Moving right along in a further effort to define the differences between Jimmy Carter and Ronald Reagan on foreign policy, we go now next door to the sun-drenched Caribbean.

The Caribbean Basin, as the diplomats would have it (or Central America, if you want to think big about it), is a veritable grab bag of countries ranging from the small (Costa Rica, El Salvador the Dominican Republic) to the minuscule (Grenada, St. Lucia, Barbados). Once described as a "microcosm of global conflict," it has everything an energetic American policymaker could wish for in the way of a challenge.

It has wretched poverty and extreme, entrenched wealth, and botched economies. It has terrorism, from the right and the left. It has military juntas and harsh political repression.It has a solid Soviet presence in Cuba and "anti-imperialist" revolution-for-export by the hot and heavy hand of America's arch-adversary, Fidel Castro.

It has a growing cluster of vulnerable, unstable island mini-states working their way free of colonial rule, and a string of long-established mainland nations increasingly roiled by Marxist insurgencies.

It is the Third World, writ small.

In no two countries are conditions quite the same. But the central problem for American policymakers as well as a fundamental difference in the approaches of Jimmy Carter and Ronald Reagan come nicely into focus in just one: Nicaragua.

Once occupied for 20 years by U.S. Marines and for 40 years the fiefdom of the ruthless and repressive Somozas, Nicaragua was taken over last year by a successful leftist insurrection. After a long and bloody fight, this brought to power the current Sandinista revolutionary government.

The Sandinistas are avowedly Marxist and hotly embraced by Castro. They have close links to the Soviet Union and are much given to Yanqui-baiting. Nicaragua is rated by some as an almost sure-fire "Cuba" in the making.

Others point to a moderate minority in the ruling council and see Nicaragua as authentically nationalistic, justifiably unforgiving to the United States for its long, unwavering support for the Somozas, but susceptible to the careful and restrained exercise of American influence.

On one point, almost everybody agrees. As Nicaragua goes -- to communism, along the Cuban model, or to a relatively pluralistic society, genuinely non-aligned -- so may go a large part of the Caribbean Basin. In El Salvador, Guatemala and Honduras, to name three particularly critical cases, the shockwaves from Nicaragua's almost unprecedented revolution have already had heavy repercussions.

What to do about it? What the Carter administration did, after finding it couldn't beat the Sandinistas, was to join them, jettisoning the Somozas along the way. This year the president won surprisingly strong congressional support for a $75 million aid package for Nicaragua, and is now in the process of disbursing it.

Ronald Reagan and the Republican Party are flat-out against this aid. "We do not support United States assistance to any Marxist government in this hemisphere," says the Republican platform, "and we oppose the Carter administration program for the government of Nicaragua."

A few weeks ago, an NBC "White Paper" called "The Castro Connection" brought us as close as we are likely to get to a genuine presidential debate on the issue.

Said Deputy Secretary of State Warrent Christopher, on behalf of the Carter administration:

"The principal reality in Central America is the reality of change. It's an uncontainable, irrepressible reality. And I think the main thing we have to do is work with that change. . . . I don't underestimate the competition that's provided by Castro and I'm sure he's working hard in Nicaragua. . . . It's a struggle. But we want to be on the right side of that struggle, the democratic side. . . ."

Said Ronald Reagan:

"I disagree with . . . the aid that we have provided for [Nicaragua] because I think we did it under the illusion that somehow we were helping hold off a truly leftist government, that we had some kind of a moderate government there. . . . I think we are seeing the application of the domino theory. . . and I think it's time the people of the United States realize . . . that we're the last domino."

You will be hard put to find a clearer definition of the difference, philosophically and strategically, in the approaches of Jimmy Carter and Ronald Reagan to a basic issue of national security.