chapter  9
27 Pages

The Costs of Austerity in Nicaragua: The Worker-Peasant Alliance (1979-1987)

WithDavid F. Ruccio

The initial measures taken by the government, together with the gains made by social movements outside the state, tend to alter the macroeconomic balances of the prerevolutionary economy. This chapter discusses a relatively brief discussion of the costs of the insurrection and the economic situation within the revolution through 1984. It presents a critical assessment of the austerity program that was adopted in early 1985. The chapter focuses on the costs of austerity in the cities and in the countryside. An analysis of the consequences of austerity in the cities and the countryside focuses attention on the status of the worker-peasant alliance. The chapter addresses the immediate and long-term consequences of the costs. The "exhilarationist" tendencies of the Nicaraguan economy were increasingly visible in 1984. Many of the early measures of the Government of National Reconstruction were aimed at reviving the "stagnationist" Nicaraguan economy.