This chapter characterizes the evolution of the Nicaraguan experiment, making reference both to other transitional experiences and to the unique characteristics of the Nicaraguan model. It develops a set of criteria by which to characterize a transition as socialist, drawing these criteria from a brief comparison of the experiences of the Soviet Union and the People's Republic of China (especially during their periods of transition) and from an examination of the "third path" of "democratic socialism" attempted in Jamaica in the 1970s. The chapter contrasts the Nicaraguan experience with comparable periods in what might be viewed as the contemporary application in the Western Hemisphere of the archetypal Marxist-Leninist or orthodox socialist model: the Cuban revolution. It concludes by raising questions about the possibilities for self-sustaining economic progress in Nicaragua and by noting the challenge that the Nicaraguan model presents for US policy.

This article offers a theoretical framework for designing macroeconomic strategy for El Salvador that will both respect stabilization and structural adjustment needs and enhance social equity. After outlining the largely negative distributional implications of the orthodox policies followed by El Salvador in recent years, we argue that stabilization and efficiency could actually be improved by increased equity and sketch out the elements of an alternative approach that would be distributionally sensitive and thereby help consolidate the peace.