This paper reviews how Nicaragua has recovered from Hurricane Mitch of October 1998. In particular, it examines how the assumptions and claims that were made during initial recovery planning have proven relevant in light of subsequent development. One must consider the response to Hurricane Mitch from the perspective of the broader trends that have driven recovery, including household, community and government initiatives and the wider economic context. Recovery efforts have not 'transformed' Nicaragua. In fact, market upheavals and livelihood changes in rural areas have had a more profound impact on poverty profiles than recovery programmes. Social protection programmes have been piloted, but patron-client ties and relations with aid providers are still more reliable sources of support in a time of crisis. Risk reduction has become more deeply integrated into the rural development discourse than was the case before the disaster, but risk reduction initiatives continue to place undue emphasis on hazard response rather than addressing vulnerability.