Social policy in Central America

This chapter focuses on four Central American countries, home to 36m. people. Along with Paraguay and some of the Andean countries, Guatemala, El Salvador, Honduras and Nicaragua have been depicted as having non-state (Gough and Wood 2004), informal welfare regimes with largely informal labour markets, low social spending and a prominent role for extended families (Martínez Franzoni 2008). ² Similar to other parts of Latin America, these countries underwent ‘dual’ transitions towards the market and democracy (Centeno 1994; see also Chapter 1 in this volume) while reformulating their social policy interventions. By 2010, 20 years since the beginning of these transitions, all four countries had reduced the number of people living beneath the poverty line and decreased income inequality between the better and the worse off (see Table 6.1). Poverty consistently declined throughout the 1990s and 2000s while inequality decreased in the four countries during the 1990s but only in El Salvador and Nicaragua during the 2000s (see also Chapter 5 in this volume). ³ What role, if any, has social policy played in this change?