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Democratization and Human Development:

How an idea on the former transformed the latter and challenged modernization theory in Central America

Jairo Acua-Alfaro* DPhil candidate in Development Studies Queen Elizabeth House / Department of International Development Latin American Centre, St. Antonys College, University of Oxford jairo.acuna@sant.ox.ac.uk

Paper to be presented to the 2007 International Conference of the Human Development and Capability Association (HDCA) Ideas Changing History 16-20 September 2007 New School, New York City

COMMENTS AND SUGGESTIONS ARE WELCOME Please e-mail to jairo.acuna@st-antonys.oxford.ac.uk, jairo.acuna@gmail.com

This paper is possible thanks to the Ronaldo Falconer Scholarship 2004 2007, at St. Antonys College, University of Oxford. All comments and errors are my own responsibility.

How an idea on the former transformed the latter and challenged modernization theory in Central America

Democratization and Human Development:

Abstract
This paper argues that democracy should be considered a capability a potentiality. 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 ways of livings. Central America highlights divergent paths and shed light on the argument that democracy by itself is not enough to generate sustained advances in human development. 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 state agreed on economic cooperation and a framework for peaceful conflict resolution. This process defined a number of measures to promote national reconciliation, an end to hostilities and democratization. Yet, while democracy was advanced, human development levels experiences a small net gain; perhaps confirming that democracy does not serve as an automatic remedy of ailments as quinine works to remedy malaria. The opportunity it opens up has to be positively grabbed in order to achieve the desired effect1. This paper evaluates the effect of prescribing democracy as a remedy that contributes to cause advances in human development in Central America. In doing that, it builds upon a novel Composite Index of Democracy (CID) for 1972-2002. The first part deals with the regions democratic performance under the CID and the strengths and weaknesses of each of its attributes. The second section exposes Central Americas development record from the perspective 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, are moving towards a democracy-lopsided pattern of development. That is, besides remarkable advances in the democratization trajectories, human development trajectories portray a small net gain. The paper scrutinizes a series of key issues regarding Central Americas development (human, economic and political) processes in the last thirty years. It evaluates the trajectories of democracy' s contribution towards human development in Central America from 1972 to the present. Such an evaluation has become urgent. After the peace was established in the late 1980s social science research has commonly neglect Central America as a focus region despite its distinctive features and comparative potential for the rest of Latin America and developing countries. Keywords: Democratization, Human Development, Political Economy, Modernization Theory, Latin (Central) America.

Sen (1999a:155).

Introduction Democracy promotion has become a major foreign policy for industrialized nations since 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, international institutions, and private foundations today that are investing millions of dollars on aid to 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 unhelpful poles of extreme skepticism while the vast majority of citizens in aid-providing countries have little awareness of the democracy-building efforts their governments sponsor.2 Democracy certainly has complex demands and human development is a multifaceted process 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 to be no agreement in the academic and policy-making literature on whether causality can be corroborated or whether both processes are compatible and complementary. Indeed, for the Nobel Laureate in Economics Amartya Sen, democracy does not serve as an automatic remedy of ailments as quinine works to remedy malaria. The opportunity it opens up has to be positively grabbed in order to achieve the desired effect.3 Though 18 Latin American nations may have experienced a successful democratic transformation in the last decades, it is not clear yet how democracy has caused advances in terms of human development. Specially, since the main problem confronting democracy is not its sheer durability but rather a full array of problems such as poor economic and social performance, weak states, high crime rates, and citizen disgruntling.4 Within this context, Central America is a unique region for the study of democratization and human development, given its small geographic area, its contrasting 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 state agreed on economic cooperation and a framework for peaceful conflict resolution. This process defined a number of measures to promote national reconciliation, an end to hostilities, democratization, free elections, the termination of all assistance to irregular forces, negotiations on arms controls, and assistance to refugees. In sum, this was a plan to promote peace and democracy on the Central American isthmus during a time of great turmoil and outside influence in the midst of the Cold War. Crudely speaking, modernization theory assumes that democracy is the crowning achievement of development processes, and as such it comes at last in a series of
2 3

Carothers (1999). Sen (1999a:155). 4 Mainwaring and Perez-Lian (2005).

development steps. The central insight of modernization is that socioeconomic development brings systematic changes in political, social and cultural life5 in rather predictable ways. Moreover, a recently revised version of modernization theory argues that human development makes democracy increasingly likely, where it does not exist, and increasingly responsive, where it is already in place6. Yet, this proposition assumes a causality on the relationship between democracy and development and this paper argues that democratization and human development are both complex and multidimensional processes, involving human cooperation. In fact, the evaluation of the Central American trajectories cast doubts on the linearity of modernization theory. In that sense, the proposition to be advanced in this paper is that Central American countries are moving towards a democracy-lopsided pattern of development. That is, besides remarkable advances in the democratization trajectories, human development trajectories portray a small net gain. The paper scrutinizes a series of key issues regarding Central Americas development (human, economic and political) processes in the last thirty years. Such an evaluation has become urgent, since after the peace was established in the late 1980s social science research has commonly neglect Central America as a focus region despite its distinctive features and comparative potential for the rest of Latin America and developing countries. The method applied for this paper consists of a review of a sample of studies and writings on the evolution of democracy and development strategies and indicators in Central America. The approach will be comparative, identifying the political and economic asymmetries of these countries, which in the last three decades have shown substantial differences among their democratization and development indicators. The paper is structured in three sections. The first section evaluates the trajectories of democracy' s contribution towards human development in Central America from 1972 to the present. This section details the mutation of democracy and its attributes using the Composite Index of Democracy (CID)7, as well as presents its value in contrast to existing alternative measures. The evaluation includes the unpacking of democracy attributes in order to portray the individual evolution of each attribute in a troublesome region. Then, the second section is in a position to assess development performance since the 1970s with the purpose to demonstrate the social and economic restrictions upon which democracy has had to operate at various levels. Clearly, there exists a connection between democracy and human development. As such, the third section shifts the focus of the analysis to bring together the political and developmental aspects. It explores the empirical connections between democracy and human development using a typology of country cases, some representing the mutual enhancement of democracy and human development and some demonstrating asymmetric performance8. This section investigates the movement of Central American countries from one category to another that suggests a strong democracylopsided pattern of development in the isthmus. The final section concludes that at the societal level democracy is a capability, and points to the need to scrutinize
5 6

Inglehart and Welzel (2005:46). Idem, p.76. 7 See Acua-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 links between economic growth and human development.

conflicting periods in the movements of countries within and between the patterns of development. 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 measurement problems. Three examples from the general to the specific measurement of democracy in Central America are briefly discussed below. At the worldwide measurement level the seminal work of Przeworki and colleagues, treats democracy as an all-ornothing process. Democracy is measured as a dichotomous variable, linked to the proverbial statement that women are either pregnant or non-pregnant10. The coding then assigns observations the values of 0 whenever each country is not a democracy in a given year and 1 otherwise. Even though, this classification is highly correlated with other continuous measures of democracy, this clearly leaves no room for the discussion of marginal changes in the direction of democratization processes. Another example following this analogy is Boixs study of democracy and redistribution. When computed into the data, Boix defines democracy when a country has 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 responsible either 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 the right to vote11. Thus, a review of his data appendix suggests some possible measurement errors. For example, Costa Rica is ranked as authoritarian from 1938 to 1947. Yet, the 1940 and 1994 elections were not problematic as the 1948 one that led to the civil war, the overthrown of the government and the establishment of a de-facto Government Junta for eighteen months thereafter. In fact, the de-facto government led to the formation of the Second Republic and started the consolidation of democracy. Also on Nicaragua, it is ranked democratic from 1984 when the peace process was signed in 1986 and the Sandinistas continued to rule the country until 1990 after the elections. Nicaraguas transition in 1984 was from an autocratic regime to a Presidential system, not necessarily a democracy. A third example is Bowman, Lehoucq and Mahoney12, who attempt to categorize long term comparison of democratic trajectories. BLM in an effort to overcome deficiencies inherent in binary classification produced an alternative tri-classification of political democracy in Central America from 1900 to 2000. BLM coded countryyears vis--vis their fuzzy-set membership13 in the category of political democracy using a three level scale: 1.00 represents full membership (democracy); 0.50 represents 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 index comprises five dimensions: broad political liberties, competitive elections, inclusive participation, civilian supremacy and national sovereignty.

ODonnell (2007:6) and Whitehead (2002). Przeworski et al (2000). 11 Boix (2004:66) 12 Henceforth BLM (2005). 13 Following Ragin (2000).
10

Figure 2 shows the patterns of political democracy suggested by BLM. As can be seen the first half of the twentieth century was very unstable in the lower end of their categorization, as none of the five Central American countries achieved full membership to democracy. It captures well Costa Ricas democracy interlude in 1917-1919 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 Ricas full democracy was achieved only in 1975 with the incorporation of the communist party to the political and electoral processes. Moreover, countries like El Salvador, Guatemala and Honduras experienced very brief periods of democratic hope in the 1944-47 period. In April 1944 for example, Hernndez-Martnez in El Salvador amended the constitution to permit himself a fourth term in office, disenchanting officers from the army and air force leading them to stage a coup, and then breakout a non-violent insurrection in the spring of that year. Indeed, after Martinezs fall, democracy seemed to be on the political horizon in El Salvador. Provisional President Menendez lifted the state of siege, issued general amnesty for political prisoners, and abolished Martinezs personal secret police force14. 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 can be noted. Four countries were assigned a full membership to democracy at different times, 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 was assigned by the researchers a score of 0.50, neither democratic nor authoritarian. Although this index captures neatly the regions political democracy evolution in the twentieth century, it is too restricted to political / electoral dimensions of democracy and is not capturing the institutional complexities that allows for the functioning of democracies. What seems to be important in the understanding of democratization in Central America, during the early twentieth century was the short 1944-1948 period, where four out of five countries experienced civic movements or democratization attempts. Three of them ended harsh military regimes, with the fall of generals Martnez, Ubico and Caras in El Salvador, Guatemala and Honduras, respectively. The other case was Costa Rica, where an electoral fraud was the trigger of a short civil war. Of these movements, only the latter was successful in the transition towards democracy and still prevails nowadays. The other three countries reverted to military authoritarian regimes and Nicaragua continued under the leadership of the Somoza dynasty. From then, it followed a period of repression and military dictatorship, until the Cold War conflict heated up in the 1980s in the Central American isthmus and civil wars erupted.

14

Mahoney (2001:208).

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


C o sta R ic a 0 0 0 .5 1900 0 .5 0 .5 0 1905 0 0 .5 0 .5 0 .5 0 .5 1910 0 .5 0 .5 0 .5 0 .5 0 .5 1915 0 .5 0 0 0 0 .5 1920 0 .5 0 .5 0 .5 0 .5 0 .5 1925 0 .5 0 .5 0 .5 0 .5 0 .5 1930 0 .5 0 .5 0 .5 0 .5 0 .5 1935 0 .5 0 .5 0 .5 0 .5

E l S a lv a d o r 0 0 0 1900

0 1905

0 1910

0 1915

0 1920

0 1925

0 1930

0 1935

G u a te m a la 0 0 0 1900

0 1905

0 1910

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0 1935

H o n d u ra s 0 0 1900

0 1905

0 1910

0 1915

0 1920

0 1925

0 .5

0 .5 1930

0 .5

0 .5

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N ic a ra g u a 0 0 1900

0 1905

0 1910

0 1915

0 1920

0 1925

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C o sta R ic a 0 .5 0 .5 0 .5 1951

0 .5

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0 .5

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1 1965

1 1970

1 1975

1 1980

1 1985

1 1990

E l S a lv a d o r 0 0 0 1951

0 1955

0 1960

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0 1980

0 1985

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G u a te m a la 0 .5 0 .5 0 .5 1951

0 1955

0 1960

0 1965

0 1970

0 1975

0 1980

0 .5 1985

0 .5

0 .5

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H o n d u ra s 0 0 1951

0 1955

0 .5

0 .5

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0 .5

0 .5

0 .5

0 1965

0 1970

0 1975

0 1980

0 .5

0 .5

0 .5

0 .5 1985

0 .5

0 .5

0 .5

0 .5

0 .5 1990

N ic a ra g u a 0 0 1951

0 1955

0 1960

0 1965

0 1970

0 1975

0 1980

0 .5 1985

0 .5

0 .5

0 .5

0 .5

1 1990

N o n -D e m o c ra c y

0 .5 S e m i-D e m o c ra c y

F u ll D e m o c ra c y

Source: Bowman et al (2005).

The authoritarian culture in Central America defined political opponents as foes and used the force and coercion as the method, in an attempt to violently avoid any form of opposition. When sporadic and individual actions occurred (as weak attempts to democratize), punishment, repression and political persecution were the reactions from the authoritarians, either traditional dictators or militaries15. Nothing much changed 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 by Nicaragua in 1978/79 and last in El Salvador by 1979/80. Guerrilla forces with different characteristics confronted the repressive governments of Central America and their US supported armies during the 1980s. During 1986 and 1987, the "Esquipulas Process" was established, in which the Central American heads of state agreed on economic cooperation and a framework for peaceful conflict resolution. The "Esquipulas II Accord" emerged from this and was signed in Guatemala City by the five Presidents on August 7, 1987. This agreement defined 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, democracy and freedom (Chapter 9), verification and international follow-up (Chapter 10), and a specific road map (Chapter 11). In subsequent years, Esquipulas laid the groundwork for the 1990 Oslo Accord, a preliminary agreement between the Guatemalan National Reconciliation 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 signing of a general peace agreement in El Salvador in 1992. Undoubtedly, Central America today is different than the hybrid regimes16 of two decades ago. Clearly, how different they are and the precise nature of their individual characteristics cannot be analyzed using binary measures of democracy. Democracy should be considered as a matter of degree, spanning a continuum. As such, this paper uses an alternative Composite Index of Democracy (CID) as an aggregate and continuous indicator for the three main attributes of democracy. This measure captures marginal changes in the direction of democratization processes in Central America, 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 turmoil in the region, with the exception of Costa Rica with a high score of 0.8 (on a scales of 0 to 1), but later decreasing in the early 1990s. Guatemala is perhaps the country that suffers 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 Central Americas worst civil war. Honduras on the other hand, followed Costa Rica in the democratization path as early as 1980, and El Salvador even though confronted a crude civil war in the 1980s, it seemed to have started its democratization process as early as 1983, with a new Political Constitution. Nicaragua, on the other hand, as a result of the Sandinista take over of power in 1979, during the 1980s showed an
15 16

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

unstable democratization process, but with the elections in 1990, when the Sandinistas surprisingly conceded defeat and gave power to Violeta Chamorro, its democracy indicator tended to stabilized, even though experienced a brief deterioration in the 1993-95 period. However, borrowing Linz and Stepans famous dictum, since 1996, with the ascendancy of Guatemala to democracy in the region, it seems it has become the only game in town.17 Graph 1. Central America: Composite Index of Democracy 1972-2002
1.0 0.9 0.8 0.7 Honduras 0.6 El Salvador 0.5 0.4 0.3 Nicaragua 0.2 0.1 0.0
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Costa Rica

Guatemala

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

Unpacking democracy attributes Yet, democratization as an open-ended process needs to be evaluated at the middle level of generalization (neither in minimalist nor maximalist. For that purpose, what is needed is to unpack the democracy variable to understand the individual evolution each attribute has had in the last thirty years. Since Central Americas transition towards democracy has proven complex, diverse, manifold, simultaneous and unfinished18. Table 2 shows the democratic transformation in Central America from the 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, the transformation is more remarkable, see parenthesis in the table). The Central American countries awoke in the 21st Century from a nightmare of decades of authoritarian repression and presenting a strikingly different situation. The changes are 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).

democratization processes. Also, they are remarkable given the short period of time in which they took place, along with the fact that they have taken place in some of the continents poorest countries, in the midst of civil strife, and with the end of the Cold War having a less-than-expected impact19. Table 2. Democratic Transformation in Central America
Variable Composite Index of Democracy Year 1978 2002 Mean (.286) (.663) Democracy Attributes Open and Participatory Environment Institutional / Political Environment Collection of Rights and Liberties 1978 2002 1978 2002 1978 2002

.407 .697 .169 .286 .4 .9

Std. Dev. (.081) (.052)

.278 .088 .173 .103 .358 .061 .280 .151

Min. (.187) (.587)

.187 .587 0

Max (.359) (.706)

.890 .834 .451 .397 1 1

Obs. 5 (4) 5 (4) 5 (4) 5 (4) 5 (4) 5 (4) 5 (4) 5 (4)

(.099) (.274) (.25) (.875) (.416) (.646)

(.085) (.115) (.147) (.028) (.117) (.104)

(.133) (.1) (.85) (.333) (.5)

.133 .1

(0)

(.202) (.397) (.45) (.9) 1 (.583) (.75)

.85

.533 .700

.333 .5

.917

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

A simple way to show this transformation graphically is though box-plots. These graphs examine the distribution of democracy across the entire region and in each country individually. The wider the box, the greater the variation experienced. As expected, since 1972 Costa Rica presents the most stable case at the upper democratic scoring, with the other countries showing a greater variation in time. Furthermore, the cases of Costa Rica and El Salvador to some extent show the 95th percentile stretched out away from the box. This may suggest a negative skew or that the rankings for these two countries tend to be lower than expected. In comparative perspective it is interesting to note that when plotted graphically the democracy scores (Composite Index of Democracy, CID) with each of its three attributes, differences in types and degrees of democracies are revealed. At the general level, it is appealing to notice that the three attribute measures follow the same pattern as an indication that the three attributes of democracy run in parallel and they are measuring related attributes within different political regimes. Throughout the period under study Latin American countries rank consistently lower in the open and participatory environment attributed of democracy. Also, from 1972 to 1985 on average the region achieved higher scores in terms of the collection of rights and

19

Karl (1995:72).

10

liberties, but from 1985 onwards, institutional / political environment has gained prominence20. Graph 2. Box-Plots of Democratic Transformation in Central America, 1972-2002
Central America
1

Costa Rica

El Salvador

Democracy

.2

.4

.6

.8

Guatemala
1

Honduras

Nicaragua

Graphs by Country

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

Furthermore, when grouped in Latin American subregions, the five Southern Cone countries from 1984 onwards score consistently higher scores on the electoral organization aspects of democracy (participation and competition) than the Central American and Andean counterparts. Central America21, since 1979 scored higher institutional rankings than freedoms and in the Andean countries the difference between 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, but from 1990 onwards perform slightly better than the other two sub regions (Can this finding be attributed to the indication that the transition period and the consolidation of democracy in these countries yielded better dividends?). In terms of electoral

20

21

Includes Costa Rica and thus it is pushing up the indicators. When Costa Rica is excluded from the analysis, the measures reduce systematically, as shown in the table 2.

This is opposite the case of the East Asia and the Pacific region, where countries have systematically obtained higher procedural scores than substantive, accentuated from 1976 onwards. The Eastern Europe and Central Asia region suggests a clear example of the domino effect from the Berlin Walls fall, when in 1989 most of the countries embraced democratic regimes. However a word of caution seems relevant here which challenges the reliability and validity of these indicators. It is interesting to note that in the span of one year, as per magical effects, the entire region became democratic. The Middle East and North Africa is perhaps the only region where democracy and its attributes still are lagging behind, and it has not yet even reached the minimum threshold assigned to each democracy attribute.

.2

.4

.6

.8

11

democracy, the three subregions scored their lowest levels in the late 1970s and early 1980s. Graph 3. Democracy and Attributes by Subregions in Latin America
Latin America: Democracy Attributes 1972-2002
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Central America: Democracy Attributes 1972-2002


Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua
1.0 0.9 B C Democracy

B 0.8 Democracy 0.7 0.6 C 0.5 0.4 0.3 A 0.2 0.1 0.0 A

1972

1973

1974

1975

Andean: Democracy Attributes 1972-2002


Bolivia, Colombia, Ecuador, Peru, Venezuela
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

1976

Southern Cone: Democracy Attributes 1972-2002


Argentina, Brazil, Chile, Paraguay, Uruguay
B Democracy 1.0 0.9 0.8

Democracy C

0.7 0.6 0.5 C

0.4 0.3 0.2 0.1 A


1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

0.0

(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 Acua-Alfaro, 2005).

How can these findings be interpreted for the Central America context? Does it mean that during the transition period governments were initially more concerned with the freedoms attribute (political rights and civil liberties), and lately the emphases shifted to institutional rules and opportunities for contestation? Or is it a reflection of the elasticity of the measures used? The latter might simply be that outputs, such as political rights and civil liberties or perceptions thereof are less elastic than processes and institutional arrangements, and more difficult to change22. Yet, the purpose of the CID is not to rank countries in a scale and compare them from more autocratic to more democratic. The objective is not to grade countries (i.e. to say that Costa Rica is more democratic than El Salvador or Venezuela), but to group sub-regions/countries in categories according to their democratic attributes performance. A grouping as such, permits highlight divergent cases when the indicators differ at some points in time. For example, although the three indicators or attributes are highly correlated (as they should be), within some countries the attributes direction diverge, at given years. In the case of Central America, Guatemala and Nicaragua highlight divergent cases on the ranking of democracy attributes. In Guatemala, the freedoms and institutional indicators diverge from 1984 onwards, and Nicaraguas indicators shows contradictory patterns as well from 1989 (the year before the electoral defeat of the Sandinista government), with the institutional indicators stabilizing at the level of 0.900 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.

1977

1978

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2002

0.0

increasing again to the point of 0.750 in 1998 to drop down again to 0.675 in 1999. In terms of electoral democracy the indicator captures neatly how after the 1979 overthrown of Somoza, the Sandinista regime impede participation and competition of political parties, until the 1984 election that saw Daniel Ortega win the Executive for the first time. Graph 4. Democracy and Attributes by Countries in Central America
Costa Rica: Democracy Attributes 1972-2002
B 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 A Democracy C 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

El Salvador: Democracy Attributes 1972-2002

B Democracy

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

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2001 2001

Guatemala: Democracy Attributes 1972-2002


1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 A C B 1.0 0.9 0.8 Democracy 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0
2001 2002 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Honduras: Democracy Attributes 1972-2002

B C Democracy

Nicaragua: Democracy Attributes 1972-2002


1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1
2001 2002 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

B Democracy

(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).

0.0

El Salvador on the other hand is an interesting case. It clearly shows how the collection of rights and freedoms started markedly to deteriorate in 1975 and led to the 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. The electoral attribute even reached the lowest possible classification as formal democracy was absent from 1980 until 1984 with the new elections that saw Jos Napolen Duarte win the Presidency that had lost earlier. Yet, the institutional attribute seems to have been given priority by the Executive since the early 1980s. As the indicator shows, a steady increase can be observed from 1978 with a score of 0.20 to 1984 with a score of 0.80, signalling the drafting of the new Political Constitution in 1983 that meant the strengthening of institutional aspects of the polity. Honduras sees the transition to democracy enhanced as early as 1981 when the electoral attribute jumps from 0 to 0.31, in tandem with the recuperation of the

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2002

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1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2002

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, the case of Costa Rica confirms its exceptionality in the region, since all three democracy attributes indicators show the highest level and smallest variance in the entire period from 1972 to 2002. Central America has entered a new phase of democratization. The structural barriers to democratization were recognized at the highest political level during the Esquipulas peace process. At the Esquipulas II Agreement it is expressively mentioned for the first time in history the Presidential compromise towards democracy in the region. Items 3 and 4 in the Agreement exhort to undertake a pluralistic and participative democratization process, respect for Human Rights and the celebration of free, pluralist and honest elections. Furthermore, the Central American Alliance for Sustainable Development (ALIDES) signed in 1994 by the Central American Presidents reinforced their previous commitment as democracy was included as one of its seven principles and the first base for sustainable development23. Indeed, democracy is nowadays a constitutional guarantee in all five Central America countries24. Yet, given this remarkable democratic mutation, a puzzling question that needs to be addressed is why Central Americans are so unsatisfied with democracy25. Public opinion studies show a tendency of dissatisfaction with democracy in the last ten years. Latinobarmetro26 data show a downward trend in terms of public satisfaction with democracy, commonly associated with government performance27. For example, after an optimist rise in the satisfaction towards democracy from 1996 to 1997, almost a decade later, on average, Central Americans had a 49% of satisfaction with democracy, declining to 32% in 2004. As can be seen in graph 5, individually, Costa Ricans satisfaction decreased from a regions record of 68% in 1997 to 47% in 2004; El Salvadors decreased from 48% to 37% respectively (even though it scored a record 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% in the same period. In fact, in all Central American countries, the proportion of citizens unsatisfied with democracy is more than those satisfied with it, including a lack of trust in political parties28. Although, satisfaction with democracy is conceptually distinct from support for the system these results are also consistent with UNDPs 2004 report on Democracy in Latin 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 and development and in particular it aimed to strengthen rule of law and democratic institutions. 24 Estado de la Regin (2003). 25 Perhaps the first Central American analyst to stress this democratic dissatisfaction was Rodolfo Cerdas, with his 1993 publication El Desencanto Democrtico (The Democratic Disenchantment). Even though his focus was merely on political parties, it was a first call of attention to the forthcoming citizen perception on the functioning of democracy and their governments in Central America specifically, and Latin America generally. 26 Latinobarmetro 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).

14

and acceptance of values, such as freedoms and tolerance, the support for democracy suggests a support to the government system. In that sense, it is not surprising to see that UNDPs Support to Democracy Index is highest in Costa Rica at 53.8% and lowest 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 between 61% and 53%, respectively, preference for democracy in Central America also underwent a downward trend, from 63% in 1996 to 50% in 2004. Graph 5. Central America: Satisfaction towards Democracy, 1996-2004
80

70

60

Percentage

50

40

30

20

10 1996 1997 1998 1999/2000 2001 2002 2003 2004

Costa Rica

Honduras

Nicaragua

Guatemala

El Salvador

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

In political terms, even though none of the authoritarian regimes of the 1980s prevailed by 1999, elections are held regularly as free and fair events and citizen have the liberty to express their views and opinions without being persecuted, the democratization impulse has lost dynamism, and some reversals had occurred by 2002, signalling that the democratization of the political regimes in the region is still an unfinished business. For instance, the electoral systems in some countries still present inequalities on competition, including the weakening of campaign financing rules29, proportional representation at the local level (i.e El Salvador, where the winning 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 better guarantee citizen oversight over the military30. But more importantly, institutional deficiencies are common in the functioning of democratic institutions.
29 30

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

15

The next section exposes Central Americas development record from the perspective of human development. Considering that the development and strengthening of democratic regimes rely not just on political will, but also on economic resources, administrative capabilities and technical skills31, the section turns to the development performance of Central America since the 1970s. The intention is to demonstrate and to understand the economic environment and restrictions upon which these political institutions have operated at various levels in Central America. Assessing Development Performance since 1970 Munros characterization of the isthmus development backwardness deserves to be quoted at length. After an extensive period of fieldwork across the region, he concluded that: The backwardness of the five republics of Central America was in large part due to the isolation in which they were kept by Spain during the three centuries of their existence as colonies. Their development was restricted until the beginning of the nineteenth century by a misguided policy which made progress almost impossible the economic development of the five republics was held back by internal conditions, for the political disturbances which characterized their first half century under republican institutions, and which are still prevalent in some of them, made large scale agriculture difficult and unprofitable, and discouraged commerce. The civil wars often drew laborers away from plantations at the time when their services were most needed, and caused a periodic destruction of property and a laying waste of planted fields. In Guatemala, Costa Rica and Salvador [sic], where revolutions have been less common during the last generation, the wealthier classes have become very prosperous through the production and exportation of coffee, but Honduras and Nicaragua, because of the almost continuous fighting between rival factions, are today but little better off than in 182132. This paragraph could have well been written at the dawn of the twenty-first century and with a few clarifications, it resembles the path travelled by Central American in terms of development opportunities. The internal conditions and political disturbances mentioned by Munro kept impeding the Central American countries to invest in more profitable activities and promote human development more actively. Although the liberal elite believed in the notions of progress and economic development and sought to integrate the Central America countries with the rest of the world, the political systems that were set up came to be known as republican dictatorships33 with variations for each country34.

31 32

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

16

Historically, development in Central America has been blocked by elite-class alliances between the export sector and the governmental hierarchy35. Yet, it is no surprise that in the second half of the twentieth Century the prevalence of military governments: Guatemala having the most with a total of 36 years of military dictatorship, followed by Nicaragua with 28 years of armed rule and 10 of the military-civilian type; El Salvador with 25 years of military rule and 5 militarycivilian, and finally Honduras, with a total of 19 years of military occupation. Costa Rica is the single exception with a total of 50 years of civilian governments. Seligson noted the region suffered an almost unbroken chain of dictatorial rule and military domination in which civil rights, popular participation and governmental accountability have been conspicuously absent36. This means nothing more that citizens needs and desires have been extensively ignored by their rulers, as well as national sovereignty has been narrowed by heavy-handed and repressive foreign states and powerful trans-national corporations. In fact, during the 1970s and 1980s the Central American armies were stimulated to perform activities outside their traditional tasks of sovereignty defence and law and order, for example. They incurred in banking and educational duties and assumed the role of civil police, showing a high degree of corruption and perversion of its original boundaries. The Central America economy thus became thoroughly dependent on the export of two agricultural commodities, depending almost entirely to the fluctuations of international trade. When coffee and banana prices went down, earnings also went down, with the poor peasants suffering the heaviest burden and leaving governments little room for manoeuvre. This strategy discouraged industrialization in Central America, given the shortage of a middle-class labor since most of the population were peasantry37, and that the bourgeoisie-elite controlled government policies. In addition, the small scale of national markets presented another major obstacle to industrialization. The Central America Common Marker (CACM) created in 1960 attempted to overcome these shortages. CACM aimed to stimulate a two-fold strategy to promote free trade among member countries and create common tariffs to protect infant enterprises38. The creation of the CACM led to a period of significant growth in the isthmus, and commerce multiplied, growing from 7.5% in 1960 to 26.9% by 197039. Yet, the economic success of the new commercial strategy soon faced the political reality of the region. A dispute between Honduras and El Salvador in 196940 meant
35

Like the type of regimes suggested by Huntington (1968), but contrary, in the Central American context it has been proved that they have not promoted development as his revised-modernization theory 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 came late 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 ftbol, in Spanish). It was a five-day war caused by political differences between Hondurans and Salvadorans, including immigration from El Salvador to Honduras. The name derives from the timing of the war, which overlapped with rioting from a series of football matches between the national teams of these two countries. Essentially, both sides lost the war; neither gained a decisive military victory and the death toll of approximately 2,000 was shared approximately equally between the two. The war led to a suspension of the Central American Common Market, yet the social situation worsened in El Salvador

17

the CACM lost a good deal of precious momentum and failed to recuperate and embark the isthmus on the path of import-substitution industrialization, as the CACM made little headway into the agricultural sector, and protectionist policies remained the rule. It also failed to meet the challenge of unemployment and the build up of likeminded government coalitions. Indeed, while in the 1950s and 60s intra-regional trade was 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 to less than 20%41. The extension of democracy has increased the freedoms of citizens across the region to express their views, choose their leaders, organize politically, and gain access to information about their government42. It should not be surprising, unexpected or necessarily unhealthy that citizens in new democratic systems tend to be unsatisfied with the regimes performance. However a distinction must be made on the source of this lack of satisfaction with democracy. As has been mentioned along this section, Central America has experienced a remarkable democratic transformation in a very short period of time (see table 2 and graph 1). Perhaps no other region in the world has been able to peacefully resolve prolonged civil wars through a combination of regional and national actions, not derived from political or military interventions. This can be summarized in the unique three-fold mutation experienced in less than twenty years: (i) from war to peace (even though violence and citizen security remain a serious problem in post conflict countries like El Salvador and Guatemala); (ii) from peace to democracy (though still unfinished with the persistence of authoritarian enclaves in El Salvador, Guatemala and Nicaragua); (iii) from democracy to development (perhaps the most retarded and requires longer term strategies, since Nicaragua and Honduras remains the two poorest countries in Latin America and Guatemala is among the most unequal in the world). Yet, despite these significant accomplishments, there is still reason for disappointment with respect both the results and processes of democratic governance in the region43. For example, in eight of the 18 Latin American countries, the average citizen was worse off in 2000 than in 1980, including three of the five Central American countries (Guatemala, Honduras and Nicaragua). Though, improvements in education and health meant improvements in terms of the overall human development index. That is, even though Central American democracies are not necessarily prosperous in terms of per capita income, during the last twenty years they have become more congenial places to learn and live. Central America thus made little progress in terms of economic development. Graph 5 depicts the real gross domestic product per capita between 1950 and 2002 for all five Central 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 capita GDP during the 1960s (even higher than Costa Ricas). During the late 1970s the benefits of democratization started to pay dividends, since Costa Ricas income expanded 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).

18

Nicaragua and El Salvador respectively. Thus, while three decades ago Nicaragua had the 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 able yet to improve income indicators and lagged behind during the second half of the Century. Graph 5. Central America Real GDP per capita (US$ current prices)
9000 8000 7000 6000 5000 4000 3000 2000 1000 0
1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
1800

Central America: Real Gross Domestic Product per Capita ($ in Current Prices)
Costa Rica

El Salvador Guatemala

Nicaragua Honduras

1600

2002

Nicaragua

1400 Costa Rica 1200 El Salvador 1000

800

Guatemala

600

Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.2, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, September 2006.

400

Honduras

200

0
1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

Yet, development is a multidimensional process that goes beyond income or monetary considerations. Bulmer-Thomas noted in the late 1980s that as measured by the growth of Gross Domestic Product per head, the regions performance compares favourably 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 the isthmus not even Costa Rica is political stability assured44. This argument summarizes the paradoxes of Central Americas development since the collapse of the Central American Common Market. On the whole, with the confrontations in the 1970s and 80s, a new developmental challenge started. In face of the challenges of globalization, Central America re-started a democratization process. Prior to the lost decade for Latin America, an impressive Central American economic model was based on three pillars: (i) rapid growth of traditional exports; (ii) a strong regime of exchange rates, and (iii) the establishment and functioning of the CACM45. But, surprisingly for most Central Americans, this model collapsed in the 1980s, especially for political reasons. Indeed, a review of the political economy of Central America in
44 45

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

19

the 1980s, identified that the seeds of the crisis, could be explained by four interrelated causes: (i) political unrest, (ii) uneven development, (iii) structural flaws in development strategies, and (iv) global recession46. It is widely known that the context for economic development in Central America during 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 infant mortality, life expectancy at birth, access to potable water, malnutrition, illiteracy and persons per doctor that were worse than those for Latin America47. However, it may be said that according to social indicators, besides the bad performances at the end of 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 the Central American countries in economic terms. Indeed if one looks at the growth rates, it can be noticed that since the early 1970s the economic performance of these countries was very unstable, starting a dangerous decline in 1977 which reached its lowest 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 around 2.5 million displaced. Indeed 1979 has been identified as the historical moment, which marked a watershed in the sub-regions development and the beginning of the worst economic crisis, even deeper than the 1930s48. Finally, it may be noted that it is not 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
85
140

Infant Mortality rates


120

80

75
100 Per 1,000 live births

70 Total (years)

80

65

60

60

40

55
20

50

45 1960 1970 1980 1990 1995 2000 2004

0 1960 1970 1980 1990 1995 2000 2004

Costa Rica

El Salvador

Guatemala

Honduras

Nicaragua

Latin America

Source: World Development Indicators and HPNstats, World Bank

One fact that needs to be stressed is the modest improvements made in terms of health and educational attainments. This is crucial in terms of the human development
46 47

See Feinberg and Bagley (1986). Dunkerley (1994). 48 Bulmer-Thomas (1987). 49 This last phenomenon can be correlated with the signing of Esquipulas II the peace treaty that began the pacification for the region and hence initiated the democratic transition, and a more coherent development process.

20

perspective, since, it is believed that with more education and health, more development; in the sense that with an educated and healthy population the possibilities to innovate, create and entrepreneur are increased. Indeed, just a look at the development of both indicators over the long run, shows that the region has achieved better standards. On average, today Central Americas manage to live around 20 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 is the country that tends to converge with the region overall by 2000. Table 3. Central America: Educational Attainment, 1960-2000
First Level No Schooling Costa Rica 1960 17.7 1970 20.6 1980 14.5 1990 10.8 2000 9.4 El Salvador 1960 61.8 1970 54.2 1980 36.0 1990 37.1 2000 35.0 Guatemala 1960 69.2 1970 68.4 1980 54.7 1990 52.9 2000 47.1 Honduras 1960 60.9 1970 61.9 1980 49.0 1990 31.9 2000 25.9 Nicaragua 1960 59.0 1970 53.9 1980 48.9 1990 41.3 2000 31.7 Central America 2000 26.6 Latin America 2000 17.7 Source: Barro and Lee (2000). Total Complete Highest Level Obtained Second Level Total Complete Post-Secondary Total Complete Average Years of School 3.86 3.61 4.70 5.57 6.0 1.70 2.29 3.30 3.58 4.5 1.43 1.49 2.34 2.60 3.12 1.69 1.70 2.33 3.69 4.08 2.09 2.59 2.86 3.60 4.4 5.0 5.7

(Percentage of the population aged 25 and over) 72.8 68.7 66.8 62.2 60.7 33.2 37.9 52.0 45.9 45.6 26.7 26.9 35.7 35.9 37.6 34.9 34.2 44.4 52.6 57.0 33.7 34.6 39.1 40.6 43.0 47.3 50.6 21.0 12.1 16.0 14.0 13.6 5.1 8.0 11.5 10.2 10.1 7.2 6.2 8.0 8.0 8.3 6.9 7.9 8.6 11.5 12.4 9.1 7.9 8.7 9.0 9.5 12.2 14.4 6.8 7.6 10.3 13.2 11.3 4.6 6.0 8.7 9.8 8.8 3.6 3.7 7.4 6.7 9.5 3.5 3.1 4.8 11.0 10.6 4.7 6.9 6.5 10.2 16.5 14.0 19.9 2.4 2.9 4.4 5.5 4.7 2.0 2.5 3.6 4.0 3.7 1.0 1.1 2.2 2.0 2.8 1.6 1.8 2.8 6.3 6.0 1.4 2.0 1.9 3.0 4.8 6.1 8.4 2.7 3.1 8.4 13.8 18.6 0.5 1.9 3.3 6.3 10.6 0.5 1.0 2.2 4.4 5.8 0.6 0.9 1.8 4.5 6.5 2.5 4.5 5.6 7.9 8.9 12.1 11.8 1.8 2.1 5.7 9.4 12.7 0.3 1.3 2.2 4.3 7.2 0.3 0.7 1.5 3.0 4.0 0.4 0.6 1.2 3.1 4.4 1.7 3.1 3.8 5.4 6.0 8.2 7.7

In terms of education indicators, while in the 1950s the number of Central Americans able to read and write was about 44%, by the start of 2000s, it reached and impressive 74%, Costa Rica being the country with the highest rates ever and Guatemala with the 21

lowest. Yet, in terms of educational attainment the improvements are still modest, with greater within region variation (see table XX). For example, the sub-regions average years of schooling continues to be very low (5 years), and while the isthmus has 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 have completed 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 postsecondary level the latter shows the second-best scores. Though remarkable the progress achieved, the Central American average still lags behind the Latin American, with the exception of Costa Rica. Even though, there has been a significant progress at the secondary and tertiary levels, this is increasing the education gap. This is, while of the top 12.1% of the population aged 25 and over who access post-secondary training, only 8.2% finish it; while nearly 12.2% of the bottom half of the population completes the first level (see table 3). This is of crucial significance for Central America, since human capital, particularly that attained through education has been emphasized as a critical determinant of economic progress50 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 the highest educational attainment levels has enjoyed a better record of living standards and democratic life. And Guatemala, with the lowest education attainments presents the highest poverty levels along with the most fragile democratic system. Yet, even the Central American countries seem to have achieved modest economic and 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 is almost 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 poorest Honduran ($2,876). Furthermore, poverty indicators are still alarming: 39% of Nicaraguans lack access to safe drinking water; 60% of Salvadorians do not have any kind of social security, or access to health services. Also, 69% of Nicaraguans do not have access to sanitation services, and 27% of Guatemalan children (below 5 yearold) are malnourished. Human development indices are substantially different; while Costa Rica ranked third in Latin America (0.881, 48 worldwide), Guatemala ranked 118th worldwide with a HDI of 0.67352. Consequently, with the persistence of inequality and exclusion, it becomes evident the imperative to enrich the concept of development with new spheres that belong to the political economy approach, and not just to economics or politics per se, in an effort to comprehend more fully the process of development and how the democratization process started in the region have contributed towards it. The next section addresses the empirical connections between democracy and human development in Central America. The focus of analysis shifts to bring together the political and developmental aspects and explore the links between democracy and human development using a typology that investigates the movement of Central American countries from one category to another. It suggests a strong democracy-lopsided pattern of development in the isthmus.
50 51

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

22

A Democracy-Lopsided Pattern of Development The legacies of the full-blown liberalism period in the nineteenth Century, were regime inheritance during most of the twentieth century, with Guatemala and El Salvador as military-authoritarianism, Costa Rica as a liberal democracy and Honduras and Nicaragua as traditional dictatorship53. These regime heritages ended approximately at the same time in El Salvador and Nicaragua (1979), Honduras (1982) and Guatemala (1986). These four countries started in the mid 1980s a democratization process prompted by the peace negotiations. In fact, building upon the work lay out by the Contadora Group from 1983-1985, the Esquipulas Peace initiative settled the military conflicts that had plagued Central America for many years, and in some cases for decades (i.e. Guatemala). In political terms Esquipulas, undoubtedly meant a turning point in the region. However, even though this remarkable transformation, this time around, it was the development processes which could 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 overall Human Development Index, the latters improvements were marginal. Coming from a period of economic growth in the 1960s and early 1970s, the democratization advances 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). This overall small net gain is not surprising, especially considering that the HDI aggregation as a composite index indicates small changes over time. What is remarkable to stress out is that these small net changes over 5-year intervals did not vary 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 Costa Rica 1.03 1.01 1.02 El Salvador 1.00 1.03 1.06 Guatemala 1.07 1.02 1.04 Honduras 1.10 1.05 1.04 Nicaragua 1.02 1.01 1.01 Source: Calculations based on UNDP (2005). 1995/1990 1.02 1.06 1.05 1.04 1.06 2000/1995 1.02 1.04 1.05 1.03 2002/2000 1.01 1.01 1.01 1.04 2002/1975 1.12 1.22 1.27 1.30 1.18

Thus, considering democracy and human development processes as compatible and interdependent, this framework assumes that countries can be on a mutually reinforcing upward spiral, with high levels of democracy leading to higher levels of human development and high human development in turn further promoting democratization processes. Conversely, weak human development results in low democracy levels and consequently poor progress towards democratization. Country performance can therefore be classified into four categories: virtuous, vicious and two types 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).

23

democracy (called human development-lopsided)54. In the virtuous cycle democracy enhances human development, which in turn promotes democratization; in the vicious cycle, poor performance on human development tends to lead to poor advances in democratization which in turn depresses human development achievements, and so on. Where linkages are weak, cases of lop-sided development may occur. On the one hand, human development may not bring about democratization (as in the case of Cuba for example); on the other hand, democratization may not generate advances in human development as it currently persist in most of Latin American countries (and Central America is not an exception). Visually, this can be classified comparing countries performance on human development and democracy using the threshold values of 0.750 for high human development levels as suggested by UNDP classification, and the average democracy score for Central American countries in the period 1972 to 2002 (0.574). Dividing the graphs below in quadrants, countries positioned in the NE quadrant will be in a virtuous cycle, while those in the SW quadrant will be in a vicious pattern. Countries that score above the democracy but below the human development thresholds will be democracy-lopsided (SE quadrant). Finally, countries that experience human development-lopsided will have higher human development levels and low democratization scores (NW quadrant). Graph 7: A Democracy-Lopsided Pattern of Development
1

0.9

Human Development Lopsided

Virtuous

Human Development Index

0.8

0.7

Costa Rica 0.6 El Salvador Guatemala 0.5 Democracy Lopsided 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Honduras Vicious 0.4 0.0 0.1 0.9 1.0 Nicaragua

Composite Index of Democracy

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

Graph 7 suggests a steady transition from a vicious cycle of low democracy and low human 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 between economic growth and human development.

24

Costa Rica is the exception, positioned itself in a virtuous cycle of democracy and human development since the 1980s, though with a small reversal on the quality of its democracy 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 Costa Ricas trajectory towards a virtuous cycle. Indeed, this country started to differentiate from Guatemala, Honduras and Nicaragua in the early 1990s. In contradistinction from modernization theory assumption, it seems that the Central America countries have moved on the opposite direction, strengthening first democratic institutions and processes. Table 5. Central America: Vicious, Virtuous and lop-sided trajectories, 1975-2002
1975 Costa Rica D-lopsided 1980 D-lopsided 1985 Virtuous 1990 Virtuous 1995 Virtuous 2000 Virtuous 2002 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 horizontal axes democratization.

Individually countries followed different trajectories over time. None of the countries which were in a vicious cycle in the 1970s and 1980s stayed in that category throughout, but all moved into the democracy-lopsided category. The most obvious is Costa Rica which start from an advantage point in 1975 with higher levels of democracy and human development and moved easier than the rest of the Central America countries from the democracy-lopsided in the late 1970s and early 1980s pattern 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 in the 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 on the other hand, from 1975 to 1980 suffered a big reversal in the democratic spectrum within the vicious category. In 1985 positioned itself in the democracy-lopsided category amid a civil war, perhaps due to the holding of presidential elections in 1984 and 1989 and legislative elections in 1985 and 1988. El Salvador slightly deteriorated its democracy score in the late 1990, but with the signing of the peace agreement in 1992 it started to differentiate from the other three countries with an increase in human development levels and modest improvements in democratization.

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The remaining two countries, Nicaragua and Guatemala were the later comers in transiting towards the democracy-lopsided category, respectively. Nicaragua, though made improvements in its democratization score in the mid 1970s, the overthrown of Somoza and the start of the Sandinista regime in the late 1970s meant a brief reversal in the early 1980s. However the elections in 1984 had an effect on its democratization scores 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 score from 1975 to 1980, to latter continue a pattern of improvements in democratization and move into the democracy-lopsided category in the late 1990s (table 5 portrays the trajectories and movements in categories made by the Central American countries from 1975 to 2002). These findings cast doubts on the directionality and linearity portrayed by modernization theory claims, as it is through democratic improvements that Central American countries have and can from now on, cause advances on development levels. Even though reversals to a vicious cycle are always plausible, it is an indication that Central American countries need to invest more resources in the promotion of human development without loosing sight on the consolidation of democratic processes. The latest round of elections (presidential and legislative) in 2006 are a clear indication that democratic practices are finding strong roots in the region, however, democracy must provide development dividends in order to survive. Moreover, no Central America country seems to be in a position to transit from a human development-lopsided pattern towards a virtuous cycle. At least, if done, it would have to be done at the expense of democratization. Conclusions Democratization has meant a turning point in many aspects in Latin America. With exceptions, incumbent Presidents and most Congressmen are now elected in competitive elections under at least minimal standards of freedom and fairness. Central America is not an exception this time. And yet, the democratic quality of these polyarchies is highly uneven. Scholars have analyzed this cross-national variety by considering democracy as a multi-dimensional phenomenon made up of a number of conceptually relevant properties that must be present before a polity can be defined a fully-fledged democracy. The result is a growing field of studies seeking to measure and explain what kind of democracies are emerging, while also attempting to identify the critical factors (i.e. institutional design, development, power distribution) affecting their quality. Several issues still need to be addressed: which institutional constraints are most critical in improving the quality of democracy? Do uneven levels of democracy influence uneven levels of development and inequality? Or is the causal direction the other way around, with unequal resource distributions affecting the viability of democratic governance? What role do capabilities and freedoms have in advancing democracy and human development? In political terms, it can be said that Central America has experienced a three-fold alteration in just twenty years: i) from war to peace, ii) from peace to democracy, and iii) from democracy to development. The first switch has been largely accomplished, but the second evolution has stalled, as demonstrated by the persistence of antidemocratic enclaves in a number of countries and the lack of accountability mechanisms. The third move, from democracy to development is also far from 26

accomplished with poverty and inequality remaining serious problems. This paper explored and documented each of these three transformations. The main conclusion is that the prospects for deepening democracy in the region, needs to be done in tandem with improving the living conditions of the Central American population, and particular attention needs to be put on the strengthening of human development indicators, 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 improvements in the degree of openness and liberties of the political systems. Elections are nowadays the norm, political institutions have been built and are in a process of consolidation, and civil rights and political liberties are broadly respected. If compared with the political situation 20 years ago, it is a sea change in Central American politics. However, democratization has not yet started to reap dividends for Central American citizens. The Central American States shall not be seen as the creators of wealth and democracy as its means, whose end is the individual. In order for democracy to survive, it must provide development dividends, otherwise it risks perishing. 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 biggest reversals experienced have been on democratization levels. Thus the risk of returning to a vicious cycle is always latent. The analysis of the Central American trajectories points to the need to scrutinize the conflicting periods in the movements of countries within and between the categories aforementioned. This paper calls for the need to pursue this kind of analysis, by unbundling individual case studies to understand in depth these trajectories. Such analysis should focus on the identification of the key turning points for each country that 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 be considered a capability a potentiality. Considering at the individual level capabilities are a kind of opportunity freedom, it is not difficult to imagine that at the societal level, democracy becomes that kind of opportunity freedom through which states and societies must navigate. The capability of a person is a derived notion that reflects and focuses on the ability of human beings to lead lives they have reason to value and to enhance the substantive choices they have55. In fact, among the list of central human functional capabilities, two are particularly relevant for this reasoning: (i) practical reason, defined as being able to form a conception of the good and to engage in critical reflection about the planning of ones own life, and (ii) control over ones environment, in particular politically or being able to participate effectively in political choices that governs ones life, having the right of political participation, protections of speech and association and so forth56. 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 ways of livings. Central America highlights divergent paths and shed light on the argument
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Sen (1989 and 1997). Nussbaum (2000:78-80). Other central human functional capabilities identified by Nussbaum include: life; bodily health; bodily integrity; senses, imagination and thought; emotions; affiliation; other species; play and material control over ones environment.

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that democracy by itself is not enough to generate sustained advances in human development. However, it is a necessary condition for human development. For example, in Costa Rica, political elites agreed earlier to expand freedoms that were grasped by the polity. This had an almost direct relevance to the well-being of its population, 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 or patchy 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 of the democratisation process in the early 1990s. Costa Rica then is an example of a transition from a democracy-lopsided pattern of development to a virtuous one; while El Salvador, Guatemala and Honduras moved from vicious to democracy-lopsided patterns. Democracy by itself cannot guarantee human development. Yet, there cannot be human development without democracy that guarantees a minimum of freedoms for the individual to choose among.

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