In the 1990s, orthodox Hispanic kinship patterns, common to most of Latin America, continued to shape family life in Nicaragua. The nuclear family forms the basis of family structure, but relationships with the extended family and godparents are strong and determine many aspects of Nicaraguan life. Because few other institutions in the society have proved as stable and enduring, family and kinship play a powerful role in the social, economic, and political relations of Nicaraguans. Social prestige, economic ties, and political alignments often follow kinship lines. Through the compadrazgo system (the set of relationships between a child's parents and his or her godparents), persons unrelated by blood or marriage establish bonds of ritual kinship that are also valuable for the individual in the society at large.

Godparents are typically trusted friends of the parents. lower-class families -for whom the compadrazgo has the greatest significance often chose godparents of superior economic, political, or social status, who are in a position to help the child in the future. Large landowners, affluent businesspeople, government officials, and political leaders may become godfathers to the children of social inferiors in order to build up a system of personal loyalties. In such cases, compadrazgo becomes the basis of a network of patronclient relationships.