El Salvador has an excellent relationship with the United States, solidified by years of close cooperation during the civil conflict in the 1980s and by U.S. support for reconstruction and reconciliation after the 1992 Peace Accords. Most Salvadorans view the United States in a favorable light. Currently, there are about 2 million Salvadorans living in major U.S. cities.

El Salvador is a multiparty democracy with an independent judiciary. Elections for the single-chamber 84-seat Legislative Assembly are held every three years, upcoming election is in March 2006. The president is elected for a single term every five years.

In March 2004, the winning presidential candidate was Elias Antonio Saca, from the right-of-center, business-oriented ARENA party. This marked the fourth time in a row that ARENA had won the presidency. President-elect Saca continues his predecessor Francisco Flores' advocacy of free trade, openness to foreign investment, and private sector development. ARENA now holds 29 seats in the Legislative Assembly. This minority status makes it occasionally difficult for ARENA to pass legislation, although it can make temporary alliances with the rightist National Conciliation Party (PCN).

The other major party is the leftist FMLN, which has since 1992 peace accords, has moved from being an insurgent organization to becoming a political party with socialist tendencies. Since 1997 the FMLN also has controlled the most populous of the country’s 262 municipal governments, including San Salvador. Moreover, in the March 2003 Legislative Assembly and municipal elections the FMLN won enough votes to regain 31 seats and maintain control over the most important municipalities. Generally speaking, the FMLN seeks a greater state role in the economy. FMLN leaders have talked of rolling back, or at least "reviewing," the privatizations of the late 1990s. The FMLN leadership argues that the ARENA administrations'liberalization policies have not brought economic security to the majority of Salvadorans.