinista stranglehold over the electorate.

Who will Control the Pact? The pact met withoverwhelming public disapproval and was quicklyjudged as a threat to democracy. At the begin-ning, however, no one seems to have anticipatedhow conflictive the pacters’ administration oftheir agreement would become.

Early evidence that the pact was not an easydivision of spoils between two mafiosos came inAugust 2000. In that month, Alemán deliber-ately touched off a run against the Sandinista-controlled Interbank, and in November Ortegareplied torpedoing the Banco Nicaragüense, inwhich Alemán cronies held a large stake. Bothbanks eventually failed, an outcome that left thecontending leaders apparently unfazed.40 The2001 election became a second occasion for con-flict when pact representatives—vested as mag-istrates of the Supreme Electoral Council(CSE)—fought indecorously over control of theapparatus and barely brought the voting to apeaceful conclusion on November 4th.41 Theseepisodes suggested that the marriage of conve-nience between the Liberal and Sandinista lead-ers might not be lasting.

Instability notwithstanding, Alemán initiallyappeared to be turning the pact to his advan-tage. Once his term had concluded, having electeda handpicked successor and reinvented himselfas president of the National Assembly, the Lib-eral caudillo was riding high. By contrast,Ortega’s ambition to see a third force divide theanti-Sandinista vote to his benefit had been bit-terly frustrated. Then, in an irony of history,

Alemán’s miscalculation in the choice of EnriqueBolaños as his successor gave the Sandinistaleader a chance to turn the tables.

The anti-Sandinista majority in the electorateasserted itself with undiminished vigor in No-vember 2001, when the Liberal party candidatewon an easy 56-42% victory over Ortega. Oncein office, however, a supposedly docile presidentBolaños showed unexpected mettle and beganto pursue his benefactor on corruption chargesin order to gain space with which to govern. Hislegal offensive against Alemán gave Ortega anopportunity to wield his party’s influence in thecourt system to gain leverage over both hisarchrival and the new president. By September,2002, judge Juana Méndez, one of the FSLN’sjudicial handmaidens, had levied indictmentsagainst Alemán for fraud and money launder-ing, and concocted a potential accusation againstBolaños for “election crimes” related to the fi-nancing of his 2001 campaign.

As this report later describes, the succeedingtwo years have witnessed Ortega relentlessly ex-pand his quotas of power in Nicaragua’s dis-jointed institutions, bringing other figures ofNicaraguan politics under his sway. The engi-neering of Alemán’s deposition as National As-sembly head in September 2002 became the start-ing point for a process of power accumulationthat quickly encompassed the Supreme Court andthe Supreme Electoral Council, eventually cre-ating working majorities in both arenas for theFSLN. Success in these quests furthermore as-sisted Ortega in forging an accommodation withthe Catholic Church, a once-bitter enemy whichthe Sandinista leader is keen to neutralize beforethe next election.

By mid-2004, Ortega’s power-mongering hadreversed the balance of forces in a pact in whichthe FSLN was originally the junior partner. Pow-erfully assisting this achievement has beenOrtega’s manhandling of the judicial case againstAlemán, which since his arrest in December 2002

A Tour of the Transition 15

has seen the conditions of the former president’sconfinement wax and wane to pressure or in-duce him to negotiate. Both in the institutionalarenas affected by the pact and others like theNational Assembly, Ortega’s complex maneuver-ing and Alemán’s reactions to it have engenderedfurther instability. But they have left theSandinista leader poised to make his most seri-ous bid since 1990 to recover power.

IS THE TRANSITION DEAD?

As the discussion above argues, Nicaragua’sdemocratic transition was brief—an interlude ofless than three years in which a temporary coali-tion of political wills without strong roots insociety came together to propel positive politi-cal change. Once that coalition broke up, andthe dominant forces reasserted themselves in le-gitimate elections, a regression set in whose ef-fects have slowly become more pronounced andpernicious.

As is now patently obvious, Nicaragua’s po-litical institutions do not function as democratictheory suggests they should, and at times threaten

not to function at all. While a politicized judi-cial system hands down rulings that are ever moreinexplicable, and a frustrated president pondersemergency measures to reverse their effects, thetwo caudillos dicker behind the scenes over thecontinuing division of the spoils in a corruptedsystem and even over whether they will let thepresident go on governing. While all this occurs“above”, Nicaraguan society unfortunately lookson from below largely as a passive spectator.

This does not mean that all is lost. Demo-cratic practices are gradually taking root at thelocal level, exerting pressure on the system above,and a weak civil society is slowly gatheringstrength. But at the national level, a strange pat-tern of accommodation and deadly wranglingbetween opposing strongmen has brought demo-cratic consolidation to a halt. For it to start upagain, the impasses they have created for them-selves and for the country will somehow have tobe overcome. To begin to understand how thismight happen, some essential points about howNicaragua’s political system functions in the post-revolutionary era need to be taken into account.

Electoral democracy has now survived in

Nicaragua for fourteen years or for

twenty if one counts Daniel Ortega´s

election in 1984. In a hemisphere suffering a cri-

sis of representation in which political parties

are seen as largely discredited, Nicaragua more-

over sports a stable party system, although one

whose bipartisanship is artificial and often pain-

ful. Despite occasional harassment, freedom of

the press and media also prevails.

With these features entrenched, the popular

election of officeholders seems likely to continue

in some fashion. But a consolidated liberal de-

SYSTEM SNAPSHOT

mocracy requires that three other things developalongside elections. The first is institutional limi-tation of the exercise of power, operatingthrough the classic system of checks and bal-ances as well as internal controls over the ac-tions of officeholders. The second is subordina-tion of all actors’ behavior to a set of universal-istic legal rules (the “rule of law”), protectingthe rights of the citizenry from abuse. The thirdis citizen participation in the making of policy,through either individual petition or group pres-sure and lobbying. As this report will detail, atleast certain checks and balances have begun to

16 Democracy Adrift

run amok, potentially hindering effective gov-ernment, while the rule of law often appears tobe in chaos. Though it shows some promise,popular participation in policy-making is as yetweakly developed.

As in many third-wave countries, a bevy ofinternational democracy promoters has triedmightily to fill in Nicaragua’s institutional lacu-nae and help civil society learn to exert pressureand lobby. Soon after 1990, in fact, the countrybecame a major world site for “institutionalmodeling.” This process assumes that once pre-existing institutions are rearranged to fit a stan-dard mold, their ongoing operation will habitu-ate those working within them to democraticnorms and practices, producing a political cul-ture to support democracy in case one did notalready exist.42

In effect, the “transition paradigm” assumedthat political elites would learn democracy bypracticing it. This can only occur, however, ifelites are interested in the apprenticeship. TheChamorro administration contained some sin-cere democrats (notable the president herself),but they were outweighed by opportunisticjobseekers and confiscated property owners de-manding redress of grievances. Daniel OrtegaSaavedra, leader of the FSLN, has consistentlytold the world that he is not a liberal democratand means what he says. For his part, ArnoldoAlemán aspires to lifelong tropical satrapy, a wayof managing public affairs that has had disas-trous consequences for democracy all over theworld.

In addition to the drives of the principal ac-tors, the actual functioning of democracy inNicaragua reflects the underlying political cul-ture and the extant institutional rules. A briefexamination of these topics sheds light on howcaudillistic politicians exert their power in Nica-raguan politics, but also reveals certain counter-weights to their power as well as the emergenceof promising countervailing tendencies.

POLITICAL CULTURE

Nicaraguan political culture on balance supportsbut accords declining legitimacy to theclientelistic exercise of power by elites, whosepolitical attitudes may differ significantly fromthose of the mass of the population.

Political culture in Nicaragua was shaped firstby the typical Latin American colonial experi-ence, whose innate patrimonialism left behinddisrespect for the law and a penchant for treat-ing public office like private property.43 An in-dependent history marked by civil strife and pe-riodic foreign intervention reinforced a tendencyto strongman rule (caudillismo), which found ex-pression in long periods of Liberal dictatorship,first under José Santos Zelaya (1893-1909) andthen the Somozas (1936-1979).44 An exceptionto this pattern was the Conservative Republic(1858-1893), a period of stable oligarchic democ-racy that stands out as an oasis of peace andconsiderable material progress.45

Given this history, traditional readings of po-litical culture tend to characterize Nicaraguanelites as authoritarian (caudillistic) and person-alist-clientelist, with behavior strongly rooted ina familistic matrix of values.46 Caudillistic rul-ers exert iron control over their respective forces,rewarding the unconditional loyalty of subalternleaders by allowing them to breach the law totheir own benefit. Along with this basic pattern,it is argued, goes scant respect in the dominantelites for democratic norms, a zero-sum view ofpolitics and permissive attitude toward the useof violence to achieve political ends. Such po-litical proclivities in the elites help little to con-solidate democracy and do a great deal to fo-ment corruption.

Analysts who have examined post-1990 pat-terns argue, however, that mass political culturediffers from the elite pattern. The ordinary citi-zen thus displays overall support for democraticrules, shows a basic tolerance for the rights ofothers, and disapproves of violence as a means

System Snapshot 17

to influence political outcomes.47 Nicaraguans’strong support of democracy-in-the-abstractobviously reflects the experience of having livedsequentially under two systems that contradictedthis norm in different ways. Mass political cul-ture has also probably ceased to be a culture inwhich clientelism and corruption are generallyaccepted as norms, although in practice there isa great deal of acquiescence to both. The gradualimpact of urbanization and secularization, it isargued, helps explains this change away from tra-ditional patterns.48

The latter findings, though encouraging, arequalified by Nicaraguans’ low feelings of politi-cal efficacy. Ordinary people strongly disapproveof the way in which most political institutionsfunction but feel they can do little to correctthings. Nicaraguans exhibit one of the highestrates of voter turnout in Latin America, but theirnon-electoral participation in politics is quite lowand limited mostly to local-level petitioning andassemblies.49 Still sizable illiteracy, an extremelyhigh level of interpersonal distrust, and a strongpost-revolutionary disillusionment with politicsall contribute to this passivity. People once fa-mous for their political combativity, Nicaraguanstoday are inordinately difficult to mobilize forpurposes of political protest.

INSTITUTIONAL FLAWS

In the absence of strong commitment to demo-cratic norms among elites, the best-designed sys-tem of institutions cannot guarantee the function-ing of democracy. In Nicaragua, political-culturalproclivities interact with key institutional arrange-ments to perpetuate the clientelistic exercise ofpower by the dominant power-holders. Other ar-rangements, however, place some bounds on arbi-trary power-wielding by the same actors, assuring aminimum of stability. A third set inhibits, but doesnot altogether prevent, the growth of popular par-ticipation at sites where that participation is vital toconsolidating a democratic political culture.

Poor Representation for the Voters. The mostserious institutional failing of Nicaraguan de-mocracy is the use of a restrictive variety of pro-portional representation in the election of legis-lative deputies. In a system that has been in placesince the days of Zelaya, Nicaraguans vote inthe departments where they reside not for indi-vidual lawmakers but for closed lists of deputieswho have been chosen by party leaders and notby the populace.50 Such legislators are and feelbeholden to the party caudillos rather than tothe voters, with whom they cultivate only spo-radic ties. Although this setup produces exem-plary party discipline in the Assembly, where thedeputies mostly do their leaders’ bidding, it gen-erates only the most rudimentary sort of ac-countability to the public.51 National politicalleaders also choose most local mayoral candi-dates undemocratically, though a countertrendto this practice has begun to make itself felt.

Law 331, the Electoral Law as reformed bythe pact, limited the prospects for effective rep-resentation even further. The reform imposeddraconian requirements for the registration ofpolitical parties and candidates as well as the for-mation of alliances in elections. Though someof its provisions were struck down in Novem-ber 2002 by the Supreme Court, most are stillon the books, impeding the creation of newgroupings and easing the way for the Council todisband those that fail to win a 4% vote share ateach election. In addition, the reform outlawedindependent, non-partisan (“popular subscrip-tion”) candidacies for mayor, a device which hadbriefly offered an alternative to big-party domi-nance of local politics.

Clientelistic Colonizing of the Powers. The1995 constitutional amendments divided poweramong the principal branches of government inNicaragua in reasonably balanced fashion. Toensure adequate equilibrium, the reforms grantedthe National Assembly the right to propose thetop-level personnel of state bodies such the Su-

18 Democracy Adrift

preme Electoral Council, the Supreme Court ofJustice, and the Comptroller General, althoughthis power is shared with the president and civilsociety is to be consulted. Those promoting thereforms took advantage of the opening to placesupporters in these institutions in 1995 and 1996,with a mixture of positive and negative results.But when the Liberal-Sandinista pact material-ized in 2000, the new constitutional rules per-mitted leaders of the PLC and FSLN to placeparty stalwarts willing to do their bidding in thesesame settings. In this way, the pact colonized andfurther politicized the three institutions men-tioned above, later affecting the Public Ministry(attorney general) and the Office of the HumanRights Procurator (ombudsman) as well.

In addition to vitiating the institutions them-selves, the operation of the pact has more re-cently begun to alter the boundaries betweenthem in disturbing ways. One tendency is for thelegislative branch to cannibalize the executive,transferring parts of the central government tothe “pacted” sector. In June 2004, the PLC andFSLN thus announced they would fuseNicaragua’s public utilities regulatory agenciesinto an omnibus superintendency whose direc-tors would be named by the National Assemblyrather than by the president.52 They were soonsignaling that they would strip control of thesocial security administration from the execu-tive as well. A second tendency has seen the ju-dicial branch invade the sphere of the legisla-ture. In a move denounced by some as “judicialdictatorship,” the Supreme Court ruled in May2004 that parties may seek injunctions (amparos)against draft laws that are in the process of for-mation in the Assembly. As the court typicallytakes months or even years to process one amparo,this invitation to obstruction could potentiallyparalyze the legislative process.53

Independent Forces of Order. In contrast toother institutions, Nicaragua’s military and po-lice forces, both products of the revolutionary

era, have resisted co-optation by either of thetwo caudillos, but control by the central govern-ment as well. Under Gen. Humberto Ortega, theSandinista Army began to evolve away from partycontrol even before the revolution’s end, and theprocess was complete by the time Gen. JoaquínCuadra took over the reigns in 1995.54 WhenAlemán attempted to float his own candidate asCuadra’s successor in 2000, the institution sharplyrebuffed his interference.55 The legal underpin-ning for this independence, a Military Codepassed in 1994, requires that civilian presidentsname successive army commanders from a listof candidates proposed by a 52-member assem-blage of top-ranking officers known as the Mili-tary Council.

In light of how Ortega and Alemán have ruledin the past, and might rule again, many Nicara-guans regard the military’s independence fromcivilian control as a necessary evil at the currentstage in the country’s incipient democracy.56 Thelast two army leaders have hewn closely to thissentiment, posing as guarantors of the constitu-tion while steadfastly refusing to be drawn intothe squabbles of the politicians. A drawback tothis state of affairs is that the army largely runsthe country’s foreign military policy on its own.Not only has this allegedly fomented corruption,but also the civilian government has proven pow-erless to intervene in cases such as a bogus armsdeal to Panama in 2002 in which the militarywas under suspicion for participating in illicittrafficking.57

The National Police enjoys less solid legalbacking for its de facto autonomy, and Alemánsuccessfully placed current police chief EdwinCordero in his post in 2001. Though more effec-tive than other Central American police forcesin controlling ordinary crime, the institution hasclung to a self-image as a non-repressive revolu-tionary force as a way of resisting executive de-mands to impose order over violent protests suchas the perennial “battle of the 6%.”58 The

System Snapshot 19

Bolaños government’s unwillingness to test thelimits of this resistance has undermined its au-thority and has inhibited reforms that are ur-gently needed to clamp down on what is believedto be significant police complicity in drug traf-ficking.

Excessive Centralization. Nicaragua’s consti-tution and laws provide autonomy both for themunicipalities and the regions of the AtlanticCoast. In principle, these dispositions open spacefor local-level participation in politics, a trendwhich foreign donors have been keen to encour-age as a counterweight to the power of thecaudillos. However, under the last four presiden-tial administrations (including that of DanielOrtega from 1984-1990), effective autonomy hasbeen held back by the unwillingness of the cen-tral government to provide financially strappedsubnational governments with needed resources.

Approved in 1987, an Autonomy Statute al-lows the Atlantic Coast, which contains about12% of the country’s population, wide discre-tion in the management of its own affairs. Butas the governments in Managua have been si-lently hostile to this autonomy, they have typi-cally used central budget support as a lever toexert de facto control over the regional authori-ties while dragging their feet on proposals todraft specifying regulations for the Statute. Nu-merous gray areas in which the division of pow-ers and responsibilities between the central andregional governments, and between the latter andthe Coast municipalities, long remained unclearhave seriously hindered the development ofCoast institutions.59 Regulations for the Statutefinally passed the National Assembly in July 2003,but only because the dominant parties wished toembarrass the Bolaños government, which wasunable to block them and which has since letthem lie.

Passed in 1988, a basic municipalities law (Law40) similarly furnished the central governmentwith de facto powers to curb municipal-level

spending. The 1995 amendments to the consti-tution removed these shackles and mandated thedirect election of mayors, who had previouslybeen selected by the municipal councils.60 But itwas only in the late 1990s that local governmentsbegan to receive meager dispensations from thenational budget. And it was only in 2003 thatthe Bolaños administration finally promoted alaw providing for a staggered transfer of up to10% of the national budget to the municipali-ties.

Despite this obstruction, regional and munici-pal government in Nicaragua is undergoing anumber of positive changes. Intent on forgingdecentralization, foreign cooperation has slowlyhelped to strengthen subnational units by build-ing local planning and management capacities,fomenting greater transparency, and involvingcommunities in the identification of investmentpriorities.61 These gains will likely intensify withthe coming decentralization of budgetary re-sources and responsibilities, coupled with effortsto spur greater citizen participation. In addition,the holding of separate municipal elections be-ginning in 2000 has set in motion a positive dy-namic that promotes a certain degree of inde-pendence from national party dictates on the partof local political actors, who must recruit po-table candidates to run in elections without ben-efit of their leaders´ coattails.62

SYSTEM PERFORMANCE IN NUMBERS

The foregoing suggests that Nicaraguan democ-racy suffers from restrictive electoral rules, theclientelistic distortion of institutional checks andbalances, insufficient control over the forces oforder, and an excessive centralism that constrainsthe development of popular participation. It isuseful to ask how the performance of this sys-tem stacks up in comparison with other coun-tries in Latin America and other world areas.

Among the international institutions, theWorld Bank has argued most forcefully that “gov-

20 Democracy Adrift

ernance matters” for theeconomic developmentof nations.63 The Bankhas marshaled evidenceto suggest that positiveincrements on the sixgovernance dimensionslisted in the table belowproduce massive re-wards in terms of sus-tained economicprogress. To generate itsdata, it has developed an elaborate method forsurveying governance and applied it to 175 coun-tries, including Nicaragua.

Nicaragua does not come out well in the com-parison. Measured over the period 1996-2002,which spanned three presidential administrations,its ratings on all dimensions except stability fellwell below Latin American and Caribbean aver-ages, to say nothing of developed country stan-dards. More worrisome, on key variables such asgovernmental effectiveness, the rule of law andcorruption control, it mimicked the values scoredby the countries of Sub-Saharan Africa. It isnoteworthy that ratings for the rule of law andcorruption control both fell significantly duringthe Alemán years (1998 and 2000), then re-bounded under Bolaños (2002). More signifi-cantly, even after this rebound Nicaragua has along way to go in key areas to match the notvery robust averages of a region, Latin America,whose deficits in democratic performance incomparison with more developed world areasare well known.

System Support as Measured in Surveys. Ifafter fourteen years the democratic system func-tions this badly, how much support do Nicara-guans accord it? The most recent Latinobarómetrosurvey found opinions on this score to be virtu-ally schizophrenic.65 Asked in mid-2004 to re-spond to the assertion “democracy may have itsfaults, but is better than any other system,” 70%

World Bank Governance Measures64

1996 1998 2000 2002 LA AfricanAvge. Avge

Voice and accountability 43.5 54.5 48.2 52.0 60.5 33.0Political stability 23.2 40.0 52.7 47.6 51.3 38.8Effective government 34.1 27.3 25.0 17.5 49.8 31.5Regulatory quality 36.5 64.1 61.1 39.7 60.0 32.8Rule of law 25.9 20.0 15.7 32.0 50.3 32.5Corruption control 52.7 25.7 17.4 39.7 50.8 32.5

of Nicaraguans polled replied in the affirmative.However, over the years the same survey has alsoasked whether Nicaraguans agree that “democ-racy is preferable to any another form of gov-ernment,” obtaining the following fluctuatingpercentages in their answers:

The table indicates strongly that Nicaraguans’faith in democracy is at some level significantlyinfluenced by the immediate vicissitudes of poli-tics. This is not surprising in a fledgling democ-racy. But the sharp downward trend—59% to39% in eight years, registered across sizable fluc-tuations—is highly disturbing, and is the largestsuch percentage change found in the 18 coun-tries surveyed. When pollsters ask about mili-tary or authoritarian alternatives to democracy,responses are similarly incongruous. In anothercommon finding, 70% of Nicaraguans staunchlyinsist they would never support a military gov-ernment. But the very same percentage, 70%, in-dicates that they would acquiesce to such a re-gime if it managed to resolve their economicproblems.

All in all, these findings suggest that supportfor the democratic system in Nicaragua is sig-nificantly more precarious than it at first appears.Democracy doubtless has a reserve of supportrooted in historical memories of privation and

1996 1997 1998 2000 2001 2002 2003 2004

59 68 72 64 43 63 51 39

System Snapshot 21

abuse under prior regimes. But social and eco-nomic vulnerabilities, experienced by a largemajority of the people, appear to be attenuatingsystem support.66

Confidence in Particular Institutions. Poll-sters have long queried Nicaraguans as well abouttheir faith in an array of institutions. A recentand typical ranking is that in the table below. Itshows that Nicaraguans express highest confi-dence in their churches, a noteworthy fact in viewof the distinct politicization of the Catholic hi-erarchy in recent decades. The news media havelikewise earned strong backing for their role indenouncing corruption as well as in exposingsocial and human rights abuses. Though moretepid, confidence in the military is basically posi-tive and probably owes to the army leadership’scapacity to avoid the appearance of overt inter-ference in the political affairs of the country.

The most telling result of the survey, as inothers done in recent years, is the very low con-fidence expressed in institutions targeted by theLiberal-Sandinista pact, in particular the judiciaryand the elections council. Faring even worse arethe political parties and the National Assembly,for which popular opprobrium is by now almostuniversal. Although a solid basis of statisticalcomparison is lacking, the operation of the pacthas arguably undermined public confidence in

the very actors that promoted it and the institu-tions it has distorted.

IS DEMOCRACY FLOUNDERING?

The preceding review indicates that democracyin Nicaragua has relatively weak roots and foun-dations. In addition to the motivating force ofentrenched poverty and its concomitant—pub-lic office seeking for purposes of personal en-richment—the cultural base of a traditional LatinAmerican society still provides significant sup-port for old-fashioned political clientele-build-ing. Flaws in the way the system is designed helpclientelistic power seeking to spread, albeit notwithout limit. Add in the inherited fragmenta-tion in institutions and the system both func-tions badly in promoting economic progress, so-cial justice and human rights, and seen to func-tion badly by the citizenry.

In a system in gestation for only a little morethan two decades, these facts are not surprising.What is worrisome is the trend—which has beenfor both system support and democratic toler-ance to erode since the advent of the 2000 Lib-eral-Sandinista pact.68 The political attitudes ofthe 1990s youth generation reinforce this con-cern.69 In principle, young people espouse sup-port for the democratic system and values, andare politically aware but non-participant. Sociallyconservative and committed to traditional reli-gious values, they are strongly concerned withtheir own material welfare and yearn for politi-cal and social order but find none. As a result,they reject existing political leadership as cor-rupt, and believe democracy in Nicaragua doesnot work.

The government currently in office in Nicara-gua has wanted to change such attitudes by pro-moting reform and demonstrating that democ-racy does work. Why it has so far been unable todo so stems mostly from political roadblocksmounted by the caudillos, but in part also fromits own limitations.

Confidence Levels in Institutions67

(Percent)

None Little Some A lotChurch 16.0 10.3 22.6 51.1Media 18.1 12.8 31.7 37.5Army 33.8 15.8 31.8 18.6Mayor 41.5 17.9 29.1 11.5CSE 47.9 18.0 29.1 5.0Judiciary 54.7 17.2 23.3 4.8Central govt 56.5 17.3 22.7 3.4Parties 70.4 12.6 13.7 3.3Assembly 63.4 15.2 18.9 2.5

THE BOLAÑOS GOVERNMENT

In his first message to the nation after win-

ning election in November 2001, Enrique

Bolaños essayed his designs on Nicaragua’s

political institutions and culture. “I am firmly

committed,” he stated, “to promoting a profound

modernization of the judicial power, the elec-

toral branch and the Comptrollers to make them

more democratic, more participatory and more

professional, as part of this new era.”70 Although

his slogan during the campaign had been “em-

ployment and more employment,” Bolaños re-

vealed a conviction that institutional reform was

a vital prerequisite to Nicaragua’s development

and an ambition, theretofore muted, to be a po-

litical reformer.

In his three years in office he has demonstrated

the sincerity of his commitment to this trans-

formation in the midst of making important con-

tributions to the future economic development

of the country. Progress in achieving the politi-

cal reform agenda has nevertheless been disap-

pointingly slight. For the most part, as will be

detailed later, this has been due to powerful ob-

jective constraints. However, Bolaños’s weak-

nesses as a political leader have prevented him

from building a broad base of public support

for the reforms he wishes to effect, leaving him

a prisoner to the caudillos’ machinations.

As events in 2004 attest, this weakness has

reached the point of imperiling his presidency

and the executive branch of government. It has

furthermore produced such frustration that the

president has at times found himself tempted to

take authoritarian measures to escape from his

impasses. Equally significant, it has hindered the

development of a political party alternative nec-

essary to provide continuity for the

administration’s achievements after it leaves of-

fice in early 2007. None of this bodes well for

Nicaragua’s future.

Understanding the achievements and short-comings of the Bolaños administration is animportant prelude to examining how the poli-tics of reform have played out since the begin-ning of 2002. Both depend in significant mea-sure on the character of Nicaragua’s president.

Who is Enrique Bolaños? In pre-1979 Nicara-gua, Enrique Bolaños Geyer was a prominentbusiness figure, owner of an agroindustrial com-plex, which produced, processed and marketedcotton. As president of the Higher Council ofPrivate Enterprise (COSEP) during much of the1980s, Bolaños gained international media fameas the Sandinista revolution’s most sulphuric pri-vate sector adversary.71 When they needed landto pacify peasants in his home department ofMasaya, the Sandinistas confiscated Bolaños’sholdings in 1985 but did not dent his oppositionto their regime. In 1989, an opportunity to viefor power in elections presented itself andBolaños put his name forward as a pre-candi-date of the National Opposition Union (UNO)for president, only to see that aspiration thwartedwhen the US threw its support to Violeta Bar-rios de Chamorro.

Bereft of properties and position, Bolaños satout the Chamorro administration politically, lim-iting himself to partially successful efforts toobtain compensation for his lost patrimony,which he valued at some $10m. Though othersin his family played politics on the Conservativeteam, Bolaños joined forces with ArnoldoAlemán as vice-presidential candidate of the Lib-eral Alliance in 1996. In office, he regularly de-fended his chief ’s probity but remained person-ally aloof from the corruption that permeatedthe administration. In addition to overseeing atame National Integrity Commission, Bolañosworked on initiatives to modernize the publicadministration, promote science and technology

The Bolaños Government 23

policy, and develop wider citizen participationin government.

His nomination as the PLC’s presidential can-didate in the 2001 national race owed everythingto his not being a Liberal by birthright. Barredfrom succeeding himself, Arnoldo Alemánneeded a seat warmer in his office in CasaPresidencial until he could reclaim the throne in2006. After certain business backers vetoed hisfirst choice, he turned to Enrique Bolaños aswhat he thought would be a potable yet pliantsubstitute. Bolaños’s advantage in the selectionwas his complete lack of a Liberal political base,which meant that as president he would be un-able to challenge the caudillo for control of theparty.72 Alemán then engineered a victory forBolaños in the PLC’s 2001 nominating conven-tion over rival aspirant Eduardo Montealegre.

TO BE OR NOT TO BE PRESIDENT

A year later, just after Bolaños had installed him-self in his purple-trimmed oval office in January2002, Alemán engineered another election, el-evating himself to the post of president of theNational Assembly. Enjoying unconditional backfrom an initial cohort of 53 PLC lawmakers,Alemán clearly betrayed an intention to go onbeing both kingmaker and king. Noting that hehad kept silent over the many troubling accusa-tions of wrongdoing lodged against Alemánwhile in power, many predicted that Bolañoswould not have the resolve to stand up to thehard-driving, ebullient and ruthless former presi-dent and actually be the leader of the country.

Their mistake was in large part a misreadingof Bolaños’s character, whose antinomies havefor better and for worse shaped the course ofhis administration. Austere and responsiblewhere Alemán was wasteful and slipshod,Bolaños has unexpectedly proved a painfully slowdecision-maker and has exhibited difficulty inefficiently managing his executive team. Politi-cally inexperienced himself, he has recruited a

shifting coterie of political advisors whom out-side observers regard a hopelessly inept and whohave led their president from mistake to mis-take. But he has fulfilled the expectations of thosewho knew him as an entrepreneurial opponentof revolution by stubbornly insisting on his rightto govern.

This stubbornness has an uncomfortable cor-ollary. A rigidly principled individual, EnriqueBolaños has staked out an uncompromising op-position to traditional caudillism but has yet todevelop an alternative style of effective leader-ship. He is famously loath to engage in the lob-bying that normally accompanies the exercise ofpresidential power in a democracy, and often givesthe impression it is enough simply to point theright way forward to get other people to followit. Now in his mid-70s, and without further po-litical ambitions in life, neither is he the man tocall on Nicaraguans to do battle with thecaudillos in the streets.

In sum, many Nicaraguans think Don Enrique,as he is called, is simply not a political leader, andsome already view him as a caretaker halfwaythrough his administration. The Bolaños govern-ment nevertheless has substantial achievements toits credit, particularly in the realm of economicpolicy. In 2002, it stabilized the nation’s finances,gutted during Alemán’s final year, and success-fully negotiated support from the IMF for a newthree-year Poverty Reduction and Growth Facility(PRGF). Over the course of 2003, it put in placethe remaining preconditions for a massive pardonof Nicaragua’s $6.4bn foreign debt under theHighly Indebted Poor Country (HIPC) initiative,and renegotiated a large volume of domestic gov-ernment debt. Together, these measures freed upresources for greater public investment to pro-mote growth and reduce poverty. In tandem withincreased governmental probity, they have alsopersuaded foreign donors to begin channeling aportion of their assistance directly to the centralgovernment as budget support.

24 Democracy Adrift

In longer-term perspective, the most impor-tant achievement of the Bolaños administrationmay well turn out to be the formulation of aNational Development Plan (PND) designed toprovide an overarching framework forNicaragua’s development as a country. In con-junction with negotiation of the US-Central-America Free Trade Agreement (CAFTA), com-pleted in late 2003, the PND aims to foster theexternal competitiveness of the Nicaraguaneconomy by promoting synergies among the ac-tors involved in “clusters” of economic activity,including both national and foreign investors.Whether any Nicaraguan government can makethis approach work has been hotly debatedamong economists.73 But the exercise of formu-lating it is a positive first step in preparing thecountry to compete more effectively in worldmarkets, and is a welcome move in the directionof national policy ownership and the recoveryof decision-making power over the country’s fu-ture course.

Shortcomings in certain areas, such as mis-management of the planned introduction of pri-vate pension funds and of Nicaragua’s publicutilities regulatory agencies, balance theseachievements Nonetheless, by 2004, effective andresponsible economic management had helpedGDP growth to recover to the 4% trend line.Halfway into his term, Bolaños confidently as-sured Nicaraguans that during the second halfthey would experience the benefits of programsand policies his government has put in place.Given that the recovery has not yet paid off injob creation, however, the broad public is stillunconvinced and as shown below has