Abstract

This article analyzes the evolution of state capacity in Peru during the recent commodity boom. Peru’s economic growth happened in a context in which inclusive democratic institutions were at play for the longest period ever registered in the country and at a time when political elites decided to invest considerable resources in developing state capacity. This case illustrates how boom-led economic growth can lead to the institutional strengthening of a weak state. However, state capacity continues to be low in Peru. The causal mechanism that yields such continuity differs from those entertained in classic path-dependent explanations of state capacity in Latin America. The article identifies a novel mechanism that helped reproduce the Peruvian path intertemporally. This relational mechanism suggests that state capacity remains low because of the relatively enhanced capacities of state challengers to locally fend off and contest an otherwise much stronger state apparatus. The article argues, on that basis, the need to employ a relational analysis that gauges net state strength with respect to the power acquired by relevant non-state actors who might challenge state authority across different local arenas. Classic conceptualizations of state capacity are indeed relational, but conventional applications are predominantly unilateral and, thus, misleading. Unilateral notions of state capacity are those that focus on either state efforts and investments to assert state capacity or, alternatively, on the presence of challenges that curtail the levels of actually observed state capacity.