Abstract
This chapter provides a historical overview of the politics of Nicaragua’s domestic resource mobilization for social development. Focusing on the quality of state-society relations, the chapter analyses strategies for development financing and the social tensions and contradictions that emerged during the Somoza dictatorship (1936–1979), the Sandinista revolution (1979–1989), neoliberal adjustment (1990–2006) and the current Ortega regime (2007–present). Case studies of tax reform negotiations for a more equitable tax system, the challenges and opportunities of Venezuelan Aid (Bolivarian Alternative for the Americas—ALBA), grassroots contestation of mining in Rancho Grande, and health sector financing and institution building contribute empirical evidence to the analysis. The chapter argues that social services increase and expand when states prevent elite capture of resources and democratization processes are strengthened.
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Notes
- 1.
This chapter presents findings from four research papers on the politics of domestic resource mobilization in Nicaragua: (a) on the political economy of tax reforms and social spending, (b) on bargaining and contestation in the mining sector, (c) on state-society and state-donor relations and (d) on institutional change related to health financing.
- 2.
In effect, private financial flows are crucial. Remittances constitute an important source of household and national income, currently 9.7 per cent of GDP (World Bank 2014).
- 3.
Taxes as a share of GDP did not exceed 10 per cent.
- 4.
Additionally, the national GDP growth rate (at constant 2005 USD) went from 4.6 per cent in 1980 to −0.8 per cent in 1982. In 1984, it declined by 1.6 per cent (World Bank 2015).
- 5.
Including the World Bank, the European Union, the Inter-American Development Bank (IADB), Sweden, Norway, Finland, the United Kingdom, Germany, the Netherlands and Switzerland.
- 6.
In 2005, for example, only 40 per cent of the population had access to essential drugs. Families, and not the state, assumed two-thirds of pharmaceutical spending (Acevedo 2005).
- 7.
President Ortega stated that Europeans were like “flies that step on dirt. … What they provide is not aid, but bread crumbs, small payments for the enormous unpayable debt they have with the people of the Americas” (Noticias24 2008). The conflict reached a critical point, when political opposition parties accused the Sandinista National Liberation Front (FSLN) of committing fraud during municipal elections in 2008 and violating the national constitution, which prohibits re-election.
- 8.
As aid resources were shrinking, many donors prioritized their funds and development efforts in Africa. Additionally, Nicaragua’s GDP surpassed the middle-income country threshold in 2014, leading to further aid declines.
- 9.
This case study draws on the report prepared by Molina (2017) for the PDRM project, unless other literature cited.
- 10.
These organizations included cooperatives’ federations, rural women’s and youth organizations, NGOs like OXFAM and Christian Aid, research centres working on tax issues, academics and civil society actors like the Coordinadora Civil comprising both Nicaraguan NGOs and social movements (Molina 2017).
- 11.
This section draws on the report by Carrión (2017) prepared for the PDRM project.
- 12.
- 13.
- 14.
- 15.
This section draws on the report prepared by Gutiérrez (2015) for the PDRM project.
- 16.
Special Law on Exploration and Mining (Law 387), Chapter IV. Mining Concessions, Article 36–38.
- 17.
See various press articles, for example Aburto (2015).
- 18.
This section draws on the report prepared by Delmelle and Mendoza (2017) for the PDRM project, unless other literature is cited.
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Carrión, G. (2020). The Political Economy of Domestic Resource Mobilization in Nicaragua: Changing State-Citizen Relations and Social Development. In: Hujo, K. (eds) The Politics of Domestic Resource Mobilization for Social Development. Social Policy in a Development Context. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37595-9_10
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