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In the revolutionary decade between 1979 and 1992, it would have been difficult to find three political systems as different as death-squad-dominated El Salvador, peaceful social-democratic Costa Rica, and revolutionary Sandinista Nicaragua. Yet when the fighting was finally ended by a peace plan initiated by Costa Rica's President Oscar Arias, all three had found a common destination in democracy and free markets. To explain this extraordinary turn of events is the task of this landmark book, which fuses political economy and cultural analysis.

Both the divergent political histories...