The shift left in Latin American politics has revealed critical weaknesses within the dominant structural, state‐ and society‐based explanations concerning the politics of development in the region. This article argues that while elements of each remain relevant, there is a strong case for adopting a ‘relational’ frame of analysis that can capture the specific ways in which the Left came to power, and the unfolding implications for democracy and development. This relational approach focuses on how the new social and political economy basis of the new ruling coalitions and alternative geopolitical alliances shape politics and the prospects for development in the region.

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The rise of the new Left has had an important impact on the politics of poverty reduction in Central America, upsetting the status quo for elites in the case of Honduras. After Hurricane Mitch in 1998, international pressure on elites to focus on poverty reduction had only a limited effect. But from 2006, the availability of aid and other resources from Venezuela facilitated a break with donor-sponsored agendas and heralded a new phase in the politics of poverty reduction. Then, in 2009, a coup against Liberal President Manuel Zelaya was precipitated by his 'shift left' whilst in office. This crisis unfastened the apparent stability and long-standing norms of Honduran political life. Drawing on recent fieldwork, this paper uses a political settlements approach to analyse the commitment and capacity to address social policy issues in Honduras through this period. The paper considers the significance and impact of external ideas on the changing distribution of power in society, and the implications for inclusive development.