Evo Morales assumed office in January 2006 with a resounding mandate from marginalized indigenous peoples to reinvent Bolivia. Five hundred years of colonial and republican rule, combined with 20 years of neoliberal economic policy in this poorly consolidated democracy, constrained his ability to reshape the country during his first term in office. Morales still faces the fundamental challenges of (1) national oligarchies, (2) limited administrative capacity, (3) rent seeking and institutionalized corruption, (4) social movements, and (5) transnational actors. Rather than being distinct, these challenges are overdetermined: the economic challenges of transforming an extractive economy are intertwined with the lack of government capacity that is the legacy of exclusionary social and political processes since the Spanish conquest. Armed with the firm political will embodied in the new constitution, he has consolidated his support, and this has allowed his government to begin its second administration in a better position than almost all its predecessors as it attempts to create a more equitable society.