This document examines changes in Latin American economies and educational systems during the 1980s and the responses of the Latin American democracies. Following a description of changes in Latin American public expenditures in the 1980s and subsequent adjustments in education expenditures, the dynamics of the adjustment in Costa Rica and Venezuela are detailed. Background information on education in Costa Rica and Venezuela is provided and inequalities in educational quality and access in those countries are identified. The document describes the countries' economic crises of the 1980s and the resulting changes in the amount and structure of educational expenditures and other distortions of the countries' financial adjustments. Several related effects are also described:(1) a decline in teacher salaries and the quality of school buildings; (2) changes in teacher-student ratios; (3) an increase in the percentage of students repeating grades; (4) increased or persistent educational inequality among different income groups; (5) changes in the numbers of institutions, teachers, and students by educational level; and (6) a decrease in instructional effectiveness. Last, the increased inefficiency of the educational decision-making powers in Latin America is described and suggestions to reverse the recent decline are proposed. Included are 20 tables and 4 figures. (CLA)