This article examines the relationship between pact-making and democratic transitions in Nicaragua (1988–1997) and El Salvador (1990–1997). We argue that the process of elite bargaining about regime change affects the prospects for the consolidation of democracy. We emphasise three factors: (1) the choices key actors make as they bargain about bargaining, (2) their willingness to ‘under-utilise’ their power and (3) the influence of historical and structural contingencies upon the key choices made. Essential to our discussion of historical and structural contingencies is the interrelation of domestic and international actors and the importance of demilitarisation and institutional reform. We argue that these three factors favoured El Salvador more than Nicaragua, although neither nation has overcome the political polarisation characteristic of transitional regimes.