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 Nicaragua has had a conflicted and anti-democratic past, dominated from 1936 until 1979 by the Somoza dictatorship. Anastasio Somoza and his two sons who succeeded him, though corrupt and authoritarian, were staunch anti-communists who maintained good relations with the United States. In 1979, the Somoza government was toppled by a revolution led by the Sandinista National Liberation Front (FSLN), a leftist guerrilla group that had opposed the regime since the early 1960s. That revolution resulted in the loss of some 50,000 lives. During the 1980s, Nicaragua was embroiled in a decade-long struggle between its leftist Sandinista government, which confiscated private property and maintained ties with rebel forces in neighboring El Salvador, and U.S.-backed counter-revolutionary forces. Since democratic elections were held in 1990, Nicaragua has adopted pro-market economic reforms, held free and fair elections, and worked toward building democratic institutions. Despite progress on those fronts, successive governments have made limited inroads in combating corruption and addressing the country’s high levels of poverty and inequality.

On January 10, 2007, Sandinista leader and former President Daniel Ortega was inaugurated to a five-year presidential term. Ortega’s previous presidency (1985-1991) was marked by a civil conflict pitting the government against U.S.-backed “contras.” Ortega, who had lost the last three presidential elections, won only 37.9% of the vote in the November 2006 elections, but Nicaraguan law allowed him to avoid a run-off vote since he was more than 5% ahead of the next closest candidate, Eduardo Montealegre, then head of the Nicaraguan Liberal Alliance (ALN).

Ongoing disputes between powerful leaders, endemic corruption, and weak institutions have undermined the consolidation of democracy in Nicaragua. The 2006 elections followed more than a year of political tensions among then-President Enrique Bolaños, Ortega and the leftist Sandinista party, and allies of rightist former President Arnoldo Alemán. Alemán and Ortega, once longtime political foes, negotiated a power-sharing pact (“El Pacto”) in 1998 that has since influenced national politics. In addition to a tendency to have caudillos like Ortega and Alemán dominate national politics, Nicaragua is known to have high levels of corruption. According to Transparency International’s 2007 Corruption Perception Index, Nicaragua is one of ten Latin American countries where corruption is perceived as rampant. Currently, some opposition leaders are urging the Ortega government to publicly disclose how it is using the aid Nicaragua receives from Venezuela, including funds earned through the re-sale of Venezuelan oil bought on preferential terms through Petrocaribe. They are concerned that the president of Nicaragua’s state-owned oil company, which distributes the Venezuelan oil, is also the treasurer of the Sandinista party. Finally, the politicization of government entities, including party influence over the judiciary, is an obstacle to governance in Nicaragua.