The Process of the transition from authoritarianism to more representative forms of government has become a major subject of the scholarship on Latin American politics today (O'Donnell, et al, 1986; Malloy and Seligson, 1987; Stepan, 1989; Diamond et al, 1988-1990; Lowenthal, 1991). Given this interest, as expressed by the growing literature in this area, little attention has been paid to the transition process now going on in Paraguay, which is now emerging from one of Latin America's most long-standing authoritarian regimes.

A number of studies testify to the authoritarian nature of Paraguay's government and society. Johnson indicates that Paraguay ranked either 18th or 19th—out of 20 Latin American nations ... in 9 successive surveys of democratic development, carried out at 5-year intervals from 1945 to 1985 (Jonnson> 1988). A longitudinal study of press freedom found that Paraguay was invariably placed in the category of “poor,” or even “none,” between 1945-1975 (Hill and Hurley, 1980). When Palmer applied his 5 indicators of authoritarianism (nonelective rule, coups, primacy of the military, military rule, executive predominance) to the countries of Latin America, Paraguay consistently ranked first in its degree of authoritarianism (Palmer, 1977).

The Flow of drugs from Mexico to the United States has been a source of trouble in US-Mexican relations for at least two decades. The dominant view in Mexico is that the problem arises from the inability of the United States to control its domestic demand for heroin, cocaine, and marijuana. The dominant US view has been that the Mexican government has failed to make effective efforts to control the supply of drugs. At times — in particular after the killing of Enrique Camarena, an agent of the Drug Enforcement Administration (DEA), in 1985 — US government anger at Mexico's alleged failure to maintain the integrity of its anti-drug efforts has been the dominant source of friction between the two nations.

This Article Surveys the experiences of four Central American countries in implementing economic policy reform: it analyzes the factors which led to the introduction of new policies, explores various aspects in their implementation, assesses lessons learned in the process, and discusses prospects for the future.

The Four Countries under discussion — Costa Rica, El Salvador, Guatemala, and Honduras — are experiencing a move away from import-substitution policies of the past toward increased liberalization of their economies and becoming more competitive in the international marketplace. This shift in policy orientation began in the 1980s, after years of economic decline. At the risk of appearing arbitrary, the policy-shift years are here defined as those which followed an actual, or announced, change to an economic policy with a predominant market orientation.

Paraguay and its closest neighbors, the Rio Plata Basin from one point of view or the Southern Cone from another, have experienced an increasing challenge from the drug traffic in recent years. Initially, everything linked to drug use and traffic was considered—in general, much oversimplified terms — mainly as the social problem of a rich society, primarily that of the United States. The South American countries, preoccupied with surviving the blows of the “lost decade” while trying, simultaneously, both to throw off authoritarian regimes in terminal crisis and to negotiate transitions from democracy, assumed this problem could not affect them. In any event, that aspect of the drug trade which concerned the countries of South America above all was the growing tragedy of Colombia, which was just beginning to make headlines in the world press.