This chapter explores the interaction between the debt crisis and Costa Rican democracy: the effects of democratic institutions and values on the ability to cope with economic crisis, and the impact of the crisis and its aftermath on those same institutions and values. Costa Rica’s adjustment efforts moved through three phases between 1978 and 1988. These include: an initial period of unsuccessful crisis management from 1979 to mid-1982; and a successful short-run stabilization effort during the first year and a half of the Monge government through the end of 1983. These also include: the period from 1984 to the present, characterized by a continued need for tight macroeconomic management combined with efforts at more far-reaching economic reform. The chapter concludes that Costa Rican democracy proved stronger than the challenge of the acute crisis period, but has yet to prove it self flexible enough to make the longer-term economic reforms crucial for its own self-preservation.