How States Shape Markets in Latin America. Palgrave Macmillan, 2025.

Why have Latin American countries developed sharply divergent financial systems—and how do these systems shape their national growth strategies? While Chile has built large capital markets where companies issue equity or long-term bonds, and Brazil has scaled up long-term credit for firms, Argentina lags behind in both. What accounts for this variation?

This book uncovers the political origins of national financial systems by looking at how states shape domestic markets. It traces how coalitions of elite executive-branch officials reconfigured markets through key institutional levers. The book zeroes in on two critical policies: the governance of the private segment of the pension system and the deployment of state-owned banks as long-term lenders. These tools, wielded by shifting coalitions of political técnicos with distinct policy orientations, drive different modes of state involvement in credit and capital markets and have produced remarkably different financial architectures.

Drawing on the contrasting cases of Chile and Brazil, the book unveils how elite technocrats with neoliberal or neo-developmental orientations used institutional tools to reconfigure financial systems. In Chile, political técnicos consolidated a market-led model by dismantling the state’s capacity to be proactive in investment finance and by setting up regulation that induces private pension funds to invest in domestic equity and bonds. In Brazil, a new developmental coalition expanded the scale and the role of BNDES and activated state-owned-enterprise pension funds as institutional investors, steering them toward domestic equity, venture capital, and private equity.

By revealing how political struggles inside the state shape financial markets, the book offers an innovative view of statecraft and marketcraft in contemporary Latin America. It dialogues with scholars of political economy, Latin American development, and investment finance-economic growth. Reaching out beyond academia, it also provides a compass for policy entrepreneurs working on development across the Global South.