A sophisticated deconstruction of Latin American privatization that puts politics at the center. In the 1980s, privatization remained piecemeal in Argentina, Peru, and Brazil -- which all lacked the political will -- while Chile forged ahead. In the 1990s, however, this began to change. In Argentina, President Carlos Menem promoted a remarkably successful privatization program that nevertheless produced a downside, including rampant rent-seeking and the manipulation of a weak judicial system. Even worse, a dysfunctional two-sector economy was created: the part of the private sector tied to the dollar faced ferocious foreign competition, while the "unpegged" private sector got to control former state monopolies, encountered little competition, and reaped high profits. Meanwhile, the cronyism between Menem and privatization's beneficiaries did little to improve the country's institutions and actually provoked opposition to privatization over time. In Peru, Alberto Fujimori's program started late but was as far-reaching -- and personalized -- as Argentina's. In contrast, Brazil saw privatization slowly gain momentum by 1998 as elites used it to tackle the state's chronic fiscal problems; yet the many hidden deals involved could come back to haunt the program. Manzetti concludes that durable and sound policies must be sheltered from pork-barrel politics by strong institutions and that economic reform must be reinforced by responsive legislatures and independent judiciaries.