This important but uneven book analyzes successive phases of post–World War II state intervention in Peru and four other Latin American countries: Argentina, Brazil, Chile, and Mexico. Carol Wise argues that an accumulation of various state-related problems during the initial postwar decades was the major cause of the severe economic crisis that plagued the region during the 1980s. She further maintains that Latin America's dramatic recovery during the 1990s was largely due to the resolution of these problems, with the conspicuous exception of persistently high levels of poverty and income inequality.

Noting that the streamlined Latin American state of the 1990s accounts for approximately the same share of GDP as the grandiose developmental state of the 1960s and 1970s, Wise aptly infers that the critical changes in the state's role have been qualitative in nature. Chapter 1 derives four unwieldy “working hypotheses” from the political economy literature and a sketch of institutional variation between the pre- and postreform periods in the five countries. In a nut-shell, these hypotheses portray bureaucratic autonomy, powerful economic and planning institutions, stable and effective leadership supported by dominant groups, and policy mediation through state-sanctioned peak associations for business and labor as key determinants of policy success. Although each of these four institutional variables could be delineated in generic terms, the author ties them to the postreform period and market-oriented policies (pp. 31–43). Moreover, the dependent variable inexplicably shifts from enhanced economic performance (p. 33) to “effective policy outcomes” (p. 35), “effective modes of economic reform” (p. 39), and enhanced state policymaking (p. 41). The latter pages of the chapter use the four institutional variables to identify the different paths to market reform taken by the five countries.

Most of the book (Chapters 2 to 6) applies this analytical framework to examine successive governments in Peru, where shifts in economic policies and performance have been the most pronounced in Latin America. Unfortunately, the hypotheses remain loosely cast, the criteria for evaluating them are unclear, and the supporting evidence is largely unconvincing. Moreover, Chapters 2 to 5 treat different prereform governments during the 1960s, 1970s, and 1980s, but they are incongruously guided by hypotheses designed to contrast the pre- and post reform periods and awkwardly employ institutional variables that have been fleshed out with reference to market-oriented policies. Although these chapters make valuable contributions to the literature on Peruvian economic policy, they are mostly irrelevant to the book's central arguments. As Wise herself notes, “the story up to 1990 is largely one of opportunities lost and paths not taken” (p. 229).

The changing character of the Peruvian state is finally treated in Chapter 6. The author maintains that relatively modest institutional innovations during Alberto Fujimori's first term (1990–95) played a critical role in the country's spectacular economic recovery, but she suggests that market reforms must be linked to more comprehensive processes of democratic institution building in order to be successful and sustainable over the long haul. Although these general arguments are plausible, the discussion is too cursory and disjointed to link convincingly the four institutional variables to the hypothesized outcomes. Indeed, this chapter shows that new and renovated state economic institutions were largely by-products of market-oriented policies, limited to only a few pockets of efficiency, and subject to Fujimori's direct control. The book's title is thus somewhat misleading.

Wise fails to address directly the key question of whether Fujimori's presidential coup and subsequent constraints on democracy were necessary for the success of market reforms and the limited institutional innovations that did take place. In Latin America, only Argentina and Bolivia have initiated and implemented far-reaching market reforms under democratic governments, and both of these cases are problematic in terms of democratic norms. Similarly, the author acknowledges the extensive power of sinister spymaster Vladimiro Montesinos but does not discuss any role that he might have played in shaping economic policy during the Fujimori years.

In her concluding Chapter 7, Wise provocatively argues that Peru's new democratic government would do well to follow the recent examples of Mexico and especially Chile by moving beyond the standard neoliberal prescriptions of the Washington Consensus to adopt more proactive exportled policies. Far from withering away in the era of globalization, the Latin American state must strategically assume additional responsibilities if the region is to realize its developmental potential.

Throughout the book, Wise's treatment of Peruvian politics and institutions is surprisingly sketchy. For example, she largely overlooks the strong reactive powers of the Peruvian congress and does not distinguish presidential decrees based on claims of constitutional authority from those based on legislative delegation. This distinction is critical for understanding economic policymaking under democratic regimes and the executive-legislative conflict leading up to Fujimori's presidential coup. More generally, the paucity of supporting detail produces ambiguities, apparent inconsistencies, and important omissions that are likely to irritate specialists and confuse general readers. There are also some outright errors. For example, Fujmori did not use a legislative decree to initiate the presidential coup (p. 187); not all departments outside of Lima voted against the 1993 Constitution (p. 195); the so-called Democratic Constituent Congress elected in 1992 did not lack an active opposition, which included members from the traditional parties (p. 211); and, despite the blatant unfairness of the 2000 election, it is highly unlikely that “massive voting fraud” occurred (p. 247).

Nevertheless, the strengths of Reinventing the State out-weigh its significant shortcomings. Wise offers an abundance of valuable information and insights, develops intriguing arguments, and writes in a lucid and accessible style. A focus on the state makes her book more attractive to political scientists than a fine complementary work by John Sheahan (1999), Searching for a Better Society: The Peruvian Economy from 1950. Scholars interested in the political economy of Peru or Latin America will likely find the entire text worth-while. The more general and contemporary chapters should also appeal to a broader audience.