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Democratization and Human Development:How an idea on the former transformed the latter andchallenged modernization theory in Central America

Jairo Acuña-Alfaro* DPhil candidate in Development Studies

Queen Elizabeth House / Department of International DevelopmentLatin American Centre, St. Antony’s College, University of Oxford

[email protected]

Paper to be presented to the 2007 International Conference of theHuman Development and Capability Association (HDCA)

“Ideas Changing History” 16-20 September 2007New School, New York City

COMMENTS AND SUGGESTIONS ARE WELCOME

Please e-mail to [email protected] , [email protected]

* This paper is possible thanks to the Ronaldo Falconer Scholarship 2004 – 2007, at St. Antony’sCollege, University of Oxford. All comments and errors are my own responsibility.



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Democratization and Human Development:How an idea on the former transformed the latter and challengedmodernization theory in Central America

Abstract

This paper argues that democracy should be considered a capability – a potentiality. At thesocietal level, democracy is a capability as it focuses and reflects on freedoms. The actualchoosing of those freedoms among societal groups leads to different ways of livings. CentralAmerica highlights divergent paths and shed light on the argument that democracy by itself isnot enough to generate sustained advances in human development.

Only two decades ago Central America was a region in despair. Civil wars raged, economiccrises erupted, poverty increased, and military-dictatorships were the norm (with theexception of Costa Rica on the latter). During 1986 and 1987, the "Esquipulas Process" wasestablished, in which the Central American heads of state agreed on economic cooperation

and a framework for peaceful conflict resolution. This process defined a number of measuresto promote national reconciliation, an end to hostilities and democratization. Yet, whiledemocracy was advanced, human development levels experiences a small net gain; perhapsconfirming that “democracy does not serve as an automatic remedy of ailments as quinineworks to remedy malaria. The opportunity it opens up has to be positively grabbed in order toachieve the desired effect”1.

This paper evaluates the effect of prescribing democracy as a remedy that contributes to causeadvances in human development in Central America. In doing that, it builds upon a novelComposite Index of Democracy (CID) for 1972-2002. The first part deals with the region’sdemocratic performance under the CID and the strengths and weaknesses of each of itsattributes. The second section exposes Central America’s development record from theperspective of human development. It will thus explore the "democratic performance gap" in

the region and evaluate the extent of the democratic divided.

The proposition to be advanced is that Central American countries, since the last 35 years, aremoving towards a democracy-lopsided pattern of development. That is, besides remarkableadvances in the democratization trajectories, human development trajectories portray a smallnet gain. The paper scrutinizes a series of key issues regarding Central America’sdevelopment (human, economic and political) processes in the last thirty years. It evaluatesthe trajectories of democracy's contribution towards human development in Central Americafrom 1972 to the present. Such an evaluation has become urgent. After the peace wasestablished in the late 1980s social science research has commonly neglect Central Americaas a focus region despite its distinctive features and comparative potential for the rest of LatinAmerica and developing countries.

Keywords: Democratization, Human Development, Political Economy, ModernizationTheory, Latin (Central) America.

1 Sen (1999a:155).



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Introduction

Democracy promotion has become a major foreign policy for industrialized nationssince a long time now and the results seem to be contradictory, or at least divergent.Aid to promote democracy has emerged as a major growth industry in recent years. It

is not only the United States but many other Western countries, internationalinstitutions, and private foundations today that are investing millions of dollars on aidto support democratic transitions in Eastern Europe, the former Soviet Union, Asia,Africa, Latin America, and the Middle East. As Carothers noted since the early 1990s,debates among policy makers over democracy promotion oscillate between unhelpfulpoles of extreme skepticism while the vast majority of citizens in aid-providingcountries have little awareness of the democracy-building efforts their governmentssponsor.2

Democracy certainly has complex demands and human development is a multifacetedprocess of enlarging peoples’ opportunities and enhancing their wellbeing. Definitely,both processes have become major goals in the policies of many governments, and are

highly valuable and desirable for many citizens across the globe. Yet, there seems tobe no agreement in the academic and policy-making literature on whether causalitycan be corroborated or whether both processes are compatible and complementary.Indeed, for the Nobel Laureate in Economics Amartya Sen, “democracy does notserve as an automatic remedy of ailments as quinine works to remedy malaria. Theopportunity it opens up has to be positively grabbed in order to achieve the desiredeffect”.3 Though 18 Latin American nations may have experienced a successfuldemocratic transformation in the last decades, it is not clear yet how democracy hascaused advances in terms of human development. Specially, since the main problemconfronting democracy is not its sheer durability but rather a full array of problemssuch as poor economic and social performance, weak states, high crime rates, andcitizen disgruntling.4

Within this context, Central America is a unique region for the study ofdemocratization and human development, given its small geographic area, itscontrasting political regimes and its divergent human development levels. Moreover,only two decades ago Central America was a region in despair. Civil wars raged,economic crises erupted, poverty increased, and military-dictatorships were the norm(with the exception of Costa Rica on the latter). During 1986 and 1987, the"Esquipulas Process" was established, in which the Central American heads of stateagreed on economic cooperation and a framework for peaceful conflict resolution.This process defined a number of measures to promote national reconciliation, an endto hostilities, democratization, free elections, the termination of all assistance to

irregular forces, negotiations on arms controls, and assistance to refugees. In sum, thiswas a plan to promote peace and democracy on the Central American isthmus duringa time of great turmoil and outside influence in the midst of the Cold War.

Crudely speaking, modernization theory assumes that democracy is the crowningachievement of development processes, and as such it comes at last in a series of

2 Carothers (1999).3 Sen (1999a:155).4 Mainwaring and Perez-Liñan (2005).



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development steps. The central insight of modernization is that “socioeconomicdevelopment brings systematic changes in political, social and cultural life”5 in ratherpredictable ways. Moreover, a recently revised version of modernization theoryargues that human development makes democracy increasingly likely, where it doesnot exist, and increasingly responsive, where it is already in place6. Yet, thisproposition assumes a causality on the relationship between democracy and

development and this paper argues that democratization and human development areboth complex and multidimensional processes, involving human cooperation. In fact,the evaluation of the Central American trajectories cast doubts on the linearity ofmodernization theory.

In that sense, the proposition to be advanced in this paper is that Central Americancountries are moving towards a democracy-lopsided pattern of development. That is,besides remarkable advances in the democratization trajectories, human developmenttrajectories portray a small net gain. The paper scrutinizes a series of key issuesregarding Central America’s development (human, economic and political) processesin the last thirty years. Such an evaluation has become urgent, since after the peacewas established in the late 1980s social science research has commonly neglect

Central America as a focus region despite its distinctive features and comparativepotential for the rest of Latin America and developing countries. The method appliedfor this paper consists of a review of a sample of studies and writings on the evolutionof democracy and development strategies and indicators in Central America. Theapproach will be comparative, identifying the political and economic asymmetries ofthese countries, which in the last three decades have shown substantial differencesamong their democratization and development indicators.

The paper is structured in three sections. The first section evaluates the trajectories ofdemocracy's contribution towards human development in Central America from 1972to the present. This section details the mutation of democracy and its attributes usingthe Composite Index of Democracy (CID)7, as well as presents its value in contrast toexisting alternative measures. The evaluation includes the unpacking of democracyattributes in order to portray the individual evolution of each attribute in atroublesome region. Then, the second section is in a position to assess developmentperformance since the 1970s with the purpose to demonstrate the social and economicrestrictions upon which democracy has had to operate at various levels.

Clearly, there exists a connection between democracy and human development. Assuch, the third section shifts the focus of the analysis to bring together the politicaland developmental aspects. It explores the empirical connections between democracyand human development using a typology of country cases, some representing themutual enhancement of democracy and human development and some demonstrating

asymmetric performance

8

. This section investigates the movement of CentralAmerican countries from one category to another that suggests a strong democracy-lopsided pattern of development in the isthmus. The final section concludes that at thesocietal level democracy is a capability, and points to the need to scrutinize

5 Inglehart and Welzel (2005:46).

6 Idem, p.76.7 See Acuña-Alfaro (2005) for a detailed explanation on the methodology and construction of the CID.8 This section presents an adaptation of the typology developed by Stewart et al (2000) on the linksbetween economic growth and human development.



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conflicting periods in the movements of countries within and between the patterns ofdevelopment.

An Intricate and Open-Ended Democratization Process

The measurement of democracy is intrinsically debatable as its definition is

quintessentially contested9

and the coding employed may suffer from measurementproblems. Three examples from the general to the specific measurement of democracyin Central America are briefly discussed below. At the worldwide measurement levelthe seminal work of Przeworki and colleagues, treats democracy as an “all-or-nothing” process. Democracy is measured as a dichotomous variable, linked to theproverbial statement that women are either pregnant or non-pregnant10. The codingthen assigns observations the values of 0 whenever each country is not a democracy ina given year and 1 otherwise. Even though, this classification is highly correlated withother continuous measures of democracy, this clearly leaves no room for thediscussion of marginal changes in the direction of democratization processes.

Another example following this analogy is Boix’s study of democracy and

redistribution. When computed into the data, Boix defines democracy when a countryhas met three conditions: (1) the legislature is elected in free multiparty election; (2)the executive is directly or indirectly elected in popular election and is responsibleeither directly to voters or to a legislature elected according the first condition, and (3)a majority of the population (more precisely, at least 50 percent of adult men) has theright to vote11. Thus, a review of his data appendix suggests some possiblemeasurement errors. For example, Costa Rica is ranked as authoritarian from 1938 to1947. Yet, the 1940 and 1994 elections were not problematic as the 1948 one that ledto the civil war, the overthrown of the government and the establishment of a de-factoGovernment Junta for eighteen months thereafter. In fact, the de-facto government ledto the formation of the “Second Republic” and started the consolidation ofdemocracy. Also on Nicaragua, it is ranked democratic from 1984 when the peaceprocess was signed in 1986 and the Sandinistas continued to rule the country until1990 after the elections. Nicaragua’s transition in 1984 was from an autocratic regimeto a Presidential system, not necessarily a democracy.

A third example is Bowman, Lehoucq and Mahoney12, who attempt to categorize longterm comparison of democratic trajectories. BLM in an effort to overcomedeficiencies inherent in binary classification produced an alternative tri-classificationof political democracy in Central America from 1900 to 2000. BLM coded country-years vis-à-vis their fuzzy-set membership13 in the category of political democracyusing a three level scale: 1.00 represents full membership (democracy); 0.50represents a cross-over case that is partially in and partially out of democracy and

0.00 represents a case that is fully out of democracy (authoritarianism). This indexcomprises five dimensions: broad political liberties, competitive elections, inclusiveparticipation, civilian supremacy and national sovereignty.

9 O’Donnell (2007:6) and Whitehead (2002).

10 Przeworski et al (2000).11 Boix (2004:66)12 Henceforth BLM (2005).13 Following Ragin (2000).



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Figure 2 shows the patterns of political democracy suggested by BLM. As can be seenthe first half of the twentieth century was very unstable in the lower end of theircategorization, as none of the five Central American countries achieved fullmembership to democracy. It captures well Costa Rica’s democracy interlude in1917-1919 with General Tinoco and the brief civil war experienced in 1948.However, it gives Costa Rica a full membership to democracy as early as 1958, when

in fact Costa Rica’s full democracy was achieved only in 1975 with the incorporationof the communist party to the political and electoral processes.

Moreover, countries like El Salvador, Guatemala and Honduras experienced verybrief periods of democratic hope in the 1944-47 period. In April 1944 for example,Hernández-Martínez in El Salvador amended the constitution to permit himself afourth term in office, disenchanting officers from the army and air force leading themto stage a coup, and then breakout a non-violent insurrection in the spring of that year.Indeed, “after Martinez’s fall, democracy seemed to be on the political horizon in ElSalvador. Provisional President Menendez lifted the state of siege, issued generalamnesty for political prisoners, and abolished Martinez’s personal secret policeforce”14. However, this episode is not captured in BLM index either. At the other

extreme of the scale the transformation of the region in terms of political liberties canbe noted. Four countries were assigned a full membership to democracy at differenttimes, starting with Costa Rica in 1958, Nicaragua in 1990, El Salvador in 1994(although elections where held regularly since the early 1980s) and Honduras in 1997.As of 2000 it only remained Guatemala to achieve a full membership, as it wasassigned by the researchers a score of 0.50, neither democratic nor authoritarian.Although this index captures neatly the region’s political democracy evolution in thetwentieth century, it is too restricted to political / electoral dimensions of democracyand is not capturing the institutional complexities that allows for the functioning ofdemocracies.

What seems to be important in the understanding of democratization in CentralAmerica, during the early twentieth century was the short 1944-1948 period, wherefour out of five countries experienced civic movements or democratization attempts.Three of them ended harsh military regimes, with the fall of generals Martínez, Ubicoand Carías in El Salvador, Guatemala and Honduras, respectively. The other case wasCosta Rica, where an electoral fraud was the trigger of a short civil war. Of thesemovements, only the latter was successful in the transition towards democracy andstill prevails nowadays. The other three countries reverted to military authoritarianregimes and Nicaragua continued under the leadership of the Somoza dynasty. Fromthen, it followed a period of repression and military dictatorship, until the Cold Warconflict heated up in the 1980s in the Central American isthmus and civil warserupted.

14 Mahoney (2001:208).



Figure 2: BLM Index of Democratization in Central America, 1900-2000

Costa R ica

0 0 0 .5 0 .5 0 .5 0 0 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 0 0 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5

1 9 0 0

1 9 0 5

1 9 1 0

1 9 1 5

1 9 2 0

1 9 2 5

1 9 3 0

E l S a l v a d o r

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 9 0 0

1 9 0 5

1 9 1 0

1 9 1 5

1 9 2 0

1 9 2 5

1 9 3 0

Gua tem a la

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .5 0 .5 0 .5 0 .5

1 9 0 0

1 9 0 5

1 9 1 0

1 9 1 5

1 9 2 0

1 9 2 5

1 9 3 0

H o n d u r a s

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .5 0 .5

1 9 0 0

1 9 0 5

1 9 1 0

1 9 1 5

1 9 2 0

1 9 2 5

1 9 3 0

Nicaragua

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.5 0 .5

1 9 0 0

1 9 0 5

1 9 1 0

1 9 1 5

1 9 2 0

1 9 2 5

1 9 3 0

Costa R ica

0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

1 9 5 1

1 9 5 5

1 9 6 0

1 9 6 5

1 9 7 0

1 9 7 5

1 9 8 0

E l S a l v a d o r

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .5 0 .5 0 .5 0 .5 0 .5 0 0 0 0 0 0 0 0 0 0

1 9 5 1

1 9 5 5

1 9 6 0

1 9 6 5

1 9 7 0

1 9 7 5

1 9 8 0

Gua tem a la

0 .5 0 .5 0 .5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 9 5 1

1 9 5 5

1 9 6 0

1 9 6 5

1 9 7 0

1 9 7 5

1 9 8 0

H o n d u r a s

0 0 0 0 0 0 0 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 9 5 1

1 9 5 5

1 9 6 0

1 9 6 5

1 9 7 0

1 9 7 5

1 9 8 0

Nicaragua

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 9 5 1

1 9 5 5

1 9 6 0

1 9 6 5

1 9 7 0

1 9 7 5

1 9 8 0

0 N on -D em o cra cy 0 .5 S em i-D em o cra cy 1 F ul l D em o cra cy

Source: Bowman et al (2005).



The authoritarian culture in Central America defined political opponents as foes andused the force and coercion as the method, in an attempt to violently avoid any formof opposition. When sporadic and individual actions occurred (as weak attempts todemocratize), punishment, repression and political persecution were the reactionsfrom the authoritarians, either traditional dictators or militaries15. Nothing muchchanged in the political field until the end of the 1970s, when discontent became

evident and organised. It erupted first in Guatemala as early as 1962/63, followed byNicaragua in 1978/79 and last in El Salvador by 1979/80. Guerrilla forces withdifferent characteristics confronted the repressive governments of Central Americaand their US supported armies during the 1980s.

During 1986 and 1987, the "Esquipulas Process" was established, in which theCentral American heads of state agreed on economic cooperation and a framework forpeaceful conflict resolution. The "Esquipulas II Accord" emerged from this and wassigned in Guatemala City by the five Presidents on August 7, 1987. This agreementdefined a number of measures to promote national reconciliation (including dialogue,amnesty and a National Reconciliation Commission, Chapter 1), an end to hostilities(Chapter 2), democratization (Chapter 3), free elections (Chapter 4), the termination

of all assistance to irregular forces (Chapter 5), negotiations on arms controls(Chapter 7), assistance to refugees and displaced (Chapter 8), cooperation, democracyand freedom (Chapter 9), verification and international follow-up (Chapter 10), and aspecific road map (Chapter 11). In subsequent years, Esquipulas laid the groundworkfor the 1990 Oslo Accord, a preliminary agreement between the Guatemalan NationalReconciliation Commission (CNR) and the Guatemalan National Revolutionary Unity(URNG) which brought to an end more than three decades of strife in Guatemala,while also inspired a return to liberal democracy in Nicaragua in 1990 and the signingof a general peace agreement in El Salvador in 1992.

Undoubtedly, Central America today is different than the “hybrid regimes”16 of twodecades ago. Clearly, how different they are and the precise nature of their individualcharacteristics cannot be analyzed using binary measures of democracy. Democracyshould be considered as a matter of degree, spanning a continuum. As such, this paperuses an alternative Composite Index of Democracy (CID) as an aggregate andcontinuous indicator for the three main attributes of democracy. This measurecaptures marginal changes in the direction of democratization processes in CentralAmerica, both at the regional levels, as well as at country level specifics.

As can be noted in graph 1, the 1970s and 1980s were times of great political turmoilin the region, with the exception of Costa Rica with a high score of 0.8 (on a scales of0 to 1), but later decreasing in the early 1990s. Guatemala is perhaps the country thatsuffers the deepest reversal in democratic terms, plummeting its indicator from 0.52 in

1973 to 0.15 in 1982 and 1983 when the country was immerse in perhaps CentralAmerica’s worst civil war. Honduras on the other hand, followed Costa Rica in thedemocratization path as early as 1980, and El Salvador even though confronted acrude civil war in the 1980s, it seemed to have started its democratization process asearly as 1983, with a new Political Constitution. Nicaragua, on the other hand, as aresult of the Sandinista take over of power in 1979, during the 1980s showed an

15 Torres-Rivas (2006).16 See for example Karl (1995), Diamond (2002).



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unstable democratization process, but with the elections in 1990, when the Sandinistassurprisingly conceded defeat and gave power to Violeta Chamorro, its democracyindicator tended to stabilized, even though experienced a brief deterioration in the1993-95 period. However, borrowing Linz and Stepan’s famous dictum, since 1996,with the ascendancy of Guatemala to democracy in the region, it seems it has becomethe “only game in town”.17

Graph 1. Central America: Composite Index of Democracy 1972-2002

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1 9 7 2

1 9 7 3

1 9 7 4

1 9 7 5

1 9 7 6

1 9 7 7

1 9 7 8

1 9 7 9

1 9 8 0

1 9 8 1

1 9 8 2

1 9 8 3

1 9 8 4

1 9 8 5

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

Costa Rica

El Salvador

Honduras

Guatemala

Nicaragua

Source: Own calculations based on Composite Index of Democracy (see Acuña-Alfaro, 2005).

Unpacking democracy attributes

Yet, democratization as an open-ended process needs to be evaluated at the middlelevel of generalization (neither in minimalist nor maximalist. For that purpose, what isneeded is to “unpack” the democracy variable to understand the individual evolutioneach attribute has had in the last thirty years. Since Central America’s transitiontowards democracy has proven complex, diverse, manifold, simultaneous andunfinished18. Table 2 shows the democratic transformation in Central America fromthe late 1970s at the start of the revolts in the region to the dawn of the XXI Century.

In all three democracy attributes the region made substantial improvements in a

relatively short period of time (if Costa Rica is excluded from the sample, thetransformation is more remarkable, see parenthesis in the table). The CentralAmerican countries awoke in the 21st Century from a nightmare of decades ofauthoritarian repression and presenting a strikingly different situation. The changesare remarkable considering a weak path-dependence legacy to which anchor a

17 Linz and Stepan (1996:5). For example, the recent election of Daniel Ortega in Nicaragua (October,2006) seems to have come to confirm this.18 Cerdas and Zovato (2005).



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democratization processes. Also, they are remarkable given the short period of time inwhich they took place, along with the fact that “they have taken place in some of thecontinent’s poorest countries, in the midst of civil strife, and with the end of the ColdWar having a less-than-expected impact”19.

Table 2. Democratic Transformation in Central America

Variable Year Mean Std. Dev. Min. Max Obs.

Composite Index ofDemocracy

1978 .407(.286)

.278(.081)

.187(.187)

.890(.359)

5(4)

2002 .697(.663)

.088(.052)

.587(.587)

.834(.706)

5(4)

Democracy Attributes

Open andParticipatory

1978 .169(.099)

.173(.085)

0(0)

.451(.202)

5(4)

Environment 2002 .286(.274)

.103(.115)

.133(.133)

.397(.397)

5(4)

Institutional /

Political Environment

1978 .4

(.25)

.358

(.147)

.1

(.1)

1

(.45)

5

(4)2002 .9

(.875)

.061(.028)

.85(.85)

1(.9)

5(4)

Collection of Rightsand Liberties

1978 .533(.416)

.280(.117)

.333(.333)

1(.583)

5(4)

2002 .700(.646)

.151(.104)

.5(.5)

.917(.75)

5(4)

Note: In parenthesis (), excluding Costa Rica.Source: Own calculations based on Composite Index of Democracy (see Acuña-Alfaro, 2005).

A simple way to show this transformation graphically is though box-plots. Thesegraphs examine the distribution of democracy across the entire region and in each

country individually. The wider the box, the greater the variation experienced. Asexpected, since 1972 Costa Rica presents the most stable case at the upper democraticscoring, with the other countries showing a greater variation in time. Furthermore, thecases of Costa Rica and El Salvador to some extent show the 95th percentile stretchedout away from the box. This may suggest a negative skew or that the rankings forthese two countries tend to be lower than expected.

In comparative perspective it is interesting to note that when plotted graphically thedemocracy scores (Composite Index of Democracy, CID) with each of its threeattributes, differences in types and degrees of democracies are revealed. At thegeneral level, it is appealing to notice that the three attribute measures follow thesame pattern as an indication that the three attributes of democracy run in parallel and

they are measuring related attributes within different political regimes. Throughoutthe period under study Latin American countries rank consistently lower in the openand participatory environment attributed of democracy. Also, from 1972 to 1985 onaverage the region achieved higher scores in terms of the collection of rights and

19 Karl (1995:72).



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liberties, but from 1985 onwards, institutional / political environment has gainedprominence20.

Graph 2. Box-Plots of Democratic Transformationin Central America, 1972-2002

. 2

. 4

. 6

. 8

1

. 2

. 4

. 6

. 8

1

Central America Costa Rica El Salvador

Guatemala Honduras Nicaragua

D e m o c r a c y

Graphs by Country


Furthermore, when grouped in Latin American subregions, the five Southern Conecountries from 1984 onwards score consistently higher scores on the electoralorganization aspects of democracy (participation and competition) than the CentralAmerican and Andean counterparts. Central America21, since 1979 scored higherinstitutional rankings than freedoms and in the Andean countries the differencebetween rights and liberties and institutional attributes is less from 1972 to 1982.Also, from 1972 to 1989 the Southern Cone countries score lowest CID scores, butfrom 1990 onwards perform slightly better than the other two sub regions (Can thisfinding be attributed to the indication that the transition period and the consolidationof democracy in these countries yielded better dividends?). In terms of electoral

20 This is opposite the case of the East Asia and the Pacific region, where countries have systematicallyobtained higher procedural scores than substantive, accentuated from 1976 onwards. The EasternEurope and Central Asia region suggests a clear example of the domino effect from the Berlin Wall’sfall, when in 1989 most of the countries embraced democratic regimes. However a word of cautionseems relevant here which challenges the reliability and validity of these indicators. It is interesting tonote that in the span of one year, as per magical effects, the entire region became democratic. TheMiddle East and North Africa is perhaps the only region where democracy and its attributes still arelagging behind, and it has not yet even reached the minimum threshold assigned to each democracyattribute.21 Includes Costa Rica and thus it is pushing up the indicators. When Costa Rica is excluded from the analysis, themeasures reduce systematically, as shown in the table 2.



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democracy, the three subregions scored their lowest levels in the late 1970s and early1980s.

Graph 3. Democracy and Attributes by Subregions in Latin America Latin America: Democracy Attributes 1972-2002

0.0

0.1

0.2

0.3

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1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

A

C

B

Democracy

Central America: Democracy Attributes 1972-2002Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua

0.0

0.1

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1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

A

C

B

Democracy

Andean: Democracy Attributes 1972-2002

Bolivia, Colombia, Ecuador, Peru, Venezuela

0.0

0.1

0.2

0.3

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0.5

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2 0 0 0

2 0 0 1

2 0 0 2

C

B

Democracy

A

Southern Cone: Democracy Attributes 1972-2002Argentina, Brazil, Chile, Paraguay, Uruguay

0.0

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2 0 0 0

2 0 0 1

2 0 0 2

A

C

B

Democracy

(A) Open and Participatory Environment with Political Opportunities; (B) Institutional / Political

Environment; (C) Collection of Rights and Liberties.


How can these findings be interpreted for the Central America context? Does it meanthat during the transition period governments were initially more concerned with thefreedoms attribute (political rights and civil liberties), and lately the emphases shiftedto institutional rules and opportunities for contestation? Or is it a reflection of theelasticity of the measures used? The latter might simply be that outputs, such aspolitical rights and civil liberties or perceptions thereof are less elastic than processesand institutional arrangements, and more difficult to change22. Yet, the purpose of theCID is not to rank countries in a scale and compare them from more autocratic tomore democratic. The objective is not to grade countries (i.e. to say that Costa Rica ismore democratic than El Salvador or Venezuela), but to group sub-regions/countriesin categories according to their democratic attributes performance. A grouping assuch, permits highlight “divergent cases” when the indicators differ at some points intime. For example, although the three indicators or attributes are highly correlated (asthey should be), within some countries the attributes’ direction diverge, at givenyears.

In the case of Central America, Guatemala and Nicaragua highlight “divergent cases”on the ranking of democracy attributes. In Guatemala, the freedoms and institutionalindicators diverge from 1984 onwards, and Nicaragua’s indicators showscontradictory patterns as well from 1989 (the year before the electoral defeat of theSandinista government), with the institutional indicators stabilizing at the level of0.900 while the freedoms attribute decreases from .650 in 1989 to 0.420 in 1992,

22 I am grateful to Rodrigo Cubero, for bringing this issue of measurement elasticity to my attention.



13

increasing again to the point of 0.750 in 1998 to drop down again to 0.675 in 1999. Interms of electoral democracy the indicator captures neatly how after the 1979overthrown of Somoza, the Sandinista regime impede participation and competitionof political parties, until the 1984 election that saw Daniel Ortega win the Executivefor the first time.

Graph 4. Democracy and Attributes by Countries in Central America Costa Rica: Democracy Attributes 1972-2002

0.0

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El Salvador: Democracy Attributes 1972-2002

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C B

Democracy

Guatemala: Democracy Attributes 1972-2002

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C

B

Democracy

Honduras: Democracy Attributes 1972-2002

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A

C

B

Democracy

Nicaragua: Democracy Attributes 1972-2002

0.0

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2 0 0 0

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A

C

B

Democracy

El Salvador on the other hand is an interesting case. It clearly shows how thecollection of rights and freedoms started markedly to deteriorate in 1975 and led tothe outbreak of the coup and Civil War in 1979 that lasted for the next twelve years.The freedoms score in 1975 was 0.75, which plummeted to 0.33 in 1978. Theelectoral attribute even reached the lowest possible classification as formal democracywas absent from 1980 until 1984 with the new elections that saw José NapoleónDuarte win the Presidency that had lost earlier. Yet, the institutional attribute seems tohave been given priority by the Executive since the early 1980s. As the indicatorshows, a steady increase can be observed from 1978 with a score of 0.20 to 1984 witha score of 0.80, signalling the drafting of the new Political Constitution in 1983 thatmeant the strengthening of institutional aspects of the polity.

Honduras sees the transition to democracy enhanced as early as 1981 when theelectoral attribute jumps from 0 to 0.31, in tandem with the recuperation of the

(A) Open and Participatory Environment

with Political Opportunities;

(B) Institutional / Political Environment;

(C) Collection of Rights and Liberties.

Source: Own calculations based on

Composite Index of Democracy (see

papers 2 and 8).



14

institutional and freedom levels: the former raises from 0.42 in 1979, to 0.74 in 1984,while the latter increases from 0.45 in 1979 to 0.80 in 1982. Last, but not least, thecase of Costa Rica confirms its exceptionality in the region, since all three democracyattribute’s indicators show the highest level and smallest variance in the entire periodfrom 1972 to 2002.

Central America has entered a new phase of democratization. The structural barriersto democratization were recognized at the highest political level during the Esquipulaspeace process. At the Esquipulas II Agreement it is expressively mentioned for thefirst time in history the Presidential compromise towards democracy in the region.Items 3 and 4 in the Agreement exhort to undertake a “pluralistic and participativedemocratization process”, respect for Human Rights and the celebration of “free,pluralist and honest elections”. Furthermore, the Central American Alliance forSustainable Development (ALIDES) signed in 1994 by the Central AmericanPresidents reinforced their previous commitment as democracy was included as oneof its seven principles and the first base for sustainable development23. Indeed,democracy is nowadays a constitutional guarantee in all five Central Americacountries24.

Yet, given this remarkable democratic mutation, a puzzling question that needs to beaddressed is why Central Americans are so unsatisfied with democracy25. Publicopinion studies show a tendency of dissatisfaction with democracy in the last tenyears. Latinobarómetro26 data show a downward trend in terms of public satisfactionwith democracy, commonly associated with government performance27. For example,after an optimist rise in the satisfaction towards democracy from 1996 to 1997, almosta decade later, on average, Central Americans had a 49% of satisfaction withdemocracy, declining to 32% in 2004. As can be seen in graph 5, individually, CostaRicans satisfaction decreased from a regions’ record of 68% in 1997 to 47% in 2004;El Salvador’s decreased from 48% to 37% respectively (even though it scored arecord low of 21% in 2001); Guatemala decreased from 40% in 1997 to 20% in 2004;Honduras, from 49% to 30%, while Nicaraguans satisfaction fell from 51% to 21% inthe same period. In fact, in all Central American countries, the proportion of citizensunsatisfied with democracy is more than those satisfied with it, including a lack oftrust in political parties28.

Although, satisfaction with democracy is conceptually distinct from support for thesystem these results are also consistent with UNDP’s 2004 report on Democracy inLatin America. While satisfaction of democracy involves a dimension of legitimacy

23 ALIDES’ general objective was to “make the isthmus a region of peace, liberty, democracy anddevelopment…” and in particular it aimed to “strengthen rule of law and democratic institutions”.24

Estado de la Región (2003).25 Perhaps the first Central American analyst to stress this democratic dissatisfaction was RodolfoCerdas, with his 1993 publication “El Desencanto Democrático” (The Democratic Disenchantment).Even though his focus was merely on political parties, it was a first call of attention to the forthcomingcitizen perception on the functioning of democracy and their governments in Central Americaspecifically, and Latin America generally.26

Latinobarómetro is a public opinion project intended to capture annually the opinions, attitudes,behaviors and values of citizens in 18 Latin American countries since a pilot study carried out in 1988(Lagos, 2005). See www.latinobarometro.org.27 Cerdas and Zovatto (2005:8).28 As argued by Sonnleitner (2005).



15

and acceptance of values, such as freedoms and tolerance, the support for democracysuggests a support to the government system. In that sense, it is not surprising to seethat UNDP’s Support to Democracy Index is highest in Costa Rica at 53.8% andlowest in El Salvador at 35% among the respondents who declared to be “democrats”(the scores for the other three countries are worryingly low: Guatemala 42%,Honduras, 46.2% and Nicaragua, 38.7%). In fact, whereas Latinobarometro suggests

that support for democracy in Latin American from 1996 to 2004 oscillated between61% and 53%, respectively, preference for democracy in Central America alsounderwent a downward trend, from 63% in 1996 to 50% in 2004.

Graph 5. Central America: Satisfaction towards Democracy, 1996-2004

10

20

30

40

50

60

70

80

1996 1997 1998 1999/2000 2001 2002 2003 2004

P e r c e n t a g e

Costa Rica Honduras Nicaragua Guatemala El Salvador

Source: Data provided by Latinobarómetro (www.latinobarometro.org)

In political terms, even though none of the authoritarian regimes of the 1980sprevailed by 1999, elections are held regularly as free and fair events and citizen havethe liberty to express their views and opinions without being persecuted, thedemocratization impulse has lost dynamism, and some reversals had occurred by2002, signalling that the democratization of the political regimes in the region is stillan unfinished business. For instance, the electoral systems in some countries still

present inequalities on competition, including the weakening of campaign financingrules29, proportional representation at the local level (i.e El Salvador, where thewinning party wins all seats at the local level). Regarding the demilitarization process,some legal and judicial reforms are still pending and there is a need to betterguarantee citizen oversight over the military30. But more importantly, institutionaldeficiencies are common in the functioning of democratic institutions.

29 Casas-Zamora (2002) and (2005).30 See for example Estado de la Región (2003:chapters 6 and 7).



16

The next section exposes Central America’s development record from the perspectiveof human development. Considering that “the development and strengthening ofdemocratic regimes rely not just on political will, but also on economic resources,administrative capabilities and technical skills”31, the section turns to the developmentperformance of Central America since the 1970s. The intention is to demonstrate and

to understand the economic environment and restrictions upon which these politicalinstitutions have operated at various levels in Central America.

Assessing Development Performance since 1970

Munro’s characterization of the isthmus development backwardness deserves to bequoted at length. After an extensive period of fieldwork across the region, heconcluded that:

“The backwardness of the five republics of Central America was inlarge part due to the isolation in which they were kept by Spain duringthe three centuries of their existence as colonies. Their development

was restricted until the beginning of the nineteenth century by amisguided policy which made progress almost impossible … theeconomic development of the five republics was held back by internalconditions, for the political disturbances which characterized their firsthalf century under republican institutions, and which are still prevalentin some of them, made large scale agriculture difficult andunprofitable, and discouraged commerce. The civil wars often drewlaborers away from plantations at the time when their services weremost needed, and caused a periodic destruction of property and alaying waste of planted fields. In Guatemala, Costa Rica and Salvador[sic], where revolutions have been less common during the lastgeneration, the wealthier classes have become very prosperous throughthe production and exportation of coffee, but Honduras and Nicaragua,because of the almost continuous fighting between rival factions, aretoday but little better off than in 1821”32.

This paragraph could have well been written at the dawn of the twenty-first centuryand with a few clarifications, it resembles the path travelled by Central American interms of development opportunities. The internal conditions and political disturbancesmentioned by Munro kept impeding the Central American countries to invest in moreprofitable activities and promote human development more actively. Although theliberal elite believed in the notions of progress and economic development and soughtto integrate the Central America countries with the rest of the world, the political

systems that were set up came to be known as “republican dictatorships”

33

withvariations for each country34.

31 Vilas (1996:461).32 Munro (1918:14-15)33 Skidmore and Smith (1984:293).34 As mentioned by Mahoney (2001).



17

Historically, development in Central America has been blocked by elite-classalliances between the export sector and the governmental hierarchy35. Yet, it is nosurprise that in the second half of the twentieth Century the prevalence of militarygovernments: Guatemala having the most with a total of 36 years of militarydictatorship, followed by Nicaragua with 28 years of armed rule and 10 of themilitary-civilian type; El Salvador with 25 years of military rule and 5 military-

civilian, and finally Honduras, with a total of 19 years of military occupation. CostaRica is the single exception with a total of 50 years of civilian governments. Seligsonnoted the region suffered “an almost unbroken chain of dictatorial rule and militarydomination in which civil rights, popular participation and governmentalaccountability have been conspicuously absent”36. This means nothing more thatcitizens needs and desires have been extensively ignored by their rulers, as well asnational sovereignty has been narrowed by heavy-handed and repressive foreign statesand powerful trans-national corporations. In fact, during the 1970s and 1980s theCentral American armies were stimulated to perform activities outside their traditionaltasks of sovereignty defence and law and order, for example. They incurred inbanking and educational duties and assumed the role of civil police, showing a highdegree of corruption and perversion of its original boundaries.

The Central America economy thus became thoroughly dependent on the export oftwo agricultural commodities, depending almost entirely to the fluctuations ofinternational trade. When coffee and banana prices went down, earnings also wentdown, with the poor peasants suffering the heaviest burden and leaving governmentslittle room for manoeuvre. This strategy discouraged industrialization in CentralAmerica, given the shortage of a middle-class labor since most of the population werepeasantry37, and that the bourgeoisie-elite controlled government policies. In addition,the small scale of national markets presented another major obstacle toindustrialization. The Central America Common Marker (CACM) created in 1960attempted to overcome these shortages. CACM aimed to stimulate a two-fold strategyto promote free trade among member countries and create common tariffs to protectinfant enterprises38. The creation of the CACM led to a period of significant growth inthe isthmus, and commerce multiplied, growing from 7.5% in 1960 to 26.9% by197039.

Yet, the economic success of the new commercial strategy soon faced the politicalreality of the region. A dispute between Honduras and El Salvador in 1969 40 meant

35 Like the type of regimes suggested by Huntington (1968), but contrary, in the Central Americancontext it has been proved that they have not promoted development as his revised-modernizationtheory assumes.36 Seligson (1987:167).37

Around 1900 less than 10% of the Central America population lived in cities, and by 1970 the figure

ranged between 20 and 40 percent. As Skidmore and Smith (1984, p.298) argued: “urbanization camelate to Central America”.38 See by Skidmore and Smith (1984) and Bulmer-Thomas (1987), (1988) and (1991).39 Bulmer-Thomas (1987).40

This dispute has been wrongly named “Football War” ( La guerra de fútbol, in Spanish). It was afive-day war caused by political differences between Hondurans and Salvadorans, includingimmigration from El Salvador to Honduras. The name derives from the timing of the war, whichoverlapped with rioting from a series of football matches between the national teams of these twocountries. Essentially, both sides “lost” the war; neither gained a decisive military victory and the deathtoll of approximately 2,000 was shared approximately equally between the two. The war led to asuspension of the Central American Common Market, yet the social situation worsened in El Salvador



18

the CACM lost a good deal of precious momentum and failed to recuperate andembark the isthmus on the path of import-substitution industrialization, as the CACMmade little headway into the agricultural sector, and protectionist policies remainedthe rule. It also failed to meet the challenge of unemployment and the build up of like-minded government coalitions. Indeed, while in the 1950s and 60s intra-regional tradewas minimum, the 1970s proved to be the most active years in the CACM. But on the

whole, from 1950 to 1995 intra-regional trade has been modest, descending in 1995 toless than 20%41.

The extension of democracy has increased the freedoms of citizens across the regionto express their views, choose their leaders, organize politically, and gain access toinformation about their government42. It should not be surprising, unexpected ornecessarily unhealthy that citizens in new democratic systems tend to be unsatisfiedwith the regime’s performance. However a distinction must be made on the source ofthis lack of satisfaction with democracy. As has been mentioned along this section,Central America has experienced a remarkable democratic transformation in a veryshort period of time (see table 2 and graph 1). Perhaps no other region in the worldhas been able to peacefully resolve prolonged civil wars through a combination of

regional and national actions, not derived from political or military interventions. Thiscan be summarized in the unique three-fold mutation experienced in less than twentyyears: (i) from war to peace (even though violence and citizen security remain aserious problem in post conflict countries like El Salvador and Guatemala); (ii) frompeace to democracy (though still unfinished with the persistence of authoritarianenclaves in El Salvador, Guatemala and Nicaragua); (iii) from democracy todevelopment (perhaps the most retarded and requires longer term strategies, sinceNicaragua and Honduras remains the two poorest countries in Latin America andGuatemala is among the most unequal in the world).

Yet, despite these significant accomplishments, “there is still reason fordisappointment with respect both the results and processes of democratic governancein the region”43. For example, in eight of the 18 Latin American countries, the averagecitizen was worse off in 2000 than in 1980, including three of the five CentralAmerican countries (Guatemala, Honduras and Nicaragua). Though, improvements ineducation and health meant improvements in terms of the overall human developmentindex. That is, even though Central American democracies are not necessarilyprosperous in terms of per capita income, during the last twenty years they havebecome more congenial places to learn and live.

Central America thus made little progress in terms of economic development. Graph 5depicts the real gross domestic product per capita between 1950 and 2002 for all fiveCentral American countries. As can be seen, between 1950 and 1970 it was very low

among the five countries. Interestingly, Nicaragua had the highest rate of per capitaGDP during the 1960s (even higher than Costa Rica’s). During the late 1970s thebenefits of democratization started to pay dividends, since Costa Rica’s incomeexpanded in comparison to its neighbours, as civil wars started in Guatemala,

as the government proved unable to satisfy the economic needs of citizens deported from Honduras,resulting in one of the causes of the civil war in El Salvador that followed.41 Bulmer-Thomas (1998:35).42 IADB (2002:267).43 IADB (2002:8).



19

Nicaragua and El Salvador respectively. Thus, while three decades ago Nicaragua hadthe highest per capita income in the region, at the start of the twenty-first century,Nicaraguan citizens were worse off than in 1980 while Honduras has not been ableyet to improve income indicators and lagged behind during the second half of theCentury.

Graph 5. Central America Real GDP per capita (US$ current prices)

Yet, development is a multidimensional process that goes beyond income or monetaryconsiderations. Bulmer-Thomas noted in the late 1980s that “as measured by thegrowth of Gross Domestic Product per head, the region’s performance comparesfavourably with the rest of Latin America and other less developed countries (LDCs).At the same time, political convulsion has become more acute, and in no part of theisthmus – not even Costa Rica – is political stability assured”44. This argumentsummarizes the paradoxes of Central America’s development since the collapse of theCentral American Common Market. On the whole, with the confrontations in the1970s and 80s, a new developmental challenge started. In face of the challenges of

globalization, Central America re-started a democratization process. Prior to the “lostdecade” for Latin America, an impressive Central American economic model wasbased on three pillars: (i) rapid growth of traditional exports; (ii) a strong regime ofexchange rates, and (iii) the establishment and functioning of the CACM45. But,surprisingly for most Central Americans, this model collapsed in the 1980s, especiallyfor political reasons. Indeed, a review of the political economy of Central America in

44 Bulmer-Thomas (1988:19).45 Bulmer-Thomas (1991).

0

200

400

600

800

1000

1200

1400

1600

1800

1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

Costa Rica

El Salvador

Honduras

Guatemala

Nicaragua

Source: Alan Heston, Robert Summers andBettina Aten, Penn World Table Version 6.2,Center for International Comparisons ofProduction, Income and Prices at the University

of Pennsylvania, September 2006 .

Central America:

Real Gross Domestic Product per Capita ($ in Current Prices)

0

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2 0 0 0

2 0 0 2

Costa Rica

El Salvador

Honduras

Guatemala

Nicaragua



20

the 1980s, identified that the seeds of the crisis, could be explained by fourinterrelated causes: (i) political unrest, (ii) uneven development, (iii) structural flawsin development strategies, and (iv) global recession46.

It is widely known that the context for economic development in Central Americaduring the 1980s was not positive. Indeed, during the period of most intensive conflict

in the region, the GDP per capita felt by 15%. And with the exception of Costa Rica,the region embarked upon the process of democratization with indices of infantmortality, life expectancy at birth, access to potable water, malnutrition, illiteracy andpersons per doctor that were worse than those for Latin America47. However, it maybe said that according to “social indicators”, besides the bad performances at the endof the 1970s and the 1980s, the Central American countries managed to increase(although unevenly) the living conditions of its citizens. Despite this positive “social”development, the late 1970s and 1980s are considered as the worst of times for theCentral American countries in economic terms. Indeed if one looks at the growthrates, it can be noticed that since the early 1970s the economic performance of thesecountries was very unstable, starting a dangerous decline in 1977 which reached itslowest rate in 1982 (-6.4 GDP per capita). The cruel confrontation and civil wars (i.e.

El Salvador, Guatemala and Nicaragua), led to more than 250,000 killings and around2.5 million displaced. Indeed 1979 has been identified as the historical moment,which marked a watershed in the sub-region’s development and the beginning of theworst economic crisis, even deeper than the 1930s48. Finally, it may be noted that it isnot until 1987 that the region tends to stabilize its growth at modest, but “positive”scores49.

Graph 6. Central America: Selected Health Indicators, 1960-2004

Life Expectancy at Birth Infant Mortality rates

45

50

55

60

65

70

75

80

85

1960 1970 1980 1990 1995 2000 2004

T o t a l ( y e a r s )

0

20

40

60

80

100

120

140

1960 1970 1980 1990 1995 2000 2004

P e r 1 , 0

0 0 l i v e b i r t h s

Source: World Development Indicators and HPNstats, World Bank

One fact that needs to be stressed is the modest improvements made in terms of healthand educational attainments. This is crucial in terms of the human development

46 See Feinberg and Bagley (1986).47

Dunkerley (1994).48 Bulmer-Thomas (1987).49 This last phenomenon can be correlated with the signing of Esquipulas II –the peace treaty thatbegan the pacification for the region and hence initiated the democratic transition, and a more coherentdevelopment process.

Costa Rica El Salvador Guatemala Honduras Nicaragua Latin America



21

perspective, since, it is believed that with more education and health, moredevelopment; in the sense that with an educated and healthy population thepossibilities to innovate, create and entrepreneur are increased. Indeed, just a look atthe development of both indicators over the long run, shows that the region hasachieved better standards. On average, today Central Americas manage to live around20 years more than in the 1960s (see graph 6). Yet, besides improvements, apart from

Costa Rica, the region scores lower than the Latin American average. El Salvador isthe country that tends to converge with the region overall by 2000.

Table 3. Central America: Educational Attainment, 1960-2000Highest Level Obtained

First Level Second Level Post-Secondary

No Total Complete Total Complete Total CompleteAverageYears of

Schooling (Percentage of the population aged 25 and over) School

Costa Rica

1960 17.7 72.8 21.0 6.8 2.4 2.7 1.8 3.86

1970 20.6 68.7 12.1 7.6 2.9 3.1 2.1 3.61

1980 14.5 66.8 16.0 10.3 4.4 8.4 5.7 4.70

1990 10.8 62.2 14.0 13.2 5.5 13.8 9.4 5.572000 9.4 60.7 13.6 11.3 4.7 18.6 12.7 6.0

El Salvador

1960 61.8 33.2 5.1 4.6 2.0 0.5 0.3 1.70

1970 54.2 37.9 8.0 6.0 2.5 1.9 1.3 2.29

1980 36.0 52.0 11.5 8.7 3.6 3.3 2.2 3.30

1990 37.1 45.9 10.2 9.8 4.0 6.3 4.3 3.58

2000 35.0 45.6 10.1 8.8 3.7 10.6 7.2 4.5

Guatemala

1960 69.2 26.7 7.2 3.6 1.0 0.5 0.3 1.43

1970 68.4 26.9 6.2 3.7 1.1 1.0 0.7 1.49

1980 54.7 35.7 8.0 7.4 2.2 2.2 1.5 2.34

1990 52.9 35.9 8.0 6.7 2.0 4.4 3.0 2.60

2000 47.1 37.6 8.3 9.5 2.8 5.8 4.0 3.12

Honduras

1960 60.9 34.9 6.9 3.5 1.6 0.6 0.4 1.69

1970 61.9 34.2 7.9 3.1 1.8 0.9 0.6 1.70

1980 49.0 44.4 8.6 4.8 2.8 1.8 1.2 2.33

1990 31.9 52.6 11.5 11.0 6.3 4.5 3.1 3.69

2000 25.9 57.0 12.4 10.6 6.0 6.5 4.4 4.08

Nicaragua

1960 59.0 33.7 9.1 4.7 1.4 2.5 1.7 2.09

1970 53.9 34.6 7.9 6.9 2.0 4.5 3.1 2.59

1980 48.9 39.1 8.7 6.5 1.9 5.6 3.8 2.86

1990 41.3 40.6 9.0 10.2 3.0 7.9 5.4 3.60

2000 31.7 43.0 9.5 16.5 4.8 8.9 6.0 4.4Central America

2000 26.6 47.3 12.2 14.0 6.1 12.1 8.2 5.0

Latin America2000 17.7 50.6 14.4 19.9 8.4 11.8 7.7 5.7

Source: Barro and Lee (2000).

In terms of education indicators, while in the 1950s the number of Central Americansable to read and write was about 44%, by the start of 2000s, it reached and impressive74%, Costa Rica being the country with the highest rates ever and Guatemala with the



22

lowest. Yet, in terms of educational attainment the improvements are still modest,with greater within region variation (see table XX). For example, the sub-region’saverage years of schooling continues to be very low (5 years), and while the isthmushas reduced in half the number of people with no schooling, during the first level(primary education) the percentage of population aged 25 and over who havecompleted this level has not improved from the 1960s. At the country level,

Guatemala and El Salvador present the lowest levels of schooling, though at the post-secondary level the latter shows the second-best scores.

Though remarkable the progress achieved, the Central American average still lagsbehind the Latin American, with the exception of Costa Rica. Even though, there hasbeen a significant progress at the secondary and tertiary levels, this is increasing theeducation gap. This is, while of the top 12.1% of the population aged 25 and over whoaccess post-secondary training, only 8.2% finish it; while nearly 12.2% of the bottomhalf of the population completes the first level (see table 3). This is of crucialsignificance for Central America, since “human capital, particularly that attainedthrough education has been emphasized as a critical determinant of economicprogress”50 and more importantly “the better educated the population of a country, the

better the chances for democracy”.51 Thus, it is not causality that the country with thehighest educational attainment levels has enjoyed a better record of living standardsand democratic life. And Guatemala, with the lowest education attainments presentsthe highest poverty levels along with the most fragile democratic system.

Yet, even the Central American countries seem to have achieved modest economicand developmental progress there are basic development gaps which must be closed.For example, in Costa Rica life expectancy is about 78.3 years, in Nicaragua it isalmost 18 years less (70.0). The average GDP per capita in US dollars (PPP) is$3,800; but the highest ($9,481) in Costa Rica, differs greatly from the poorestHonduran ($2,876). Furthermore, poverty indicators are still alarming: 39% ofNicaraguans lack access to safe drinking water; 60% of Salvadorians do not have anykind of social security, or access to health services. Also, 69% of Nicaraguans do nothave access to sanitation services, and 27% of Guatemalan children (below 5 year-old) are malnourished. Human development indices are substantially different; whileCosta Rica ranked third in Latin America (0.881, 48 worldwide), Guatemala ranked118th worldwide with a HDI of 0.67352.

Consequently, with the persistence of inequality and exclusion, it becomes evident theimperative to enrich the concept of development with new spheres that belong to thepolitical economy approach, and not just to economics or politics per se, in an effortto comprehend more fully the process of development and how the democratizationprocess started in the region have contributed towards it. The next section addresses

the empirical connections between democracy and human development in CentralAmerica. The focus of analysis shifts to bring together the political anddevelopmental aspects and explore the links between democracy and humandevelopment using a typology that investigates the movement of Central Americancountries from one category to another. It suggests a strong democracy-lopsidedpattern of development in the isthmus.

50 Barro and Lee (2000:1).51 Lipset (1959:79).52 UNDP (2006).



23

A Democracy-Lopsided Pattern of Development

The legacies of the “full-blown” liberalism period in the nineteenth Century, wereregime inheritance during most of the twentieth century, with Guatemala and ElSalvador as military-authoritarianism, Costa Rica as a liberal democracy and

Honduras and Nicaragua as traditional dictatorship53

. These regime heritages endedapproximately at the same time in El Salvador and Nicaragua (1979), Honduras(1982) and Guatemala (1986). These four countries started in the mid 1980s ademocratization process prompted by the peace negotiations. In fact, building uponthe work lay out by the Contadora Group from 1983-1985, the Esquipulas Peace initiative settled the military conflicts that had plagued Central America for manyyears, and in some cases for decades (i.e. Guatemala). In political terms Esquipulas,undoubtedly meant a turning point in the region. However, even though thisremarkable transformation, this time around, it was the development processes whichcould not match up with the political successes.

Even though, Central American countries continue making progress in terms of

income per capita (with the exception of Nicaragua), education, health and the overallHuman Development Index, the latter’s improvements were marginal. Coming from aperiod of economic growth in the 1960s and early 1970s, the democratizationadvances on the 1980s and 1990s, brought only a small net gain in terms of the HDI,over the 27-year period between 1975 and 2002 (see table 4, far right column). Thisoverall small net gain is not surprising, especially considering that the HDIaggregation as a composite index indicates small changes over time. What isremarkable to stress out is that these small net changes over 5-year intervals did notvary tangibly following the democratization processes triggered in the mid 1980s.Table 4 indicates the rates of growth of the HDI in the period between 1975 and 1980.It is done by way of presenting the percentage change for each five years interval.

Table 4. Human Development Index Growth, 1975-2002

1980/1975 1985/1980 1990/1985 1995/1990 2000/1995 2002/2000 2002/1975

Costa Rica 1.03 1.01 1.02 1.02 1.02 1.01 1.12

El Salvador 1.00 1.03 1.06 1.06 1.04 1.01 1.22

Guatemala 1.07 1.02 1.04 1.05 1.05 1.01 1.27

Honduras 1.10 1.05 1.04 1.04 … … 1.30

Nicaragua 1.02 1.01 1.01 1.06 1.03 1.04 1.18

Source: Calculations based on UNDP (2005).

Thus, considering democracy and human development processes as compatible andinterdependent, this framework assumes that countries can be on a mutually

reinforcing upward spiral, with high levels of democracy leading to higher levels ofhuman development and high human development in turn further promotingdemocratization processes. Conversely, weak human development results in lowdemocracy levels and consequently poor progress towards democratization. Countryperformance can therefore be classified into four categories: virtuous, vicious and twotypes of lop-sidedness, i.e. lopsided with strong democracy/weak human development(called democracy-lopsided ); and lopsided with strong human development/weak

53 Mahoney (2001).



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democracy (called human development-lopsided )54. In the virtuous cycle democracyenhances human development, which in turn promotes democratization; in the viciouscycle, poor performance on human development tends to lead to poor advances indemocratization which in turn depresses human development achievements, and soon. Where linkages are weak, cases of lop-sided development may occur. On the onehand, human development may not bring about democratization (as in the case of

Cuba for example); on the other hand, democratization may not generate advances inhuman development as it currently persist in most of Latin American countries (andCentral America is not an exception).

Visually, this can be classified comparing countries performance on humandevelopment and democracy using the threshold values of 0.750 for high humandevelopment levels as suggested by UNDP classification, and the average democracyscore for Central American countries in the period 1972 to 2002 (0.574). Dividing thegraphs below in quadrants, countries positioned in the NE quadrant will be in avirtuous cycle, while those in the SW quadrant will be in a vicious pattern. Countriesthat score above the democracy but below the human development thresholds will bedemocracy-lopsided (SE quadrant). Finally, countries that experience human

development-lopsided will have higher human development levels and lowdemocratization scores (NW quadrant).

Graph 7: A Democracy-Lopsided Pattern of Development

0.4

0.5

0.6

0.7

0.8

0.9

1

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

H u m a n D e v e l o p m e n t I n d e x

Composite Index of Democracy

Costa Rica

El Salvador

Guatemala

Honduras

NicaraguaVicious

Human Development

LopsidedVirtuous

Democracy

Lopsided

Source: Own Calculations based on Composite Index of Democracy (see Acuña-Alfaro, 2005) and

UNDP (2005).

Graph 7 suggests a steady transition from a vicious cycle of low democracy and lowhuman development levels, towards a democracy-lopsided pattern of development.

54 The lopsidedness idea is taken from Stewart et al (2000) seminal paper on the linkages betweeneconomic growth and human development.



25

Costa Rica is the exception, positioned itself in a virtuous cycle of democracy andhuman development since the 1980s, though with a small reversal on the quality of itsdemocracy in the early 2000s, but with improvements in human development levels.Of the other four countries, El Salvador seems to be the only one following CostaRica’s trajectory towards a virtuous cycle. Indeed, this country started to differentiatefrom Guatemala, Honduras and Nicaragua in the early 1990s. In contradistinction

from modernization theory assumption, it seems that the Central America countrieshave moved on the opposite direction, strengthening first democratic institutions andprocesses.

Table 5. Central America: Vicious, Virtuous and lop-sidedtrajectories, 1975-2002

1975 1980 1985 1990 1995 2000 2002

Costa Rica D-lopsided D-lopsided Virtuous Virtuous Virtuous Virtuous Virtuous

El Salvador Vicious Vicious D-lopsided D-lopsided D-lopsided D-lopsided D-lopsided

Guatemala Vicious Vicious Vicious Vicious Vicious D-lopsided D-lopsided

Honduras Vicious Vicious D-lopsided D-lopsided D-lopsided D-lopsided D-lopsided

Nicaragua Vicious Vicious Vicious D-lopsided D-lopsided D-lopsided D-lopsided

Note: D-lopsided = Democracy lopsided. The arrows indicate the trajectory of the country movement

from the previous five years. The vertical axes measure human development levels, and the horizontalaxes democratization.

Individually countries followed different trajectories over time. None of the countrieswhich were in a vicious cycle in the 1970s and 1980s stayed in that categorythroughout, but all moved into the democracy-lopsided category. The most obvious isCosta Rica which start from an advantage point in 1975 with higher levels ofdemocracy and human development and moved easier than the rest of the CentralAmerica countries from the democracy-lopsided in the late 1970s and early 1980spattern to the virtuous quadrant in the late 1980s onwards. Honduras and El Salvador,are the first countries in the region to move into the democracy-lopsided category inthe mid 1980s. Though Honduras experienced a brief reversal in the democratic score

in the 1995-2000 period, but always moving within the SE quadrant. El Salvador onthe other hand, from 1975 to 1980 suffered a big reversal in the democratic spectrumwithin the vicious category. In 1985 positioned itself in the democracy-lopsidedcategory amid a civil war, perhaps due to the holding of presidential elections in 1984and 1989 and legislative elections in 1985 and 1988. El Salvador slightly deterioratedits democracy score in the late 1990, but with the signing of the peace agreement in1992 it started to differentiate from the other three countries with an increase inhuman development levels and modest improvements in democratization.



26

The remaining two countries, Nicaragua and Guatemala were the later comers intransiting towards the democracy-lopsided category, respectively. Nicaragua, thoughmade improvements in its democratization score in the mid 1970s, the overthrown ofSomoza and the start of the Sandinista regime in the late 1970s meant a brief reversalin the early 1980s. However the elections in 1984 had an effect on its democratizationscores that made the country move toward the democracy lopsided category as early

as 1985. Guatemala, on the other hand, had a large reversal in its democratic scorefrom 1975 to 1980, to latter continue a pattern of improvements in democratizationand move into the democracy-lopsided category in the late 1990s (table 5 portrays thetrajectories and movements in categories made by the Central American countriesfrom 1975 to 2002).

These findings cast doubts on the directionality and linearity portrayed bymodernization theory claims, as it is through democratic improvements that CentralAmerican countries have and can from now on, cause advances on developmentlevels. Even though reversals to a vicious cycle are always plausible, it is anindication that Central American countries need to invest more resources in thepromotion of human development without loosing sight on the consolidation of

democratic processes. The latest round of elections (presidential and legislative) in2006 are a clear indication that democratic practices are finding strong roots in theregion, however, democracy must provide development dividends in order to survive.Moreover, no Central America country seems to be in a position to transit from ahuman development-lopsided pattern towards a virtuous cycle. At least, if done, itwould have to be done at the expense of democratization.

Conclusions

Democratization has meant a turning point in many aspects in Latin America. Withexceptions, incumbent Presidents and most Congressmen are now elected incompetitive elections under at least minimal standards of freedom and fairness.Central America is not an exception this time. And yet, the democratic quality ofthese “polyarchies” is highly uneven. Scholars have analyzed this cross-nationalvariety by considering democracy as a multi-dimensional phenomenon made up of anumber of conceptually relevant properties that must be present before a polity can bedefined a fully-fledged democracy. The result is a growing field of studies seeking tomeasure and explain what kind of democracies are emerging, while also attempting toidentify the critical factors (i.e. institutional design, development, power distribution)affecting their quality. Several issues still need to be addressed: which institutionalconstraints are most critical in improving the quality of democracy? Do uneven levelsof democracy influence uneven levels of development and inequality? Or is the causaldirection the other way around, with unequal resource distributions affecting the

viability of democratic governance? What role do capabilities and freedoms have inadvancing democracy and human development?

In political terms, it can be said that Central America has experienced a three-foldalteration in just twenty years: i) from war to peace, ii) from peace to democracy, andiii) from democracy to development. The first switch has been largely accomplished,but the second evolution has stalled, as demonstrated by the persistence of anti-democratic enclaves in a number of countries and the lack of accountabilitymechanisms. The third move, from democracy to development is also far from



27

accomplished with poverty and inequality remaining serious problems. This paperexplored and documented each of these three transformations. The main conclusion isthat the prospects for deepening democracy in the region, needs to be done in tandemwith improving the living conditions of the Central American population, andparticular attention needs to be put on the strengthening of human developmentindicators, but more importantly, in closing the growing levels of inequality and

reducing poverty at the local levels.

Central American countries have transited towards a steady process of improvementsin the degree of openness and liberties of the political systems. Elections arenowadays the norm, political institutions have been built and are in a process ofconsolidation, and civil rights and political liberties are broadly respected. Ifcompared with the political situation 20 years ago, it is a sea change in CentralAmerican politics. However, democratization has not yet started to reap dividends forCentral American citizens. The Central American States shall not be seen as thecreators of wealth and democracy as its means, whose end is the individual. In orderfor democracy to survive, it must provide development dividends, otherwise it risksperishing. While it is true that since a country has moved to the democracy-lopsided

categories has not slip back to the vicious quadrant, it is also true that the biggestreversals experienced have been on democratization levels. Thus the risk of returningto a vicious cycle is always latent.

The analysis of the Central American trajectories points to the need to scrutinize theconflicting periods in the movements of countries within and between the categoriesaforementioned. This paper calls for the need to pursue this kind of analysis, byunbundling individual case studies to understand in depth these trajectories. Suchanalysis should focus on the identification of the key turning points for each countrythat help to explain the changes in direction of the arrows in table 5.

If one conclusion is to be drawn from this paper, let it be that democracy should beconsidered a capability – a potentiality. Considering at the individual level capabilitiesare a kind of opportunity freedom, it is not difficult to imagine that at the societallevel, democracy becomes that kind of opportunity freedom through which states andsocieties must navigate. The capability of a person is a “derived notion” that reflectsand focuses on the ability of human beings to lead lives they have reason to value andto enhance the substantive choices they have55. In fact, among the list of centralhuman functional capabilities, two are particularly relevant for this reasoning: (i)

practical reason, defined as being able to form a conception of the good and toengage in critical reflection about the planning of one’s own life, and (ii) control over

one’s environment, in particular politically or being able to participate effectively inpolitical choices that governs one’s life, having the right of political participation,

protections of speech and association and so forth

56

.

At the societal level, democracy is a capability as it focuses and reflects on freedoms.The actual choosing of those freedoms among societal groups leads to different waysof livings. Central America highlights divergent paths and shed light on the argument

55 Sen (1989 and 1997).56 Nussbaum (2000:78-80). Other central human functional capabilities identified by Nussbauminclude: life; bodily health; bodily integrity; senses, imagination and thought; emotions; affiliation;other species; play and material control over one’s environment.



28

that democracy by itself is not enough to generate sustained advances in humandevelopment. However, it is a necessary condition for human development. Forexample, in Costa Rica, political elites agreed earlier to expand freedoms that weregrasped by the polity. This had an almost direct relevance to the well-being of itspopulation, and an indirect role influencing economic outcomes and social changes,as the country progressed maturing its development model. In El Salvador, on the

contrary, political elites chose repression over democracy, with brief interludes orpatchy attempts to expand freedoms that could not be positively grasped by the polity.The restriction of freedoms made dormant the development model until the re-start ofthe democratisation process in the early 1990s. Costa Rica then is an example of atransition from a democracy-lopsided pattern of development to a virtuous one; whileEl Salvador, Guatemala and Honduras moved from vicious to democracy-lopsidedpatterns.

Democracy by itself cannot guarantee human development. Yet, there cannot behuman development without democracy that guarantees a minimum of freedoms forthe individual to choose among.

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