Sometimes it seems that Central America is unwilling or unable to make the connection between strong institutions and a free and just society. The privation in the northern triangle—Guatemala, Honduras and El Salvador—that has sent thousands of migrants to the U.S. border in search of work and a better life is ultimately the result of failed institutions.

The bloody upheaval in Nicaragua is another case in point. Since April 19 more than 300 people have been killed while protesting against strongman Daniel Ortega, according...