The article analyzes the relationbetween the Inter-American Development Bank’s Modernization of the State programsand the state capacity of Brazil and Argentina during the Neoliberal Era in Latin America (1990-2002).The development studies indicate that state capacity is a precondition for any successful development strategy. Thus, agreater state capacity could be expected from those countries who participated in theseprograms, but the data obtained does not permit this conclusion.The article analyzes the relation between the Inter-American Development Bank’s Modernization of the State programs and the state capacity of Brazil and Argentina during the Neoliberal Era in Latin America (1990-2002). The development studies indicate that state capacity is a precondition for any successful development strategy. Thus, a greater state capacity could be expected from those countries who participated in these programs, but the data obtained does not permit this conclusion.