While leftist governments have been elected across Latin America, this 'Pink Tide' has so far failed to reach Peru. Instead, the corporate elite remains firmly entrenched, and the left continues to be marginalised. Peru therefore represents a particularly stark example of 'state capture', in which an extreme concentration of wealth in the hands of a few corporations and pro-market technocrats has resulted in a monopoly on political power. Post the 2016 elections, John Crabtree and Francisco Durand look at the ways in which these elites have been able to consolidate their position at the expense of genuine democracy, with a particular focus on the role of mining and other extractive industries, where extensive privatization and deregulation has contributed to extreme disparities in wealth and power. In the process, Crabtree and Durand provide a unique case study of state development, by revealing the mechanisms used by elites to dominate political discussion and marginalize their opponents, as well as the role played by external actors such as international financial institutions and foreign investors. The significance of Crabtree's findings therefore extends far beyond Peru, and illuminates the wider issue of why mineral-rich countries so often struggle to attain meaningful democracy.

Governments fail to provide the public goods needed for development when its leaders knowingly and deliberately ignore sound technical advice or are unable to follow it, despite the best of intentions, because of political constraints. This report focuses on two forces—citizen engagement and transparency—that hold the key to solving government failures by shaping how political markets function. Citizens are not only queueing at voting booths, but are also taking to the streets and using diverse media to pressure, sanction and select the leaders who wield power within government, including by entering as contenders for leadership. This political engagement can function in highly nuanced ways within the same formal institutional context and across the political spectrum, from autocracies to democracies. Unhealthy political engagement, when leaders are selected and sanctioned on the basis of their provision of private benefits rather than public goods, gives rise to government failures. The solutions to these failures lie in fostering healthy political engagement within any institutional context, and not in circumventing or suppressing it. Transparency, which is citizen access to publicly available information about the actions of those in government, and the consequences of these actions, can play a crucial role by nourishing political engagement.

Using a framework that highlights how societal and international factors have shaped state capacities, Philip Mauceri examines Perus volatile politics in the countrys move from a developmentalist state to neoliberalism. He explores the challenges to state authority during the military regimes reformist experiment, arguing that they were intensified in the 1980s by poor planning and limited policy choices. He then examines how social and international conditions have influenced the Fujimori regimes attempt to retool the state along neoliberal lines. }Using a framework that highlights how societal and international factors have shaped state capacities, Philip Mauceri examines the volatile politics in Peru from the Velasco through the Fujimori regimes as the country has moved from a developmentalist state to neoliberalism.Dr. Mauceri begins by reassessing the reformist experiment of the Peruvian military regime (19681980), arguing that it led to the development of unexpected challenges to state authority, both from new social actors and international financial organizations. During the 1980s, these challenges intensified, made even worse by poor planning and limited policy choices. The author then argues that the attempt by the Fujimori regime, backed by a neoliberal coalition, to retool the state indicates the degree to which state capacities are determined by social and international conditions. Mauceri also gives special attention to the relation between changing state power and social control. Separate chapters on the evolution of a Lima shantytown and the Shining Path examine how changes in state-society relations have had impacts at the grassroots level.

The political economic history of Latin America in the post-World War II era has largely been one of underachievement and opportunities lost. This all changed with the wave of market reforms that were implemented in the 1990s. However, the precise role of these reforms as an agent of change is still hotly debated. This in-depth analysis of the Peruvian case argues for an explanation that treats institutional innovation and state reconstruction as necessary conditions for the apparent success of the market in Latin America. Exploring how state intervention has been both the cause of Latin America's economic downfall in the 1980s and the solution to its recovery, Reinventing the State analyzes three main phases of state intervention: the developmentalism that lasted until 1982, the state in retreat of the 1980s, and the streamlined state of the 1990s. Through a comprehensive examination of the Peruvian experience, the book explains the country's impressive turnaround from the standpoint of institutional modernization and internal state reform. Written for a broad academic audience, the public-policy community, and the private sector, this book is also meant as a quick primer for any journalist, consultant, or private-sector analyst in need of an overview of the region's market-reform effort and how it has played out in Peru. Carol Wise is Associate Professor, School of International Relations, University of Southern California.