This paper will discuss the trajectory of social change in Central America and Latin America in recent decades, and beyond that, the transformations in the global system, as the "big picture" that puts into a larger focus issues of democratization and development in Guatemalan. I contend that recent change in Guatemala is part of a complex transition that began in Central America in the 1960s and will continue into the 21st century, involving the region's ongoing, gradual, highly conflictive and contradictory entrance into emergent global economy and society. I must state as caveat that to compact these issues into the space of a few pages means that we must necessarily simplify complex and open-ended social and historical processes, and risk painting in "black and white" what is more properly a picture with many shades of "grey."

Globalization entails the transition from the nation-state phase of capitalism to a qualitatively new transnational phase. Since 1492 the world has been linked together into a single social system by trade and financial flows in an integrated international market. But from the late 1960s and on, and accelerating now at the close of the 20th century, this world economy is giving way to a new global economy. In this global economy, nations are no longer linked together by external flows and relations but are rather becoming integrated organically through the globalization of the production process itself along with the integration of the whole complex of the social, political, juridical and cultural superstructure. The emergence of a truly global economy brings with it the material basis for the emergence of a single global society, including the transnationalization of civil society, of political processes and of cultural life.

The global mobility of capital has allowed for the decentralization and functional integration around the world of vast chains of production and distribution, the instantaneous movement of values, and the unprecedented concentration and centralization of worldwide economic management, control, and decision-making power in transnational capital. Global capitalism is organized in a set of increasingly supra-national institutions. These institutions include: the transnational corporations that own and manage the world's resources and appropriate the wealth produced by humanity; the international financial agencies (IFIs, such as the IMF and the World Bank) that impose the conditions necessary for global capital accumulation to take place; the states of the North, and their junior counterparts of the South, that create the global and the local political, administrative, and legal environment that allow the system to function; and the formal and informal transnational elite forums, such as the Groups of Seven, the Trilateral Commission, and the World Economic Forum, that develop strategies for the maintenance and reproduction of the system and supervise its overall operation.

The agent of global economy is a new transnational elite. This transnational elite now controls the levers of global decision-making and increasingly monopolizes power in global society. It is comprised of the owners and managers of the transnational corporations, and also of the bureaucrats, the cadres, and the technicians, who administer the IFIs, the states of the North and the South, and the transnational forums. And membership in the transnational elite also includes the politicians and charismatic figures, along with select organic intellectuals, who provide ideological legitimacy and technical solutions. Below this transnational elite are a small and shrinking layer of middle classes who exercise very little real power but who - pacified with mass consumption - form a fragile buffer between the transnational elite and the world's poor majority. Globalization dramatically alters the balance of forces among classes and social groups in each nation, and at a level of the global system, away from popular majorities and towards transnational capital and its representatives. National states increasingly respond to the interests of transnationalized fractions of local dominant groups.

The program of the transnational elite, in broad strokes, is to create the conditions most propitious to the unfettered functioning of global capitalism. In promoting this program, this new global elite has been pursuing in every region of the world since the mid-1980s a "transnational agenda" involving concomitant economic and political components (Robinson, 1996a, 1996b, 1996c; 1997). The economic component is neo-liberalism, a model which seeks to achieve the conditions in each country and region of the world for the mobility and free operation of capital. The neo-liberal structural adjustment programs sweeping Latin America and the South seek macroeconomic stability as an essential requisite for the activity of transnational capital. This model seeks to harmonize a wide range of fiscal, monetary, industrial, and commercial policies among multiple nations, as a requirement for fully mobile transnational capital to function simultaneously, and often instantaneously, among numerous national borders. In the neo-liberal model, stabilization, or the package of fiscal, monetary, exchange and related measures intended to achieve macroeconomic stability is followed by "structural adjustment":

• a) liberalization of trade and finances, which opens the economy to the world market;
• b) deregulation, which removes the state from economic decision making (but not from activities that service capital);

c) privatization of formerly public spheres that could hamper capital accumulation if criteria of public interest over private profit is left operative.



This model thus generates the overall conditions for the profitable ("efficient") renewal of capital accumulation through new globalized circuits, and along with it, for social reproduction in the age of globalization. Without a single exception, neo-liberal restructuring results in an increase in poverty and inequality in the adjusted country as wealth is redistributed upwards and shifted from the domestic market to the external sector linked to the global economy (c.f., Green, 1995). The unprecedented growth of inequalities worldwide under globalization, along with the emergence of new social hierarchies and cleavages around these inequalities (see, inter alia, UNDP, various years), is leading to a new global social apartheid and worldwide polarization.

In turn, the political project is the promotion of "democracy", or what is more accurately called polyarchy, which refers to a system in which a small group actually rules, and participation in decision making by the majority is confined to choosing among competing elites in tightly controlled electoral processes. This type of "low-intensity democracy" does not involve power (cratos) of the people (demos), much less an end to elite rule or to substantive inequality that is growing exponentially under the global economy. The crisis of elite rule that had developed throughout the Third World in the 1970s and 1980s, in the context of globalization, was resolved through transitions to polyarchies. What transpired in these contested transitions was an effort by transnational dominant groups to reconstitute hegemony through a change in the mode of political domination, from the coercive systems of social control exercised by authoritarian and dictatorial regimes to more consensually-based systems of the new polyarchies. At stake was what type of a social order - the emergent global capitalist order or some popular alternative - would emerge in the wake of authoritarianism. Masses push for a deeper popular democratization while emergent transnationalized elites, who have behind them the structural power of the global economy and the inordinate political and ideological influence that this brings, and often count on the direct U.S. political and military intervention, were able to gain hegemony over democratization movements and steer the breakup of authoritarianism into polyarchic outcomes. The transnational elite is now attempting to consolidate fragile polyarchic systems as the political counterpart to neo-liberalism. Interaction and economic integration on a world scale are obstructed by authoritarian or dictatorial political arrangements, which are unable to manage the expansion of social intercourse associated with the global economy. With its mechanisms for intra-elite compromise and accommodation and for hegemonic incorporation of popular majorities, polyarchy is better equipped in the new global environment to legitimize the political authority of dominant groups and to achieve the political stability necessary for global capitalism to operate. The "democratic consensus" in the new world order is a consensus among an increasingly cohesive global elite on the type of political system most propitious to the reproduction of social order in the new global environment.

The underlying macrostructural dynamic in individual nations and regions of the world over the past few decades has been integration into emergent global society. This has involved the breakup of national economic, political and social systems reciprocal to the breakup of a pre-globalization nation-state based world order as globalization has advanced. This process of integration into changing world structures takes place through what elsewhere I have termed transnational processes (Robinson, 1997; 1998b forthcoming) which are underway in each country and region of the world. By transnational processes I mean the economic and concomitant social, political, and cultural changes associated with the transition to global capitalism. Transnational processes in Central America should be seen as changes specific to the region that are linked to broader changes in the global system.

What types of changes do we see in each country and region around the world as transnational processes get underway and have a transformative effect? Productive structures are reorganized reciprocal to the reorganization of global production, a process through which each national economy is rearticulated to the global economy as new economic activities linked to globalization come to dominate and as each region acquires a new profile in the global system. There is a complete class restructuring. Domestic classes tend to become globalized, pre-globalization classes such as peasantries and artisans tend to disappear, and new classes and class fractions linked to the global economy emerge and become dominant. The transnational agenda of neo-liberalism and polyarchy take hold as the hegemonic project under the guidance of transnationalized fractions of local elites. Local political systems and civil societies become transnationalized, states become integrated externally into supra-national institutions and forums that gradually assume more and more functions that corresponded to the nation-state in the pre-globalization period. A "global culture" of hyper-individualism, competition and consumerism has eclipsed nationalist and developmental ideologies.

We see all these changes in Central America, and more broadly throughout Latin America, as transnational processes have taken hold over the past two decades and as a new transnational model of society comes to replace the pre-globalization model. Facilitated by the neo-liberal opening to the global economy and the "Export-Led Development" (ELD) strategy, maquiladora production (particularly of garments), tourism, non-traditional agricultural exports, and remittances from emigrant workers have risen dramatically in importance and are coming to eclipse the traditional agro-export model as the most dynamic economic sectors linking Central America to globalized circuits of production and distribution (Robinson, forthcoming 1998b). The Central American peasantry, artisan class, national industrial and other pre-globalization classes have tended to gradually disintegrate, and three principal globalization groups have come to the forefront: transnationalized fractions of the bourgeoisie tied to the new economic activities; new urban and rural working classes; and a new class of supernumeraries, or superfluous labor pools (a huge portion of the latter have migrated to the United States, where it constitutes a de-nationalized immigrant labor pool). The old authoritarian regimes have crumbled through transitions to polyarchy, and leftist movements that posed in the 1980s an anti-systemic alternative to integration in the emergent global order have been defeated or transformed. In each Central American country, a transnationalized "technocratic" or New Right fraction has gained hegemony within the dominant classes and is pushing the transnational agenda of neo-liberalism and the consolidation of polyarchies through diverse institutions, including political parties, states, and the organs of civil society.

Neo-liberal structuring has resulted in a massive transfer of resources from the public to the private sphere, and within the private sphere, from the domestic to the external sector. The change in the model of accumulation has thus involved a concomitant change from the "developmentalist state" of the national model to the "neo-liberal state" of the transnational model. The Central American states have been reduced and transformed, functioning to adjust national structures to emergent global structures. The five Central American states have moved gradually towards supra-national integration. This integration is political, taking place through new formal and informal forums, such as the Sistema de Integracion Centroamericana (SICA), the Central American Parliament (PARLACEN), and regular presidential summits and region-wide ministerial meetings. It is also economic, and includes the negotiation of a new free trade zone based on collective integration into the North America Free Trade Agreement (NAFTA), and beyond it, the global economy. Complex sets of international agreements have opened up the region to transnational capital. If the CACM was a form of "inward" integration, intended to create a regional market for multinational (largely US) capital to take advantage of economies of scale, the type of integration proceeding under globalization is "outward," aimed at creating a single Central American field for the unfettered operation of transnational capital.

The IFIs and diverse UN and OAS units and other transnational actors, including the U.S. AID and numerous International NGO's (often linked to core country states), have come increasingly to assume functions of states through the design and imposition of economic policies, management of peace accords, sponsorship of institution-building, and so on. In this process, each individual Isthmanian state has been penetrated by two new social forces, one from "within" and the other from "without". From "within," transnationalized fractions of dominant groups vie for, and gain control over local states, particularly, over key ministries tying the country to global economy and society, such as ministries of foreign affairs, finances, economic development, and Central Banks. From "without," diverse transnational actors representing an emergent transnationalized state apparatus penetrate local states, liaison with transnationalized fractions therein, and help design and guide local policies.

These vast and open-ended transformations should be seen as the evolving outcome to the struggle among social forces in Central America as collective agents in dialectic interaction with changes in the global system. In broad strokes, three social forces representing three distinct projects for the region were in dispute during the 1960s-1990s upheavals. The landed oligarchies and dominant groups tied to the traditional agro-export model sought to sustain and reproduce the old model of capital accumulation, and the particular set of social privileges and relations of domination based on authoritarian political systems. As the "Autumn of the oligarchs" approached, the popular sectors and the mass revolutionary movements sought radical reformism, such as mass land redistribution, as well as more far-reaching revolutionary and socialist-oriented alternatives for the region, that would have deeply undermined the class structure, upset relations of domination, and redistributed power and resources in favor of popular majorities.

As the regional conflict unfolded in the 1970s and 1980s, on the surface it appeared as a bipolar contest between the old oligarchies and the popular revolutionary movements. But, in fact, globalizing dynamics had begun to have a transformative effect on local social forces. A "New Right" gradually cohered in the 1980s, in fits and bouts, into local transnationalized fractions of dominant groups and acquired its own political protagonism. Its project was to advance the agenda of the transnational elite. This transnational fraction was not a group that came into being from outside of the traditional oligarchy but from within, from the same family networks. The prospects of this emerging transnational fraction for accumulating wealth and privilege, however, was less linked to restoring the traditional agroexports and industries under pre-1980s social relations, as they were to converting the region into a new export platform. It sought to submit backward oligarchic property relations to a capitalist modernization through a program of neo-liberal restructuring and to a new "competitive" insertion into the emerging global economy. This New Right project sought to modernize the state and society without any fundamental deconcentration of property and wealth, and without any class redistribution of political and economic power.

It also promoted, together with the United States, transitions from authoritarian to so-called "democratic" political systems. The immediate aim was to preempt the movements for a more far-reaching popular democratization through immediate reform, such as the replacement of military by civilian personnel and controlled elections. But beyond this conjunctural consideration, the insertion of the region into global capitalism would require a political system with the promise of achieving more lasting social stability through consensual modes of social control rather than the old oligarchic dictatorships. This involved demilitarization, peace negotiations, the institutionalization of procedurally correct electoral processes, states with a functional separation of powers, and so on.

The persistence of an oligarchic political structure combined with rapid capitalist development spurred on by the region's incipient integration into the emergent global economy in the 1960s and 1970s had sparked the revolutionary upheavals by the late 1970s. In the 1980s the revolutionary movements succeeded in breaking the hegemony of the landed oligarchy and rich industrialists and financial groups that had come into existence with the CACM. However, due to a complex confluence of factors, these popular social forces were unable to impose and stabilize their project of a radical redistributive and socialist-oriented reconstruction of the region. One of these factors was massive US intervention. A second was the contradictions and weaknesses internal to the revolutionary project itself, in the context of a changing world order. At the structural level, the emergence of the global economy and the growing power of transnational capital and the world market to impose discipline on anti-systemic movements made inviable the revolutionary project. The third factor was the changing composition of the dominant classes, their socio-economic articulation, and their political-ideological project. The emergence of the neo-liberal New Right in the 1980s in each of the Central American countries was, in part, a very result of the revolutionary upsurge, which altered the dominant power blocs in each country. It was also, in part, a result of the changes in the world order with the emergence of the global economy and a transnational elite as both a political and economic protagonist.

These three factors cannot be separated; they are different dimensions of a process whose structural determinacy was the emergence of the global economy and the influence of globalizing pressures on the complex set of regional agents and social, economic and political structures. It was the threat of revolution from the popular classes that led to US intervention. US policymakers changed the objective of interventionism, from the mid-1980s and on, from a military defeat of revolutionary forces through counterinsurgency to a more thorough political and economic restructuring of the region and its social forces via the linkage of Central America to emergent global structures. This included a shift in policy to "democracy promotion" as a means to neutralize through incorporation the threat posed by anti-systemic forces in the region. From the mid-1980s and on, changes in the US strategy and new opportunities as well as constraints opened by globalization and a changing world order for the distinct social forces in dispute, accelerated the articulation of alternative political-ideological discourse and projects among sectors of the dominant groups that would gradually cohere into a New Right elite. The transnational nuclei of the local elite vied for, and achieved, hegemony over the elite as a whole in the 1980s, and went on in the 1990s to assume state power and to attempt implementation of the program of global capitalism in the region. Political regime change in each country, except Costa Rica, has been one aspect of a broader transition in the nature of political authority and the mode of social control in the region. What took place structurally from the 1960s to the 1990s was the breakup of authoritarian systems on the heels of the mass socioeconomic disruptions and political mobilization caused by the massive entry of foreign capital through the CACM, new economic activities, and social class protagonists, which signalled the beginnings of globalization in the Isthmus. The recomposition of the capitalist order involved a new social structure, based on changes in the economy, state, regime and political system, classes, and so on.

My analysis runs contrary to conventional thinking, according to which, by the end of the 1980s the old oligarchies had virtually disappeared, but neither the popular forces nor their adversaries, the new dominant groups in Central America together with the United States, could prevail. According to this view, a stalemate had been reached which created the conditions for an historic compromise between different class and social forces in favor of a mutual accommodation. A broad consensus was reached through negotiations and peace settlements that shifted the terrain of struggle in the region from the military to the politic-civic arena. In turn, this shift was to be framed within region-wide processes of democratization and demilitarization. Competition between different social projects would now take place through elections and peaceful mobilization.

I do not share this conventional view. The revolutionary upheavals did not end in a regional stalemate leading to a historic compromise among social classes and political groups. Rather, the outcome of the regional conflict was the conditional defeat of the broad popular sectors in Central America and the conditional victory of the new dominant groups. This outcome was formalized in the internationally-sponsored peace negotiations of the late 1980s and early 1990s, followed by diverse concertacion and "reconciliation" forums which transferred social contradictions from the military to the political terrain, and hammered out fragile and temporary pacts, but did not resolve the social contradictions that gave rise to the upheaval.

In Nicaragua, the Sandinista triumph of 1979 constituted the seizure of state power in one country by a revolutionary movement and an effort to implement the popular project. The overthrow of the Somocista dictatorship destroyed the traditional oligarchy. However, the structural constraints of globalization and the direct power of the US state conjoined to make unworkable an alternative to polyarchy and global capitalism. Modernizing capitalist fractions had been coalescing since the mid-1960s, and in opposition to Somoza linked with the Sandinistas in 1970s class alliances. These fractions stayed inside Nicaragua following the revolution and retained their links to the international capitalist market. They gradually gained structural strength and political importance in the 1980s, as they increasingly replaced the state as the principal intermediaries between Nicaragua and world markets and developed ties to the emergent U.S.-led transnational elite. In highly simplified terms, a transnationalized fraction took over key institutions of the state following the 1990s elections, even as much of the state, and society at large, was in dispute since 1990. This embryonic transnational nucleus pursued the program of the reinsertion of Nicaragua into the global economy and a far-reaching neo-liberal restructuring.

In El Salvador, a massive popular movement burgeoned in the 1970s and the guerrilla movement had snowballed into a full civil war by the early 1980s. While the revolutionary forces came to threaten state power, the US-led counterinsurgency staved off a triumph similar to that which had taken place in Nicaragua. However, behind the very visible battle between the revolutionary armed movement and the US-supported dominant groups was a more significant process: the reorganization of the Salvadoran state and economy in conjunction with movement at the level of the global economy, a reconfiguration of the dominant groups, and the emergence of a lucid New Right fraction within the ruling party itself, the Nationalist Revolutionary Alliance (ARENA). The transnationalized fraction gained control over the ARENA party - which had ironically first been formed by the most retrograde elements of the oligarchy - and of the state with the election of Alfredo Cristiani in 1988. The insurgency, combined with changes in the dominant project itself, shattered the old oligarchy and its project. This fraction was able to gain hegemony over the elite and over the transition as a whole, and implement sweeping neo-liberal transformation since 1988.

In Honduras, both the subordinate and the dominant classes were historically the least developed in Central America. The chaotic disequilibrium among internal social forces for much of the 20th century into the 1970s created fertile ground for an unstable string of civilian-military regimes responding to competing pressures of a small landed oligarchy, mid-sized ranchers, and bureaucratic elites, and mass peasant and worker mobilizations. The weakness of Honduras social forces and the state allowed for the vulgar domination of the country by foreign companies, making Honduras the quintessential "Banana Republic." A transnational fraction began to cohere in the 1980s in consonance with the virtual US occupation of the country as a staging ground for regional counterinsurgency, and the US sponsorship of economic development and restructuring programs and of a transition to polyarchy. This fraction gained representation in the National Party through Rafael Callejas, who won the 1989 elections and proceeded with sweeping neo-liberal reform, a process continued and in fact deepened by the subsequent Liberal Party government.

In Costa Rica, a very different path of twentieth century development did not deter the outcome in the 1980s and 1990s of integration into the global economy under terms similar to the region as a whole and the characteristic changes in internal social forces. The hegemony of the landed oligarchy was broken in the 1948 civil war and replaced by an alliance of emergent industrial, commercial, and financial capitalists. This united and relatively modernized dominant class was able to incorporate the peasantry and working classes into a stable hegemonic bloc and establish a functioning polyarchic political system. Under the model of ISI industrialization and agro-export expansion with an important redistributive component and significant levels of social welfare spending, Costa Rica experienced levels of development well beyond its neighbors. This model of dependent capitalist development had become exhausted by the late 1970s. The financial crisis of 1981 gave impetus to a gradual restructuring throughout the 1980s and 1990s along with the reinsertion of the country's productive apparatus into the emergent global economy. Under close AID tutelage, successive governments oversaw liberalization, austerity, deregulation, privatization and the development of a ELD model that began to replace the old ISI model. Socioeconomic restructuring generated new entrepreneurial groups within both parties of the elite, the National Liberation Party (PLN) and the Social Christian Unity Party (PUSC), as transnational nuclei emerged within their ranks, gained control of their parties, and later on, of the state.

And finally we arrive at Guatemala, which we can now assess in comparative and historical perspective. The traditional agro-export oligarchy was the most deeply entrenched and in control of the state - which was administered directly by the military for much of the 1980s - and a transnationalized fraction the weakest. As in El Salvador, the US-supported Christian Democratic project that came to government in the 1980s as part of broader counterinsurgency efforts was intended to defuse the popular movement with reforms and at the head of very visible transitions to (largely dysfunctional) polyarchy. But the Christian Democratic alternatives were not meant to be the bearers of the transnational elite project in the larger scheme of things. With the introduction and expansion of new economic activities in the 1980s, including a powerful new financial sector tied to international banking, incipient export-oriented industry such as maquila textile production, non-traditional agricultural exports promoted by the IFIs, and new commercial groups, a transnationalized fraction of the elite assumed its own profile and clashed with the old state-protected oligarchy over fiscal, tax, liberalization, and related policies.

This tiny and poorly organized fraction articulated in the early 1990s a coherent program for economic and political modernization attuned to the transnational elite agenda, as epitomized, for example, in the policy proposals that flowed out of the influential AID-funded Association for Research and Social Studies (ASIES). Representatives of this transnationalized fraction, after a false start with the election of Jorge Serrano in 1990, assumed the reins of the government with the electoral triumph in 1994 of the National Action Party (PAN), whose leadership included professionals, administrators, and technocrats schooled in neo-liberal economics and a modernizing outlook. Unlike El Salvador, where the insurgency actually came to dispute state power and constitute a dual power, the Guatemalan insurgency did not threaten the state. But the movement could continue an indefinite insurgency that would make it impossible to ever pacify the countryside and establish the stability that transnational capital required for the country and the region as a whole. The subsequent New Year's eve 1996 peace accords set the basis for consolidating the transnational elite project for Guatemala. In 1997, the PAN government committed itself to deepening and consolidating a long-term program of neo-liberal transformation first launched in 1989 with little success.

The relative strength of the oligarchy and underdevelopment of the transnationalized fraction, rooted in the particular development of the Guatemalan state and social forces, accounts in part for the tardiness of the transnational project and the severe difficulties in its implementation. The counterrevolution of 1954 followed by a "counterinsurgency state" gave an internal cohesion to the oligarchy that allowed it to resist change in the 1980s (c.f, Jonas, 1991). In comparative perspective, the particular constellation of social forces and historical events in the other Central American countries generated conditions (relatively) more responsive to the transnational project than in Guatemala. The old oligarchy was crushed in Nicaragua in 1979, displaced in Costa Rica in 1948, and transformed in Honduras by U.S. intervention and regional dynamics. In El Salvador, U.S. and transnational actors promoted tax, land, and other reforms as a component of the counterinsurgency program - in the process, weakening the old oligarchy and strengthening a transnational fraction - in response to the strength of the revolutionary movement. In Guatemala, the counterinsurgency rested on postponing any reform (the IFIs did not impose conditionality on Guatemala, for instance [Jonas, 1991:81, 88]); counterinsurgency was midwife to the transnational project in El Salvador and an obstacle in Guatemala.

Concluding Remarks: Globalization and the Prospects for Democracy and Development in Guatemala

In light of the "big picture" presented here, what are the real prospects for democratization and for development in Guatemala in the current epoch? To phrase the same question in an entirely different manner is to ask, in the current globalized environment, what are the sources of power that the popular Guatemalan majority may be able to develop in order to confront powerful transnational social forces adverse to the kinds of structural transformation that could benefit the poor majority? And what can we say in the way of policy recommendations?

Let us recall, in attempting to answer these questions, that social change is driven by contradictions that make impossible the continuation of an existing set of historic arrangements. I have emphasized above the underlying structural dynamics at play in Central America - a transition to a transnational model of society reciprocal to changes in the global system. This globalization of Central America has not resolved the social contradictions that generated the regional upheaval in the first place, and has simultaneously introduced a new set of contradictions. There has been a continuation - and, in fact, a deepening - from 1970s-1990s, under new circumstances, of an extreme concentration of property and wealth, and of political power, in the hands of tiny minorities, side by side with the impoverishment and powerlessness of a dispossessed majority. The lives of the vast majority of Central Americans have gotten worse, not better. The very conditions which gave rise to the Central American crisis in the first place, therefore, remain for the most part unaltered.

The neo-liberal model specifically precludes policies, such as agrarian reform and redistributive measures, that could ameliorate current social conditions. The new model of capital accumulation is not likely to bring about development in the region. For instance, the maquiladoras constitute an enclave with little or no backward and forward linkage to host nation economies, very low value added, and are characterized by superexploitation of workers and by conditions of extreme oppression within the free trade zone enclaves. Tourism does stimulate greater local economic activity but it does not generate integrated development. It is generally low-skill and low-wage seasonal employment and is dependent on highly elastic and unstable demand over which host countries have very little control. Neither do NTAEs hold much promise for regional development, as several recent studies have shown (Conroy, et. al., 1996; Barham, et. al., 1992; Clark, 1995). The transnational model of society in Central America is inherently unstable, and indicates contradictions internal to global capitalism, including the worldwide social polarization between rich and poor, the loss of nation-state autonomy and regulatory power, and the deterioration of the social fabric in civil society accompanied by crises of authority and state legitimacy. Resistance of the Guatemalan elite to even the most minimal reforms (e.g, the tax system) creates the image of the transnational project as "progressive" and obscures the essential polarizing and pauperizing consequences of neo-liberalism. Let us recall that the transnational elite wants to stabilize its project in Guatemala not in order to democratize and develop the country but in order to secure Central America for global capitalism.

It is not clear to what extent the peace accords in Guatemala will be able to contribute substantively towards democratization and development, if indeed those accords do not actually end up legitimating the emergent neo-liberal order by precluding fundamental change in the socioeconomic system and delegitimating opponents of this system (e.g., dispossessed campesinos invading land and those who support them) as "extremists who reject peace." We should recall that "success" in a political endeavor is often defined from the summits of power as the extent to which the ruling structures are imposed and reproduced, to which accommodation and conformity around these structures is achieved among the different components of the privileged strata, and to which social control is maintained at the base. Authentic democratization in Guatemala would require the incorporation of the excluded majorities in the vital decisions that affect their lives. It would mean political outcomes in the interests of these majorities predicated on the construction of a democratic socioeconomic system, and therefore a massive redistribution of political power, in Guatemala and in Central America. In turn, political power flows from economic power, and economic power is based on control over society's resources, wealth, and culture. Democratization in Guatemala therefore requires a radical redistribution of wealth and power towards what some have coined "the 87 percent majority" (Jonas, 1991).

What about concrete policy recommendations? We could say that, if it is interested in bringing about democratization and development, the transnational elite which controls the levers of global decisionmaking and the gateways to international resources, and its local counterpart among the Guatemalan military, political, and economic elite, "should": promote a far-reaching agrarian reform and income redistribution; organize mass health and educational campaigns and special programs for women and children; encourage independent nation-wide trade unionism and social movements; place local, grassroots leaders in position of authority throughout the state's institutions, with special emphasis on the indigenous and women; ban impunity and purge from the state and punish under no uncertain terms all those responsible for human rights violations and for misuse of state institutions; and so on. But such policies will not come about until or unless they are forced on the Guatemalan state and the transnational elite by the "87 percent majority" or unless the elite is removed from positions of institutional power from which it can veto these policies or even suppress them from the discussion of the policy agenda.

Such policy recommendations are seen by many in the policy and academic community as "unrealistic." The current global capitalist order has achieved a remarkable ideological hegemony, in that the structural constraints it sets have become accepted, and the only alternatives put forward as legitimate and "realistic" are those that respect these constraints. We should recall that the extent of social change may be fixed by historic structures but the outer limits of these structures are always established and reestablished by collective human agency (and our intellectual labor as a form of social action may constrict just as it may extend the proclaimed limits of the possible). Capitalist globalization is the macro-structural-historical backdrop to Guatemala and Central America in the 21st century, but this process is not predetermined insofar as structural change is shaped by agents attempting to influence it from below and from above. Varying degrees of ungovernability and crises of legitimacy characterize country after country in Central America and all of Latin America. The crisis and eventual collapse of the neo-liberal project may create the regional or transnational conditions and spaces through which to promote an alternative - alternatives to the neo-liberal project, alternative viable forms of struggle from civil society, and from the state, if and when the fortress of the neo-liberal state is pried open. The real question as regards democratization and development, therefore, is what are the prospects of the popular majority developing effective new strategies and forms of struggle under the dramatically changed national, regional, and global conditions?

In fact, the dominant groups in Central America have reconstituted and consolidated their control over political society but a new round of popular class mobilization in the early and mid-1990s pointed to their inability to sustain hegemony in civil society. Subordinate groups demonstrated a renewed protagonism at the grassroots level, outside of state structures and largely independent of organized left parties. Indigenous, women's, environmental, neighborhood, peasant, worker, and other social movements have flourished in civil society. The failure of the left to articulate a counterhegemonic alternative and to protagonize a process of structural change from political society has helped shift the locus of conflict more fully to civil society. Given the ability of transnational capital to utilize its structural power to impose its project even over states that are captured by forces adverse to that project, perhaps the real prospects for counterhegemonic social change in the age of globalization is a long march through civil society in the Gramscian sense. This march should be part of a globalization-from-below movement to accumulate counterhegemonic forces beyond national and regional borders and to challenge the power of the global elite from within an expanding transnational civil society. Continued change - in Guatemala, in Central America and in global society at large - will be shaped by conflict and crisis among the summits of power as the hegemonic groups find it increasingly difficult to maintain governability and assure social reproduction, and recomposition of civil society at the base, and by the interplay of the two at the local and the global levels.

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