Revisiting one arena of the Cold War-Central America-which dominated i
nternational headlines in the 1980s, this article explores its legacy
on the region. It asks whether the ending of the Cold War and the peac
e accords which concluded the internal wars of Nicaragua, El Salvador
and Guatemala in 1990, 1992 and 1996, respectively, have brought susta
inable peace, development and democracy. In particular, it explores th
e changing agenda of international financial and development agencies
which have supported the postwar reconstruction of the region. The exp
eriences of Nicaragua and El Salvador have shown that failure to coord
inate the efforts at economic adjustment with those of peace-building
compromised the possibilities of development and democratization, part
icularly for the poorest sectors of the population. Conservative elite
s who emerged intact h-om the war were able to consolidate their econo
mic power, and resist and Limit political reform, while handing respon
sibility for the poor and the former war zones to international agenci
es. The latter have shifted their agenda in the Guatemalan peace proce
ss, incorporating a strategy of 'civil society strengthening' in order
to build capacity within society to create more accountable and democ
ratic states, The conclusion of the article explores the ambiguities o
f this strategy. On the positive side it legitimizes and protects the
newly won but fragile freedoms of speech and association in the region
; on the negative side, it risks turning a historical social and polit
ical dynamic into externally funded 'projects' with limited sustainabi
lity, whose outcome many international agencies tend to assume they ca
n shape to their own expectations.