Since the early 1960s, capitalist regimes in Latin America have employ
ed agrarian reform to minimize peasant political mobilization. By maki
ng minor adjustments in the agrarian social structure, reform Programs
have instilled their beneficiaries with a stake in the existing socio
political system. In contrast, socialist regimes have implemented agra
rian reform in order to generate peasant support for social transforma
tion through the redistribution of productive resources. This paper ex
amines the political and economic impact of one agrarian reform projec
t, the Los Patios project, carried out by the Sandinista government in
Nicaragua. Through interviews with policymakers, a survey of the bene
ficiary population, and analysis of data from Nicaragua's 1990 electio
ns, the conclusion is drawn that Los Patios succeeded in improving its
participants' economic position, but failed to gain their support for
the government's socialist endeavor. Instead, project beneficiaries w
ere transformed into peasant capitalists who sought a capitalist orien
tation in government policymaking. This study suggests that efforts to
initiate the transition to socialism are strongly conditioned by the
complex relationship between economic development and politics.