Mary Clark chose to study Costa Rica's neoliberal reforms for several reasons. It is Latin America's oldest welfare-state democracy, historically a favorite of international donors and lenders. But, more recently, the World Bank and the Inter-American Development Bank “find Costa Rica to be one of the most difficult Latin American countries in which to work” (p. 1). In the 1980s, the country's import-substitution model having been exhausted and the state's venture as an industrialist having turned out to be a costly mistake, the economy was “in desperate straits” (p. 44). In the throes of a “balance of payments crisis, rising inflation, and pressure on the colón” Costa Rica was among the first to default on its international debts. In 1982, “the economy was in a nose-dive, hitting rock bottom in the same year” (p. 45). Yet the country's decentralized governmental structure affords multiple veto points to well-organized interests, making it impossible to administer the “shock therapy” favored by many international economists.

Nevertheless, Clark claims that the very slowness of the country's policy process is a plus. Although acknowledging the opportunity costs of procrastination and the danger of succumbing to reform fatigue, she concludes that slow-paced reforms, compromise among contending interests, and compensation for losers, if “slow, messy, and expensive” (p. 138), constitute a more viable political combination than shock therapy.

Costa Rican gradualism worked best with what are called easy or “first-stage” reforms. These included reducing tariffs, granting tax exemptions to exporters of nontraditional products and the tourist industry, doing away with agricultural subsidies, allowing private banks to compete with state banks, and dismantling an inefficient, corrupt, and unpopular public industrial corporation. These measures were easy to implement because either they were amenable to execution by presidential decree or, although they created losers, the reforms spawned a host of new enterprises that soaked up rural unemployment and organized themselves politically, lobbying for the preservation and extension of neoliberal policies. Even at this stage, however, it took leadership, funding, and technical assistance from abroad to get the policy ball rolling in the “right” direction.

But when it came to more difficult “secondstage reforms,” gradualism made only minimal progress. State monopolies and social services bureaucracies have not been able to keep up with demand or technology, and hence are a drag on the economy. But their performance has not been altogether bad. Enjoying a certain amount of public support, they are able to fend off encroachments on their turf with tactics ranging from managerial foot dragging to strikes and even violence (as in the case of a stevedore union in the Caribbean port of Limón). The most that reformers have been able to accomplish at the second stage is the promotion of “slow demonopolization” or “creeping privatization,” wherein private firms gain small footholds and niches, which, Clark projects, will in time result in their being “awarded equal status with public entities,” as happened with the banks (p. 101).

This book is well written and, when it comes to describing neoliberal policies and explaining why reformers were stalled at the second stage, persuasive. Where it falls short is in evaluating the content of secondstage neoliberal policies and, what is the other side of the coin, the performance of Costa Rican state agencies in the fields of energy, telecommunications, casualty insurance, ports and other public works, and healthrelated services.

Clark avers that “by the 1990s, secondstage reforms could no longer by avoided [sic]” (p. 68), which implies an objective problematic condition requiring an urgent remedy. This was true even in the case of the national healthcare system, “clearly the crown jewel of Costa Rica's welfare state” (p. 88). It is overcentralized and bureaucratic, riddled with inefficiencies, and hobbled by obsolete managerial and accounting systems, and it treats patients in a highly impersonal, assembly-line fashion. Understandably, “the middle and upper classes” are “using disposable income to purchase better quality clinical consultations, lab tests, and out-patient procedures from private sources” (p. 95).

Yet those who would benefit the most from private suppliers, “especially the young and the poor who rely disproportionately on state services,” are “disperse,” “divided by class, geography, and other factors,” and relatively satisfied with the system's performance (perhaps, although Clark does not say so, for lack of experience with alternatives, because of low expectations, or because, the service being nominally “free,” beggars can’t be choosers). Facing a situation in which opponents to reform are well informed and organized but potential beneficiaries are mired in “collective action problems,” politicians “run great risks” if they attempt to do more than tinker with the system (pp. 101–2).

Nevertheless, Clark is rather philosophical about the failure to overhaul the welfare state or break up state monopolies or quasi-monopolies. In her concluding comments, she observes that along with their counterparts in Brazil and Uruguay, Costa Rican reformers “may not be traveling to the same destination as those pursuing rapid and deep liberalization; perhaps they have a better one in mind,” a “‘third way’ or ‘middle road’ to reform, acknowledging the shortfalls in old statist models but seeking greater responsibility for the public sector than pure neoliberalism allows” (p. 146).

What the specifics of this elusive alternative to neoliberalism may be Clark leaves unsaid. This reader, at least, was left with the impression that she has yet to decide whether or not the current state of Costa Rica's medical system, public utilities, and infrastructure cry out for market solutions. If they do not, then the reformers’ lack of success in these areas has been a blessing in disguise. But if they do, then gradualism, and the political structures that give rise to it, will have to be reconsidered.