The study, an institutional, andgovernance review of Bolivia, describes the transformationof the country's political economy as of the 1980s, theaim for consistent macroeconomic stability, and, theconsolidation of the democratic political regime. However,despite a number of bold reforms to develop market-orientedsystems, and in contrast with government efforts, thequality of public services remained low. Namely, becausepublic sector reforms were not implemented, and because ofsymptomatic institutional weaknesses; for althoughassistance was provided to modernize the civil service, andimprove public administration, the lack of governmentcommitment to a changing program focus, precluded noticeableresults. The current reform agenda has identified the needfor state modernization, governance and accountability, andjudicial reform, addressed within the National IntegrityPlan, to combat corruption, and other symptoms of publicsector dysfunction. The study presents a blunt vision ofBolivian public administration, through the absence of afunctioning bureaucracy, reviewing the legal framework andorganizational structure, with an emphasis on the"informality" of public administration, - achallenge for institutional development. But the deepercauses of poor public sector performance, lie on thepatrimonial dynamics of party politics. Recommendationsinclude parallel advances between public, and market sectorreforms, reliable external controls, and strengthenedcapacity of the public sector.