Bryan Caplan returns from South America not with a standard travelogue, but with a scathing indictment of how bureaucratic inefficiency and political ideology actively destroy the potential of two fascinating nations. While most travel writing focuses on scenery or cuisine, Caplan zeroes in on the friction between government policy and human experience, arguing that Peru's obsession with "papers please" and Bolivia's lingering socialist legacy are the true barriers to prosperity and enjoyment. For the busy reader, this is a masterclass in how to diagnose institutional failure through the lens of a single trip, transforming a family vacation into a data-rich case study on the cost of bad governance.
The Bureaucracy of Tourism
Caplan's most striking observation concerns the paradox of underpricing and over-regulation in Peru. He argues that the government's attempt to ensure "fairness" by keeping Machu Picchu tickets cheap has backfired, creating a nightmare of security theater. "Peru in general, and Machu Picchu in particular, had the most fascist 'papers please' system I've ever encountered," Caplan writes, noting that the need to match names on tickets to passports for thousands of daily visitors is a direct result of resale paranoia born from artificial scarcity. This framing is powerful because it reframes a common travel annoyance not as a cultural quirk, but as a predictable economic outcome of price controls. The logic is sound: when you suppress prices, you create black markets; when you try to stop the black market, you impose crushing administrative burdens on honest citizens.
"In order to preserve this atavistic fairness regime, the Peruvian government dumps a dozen bitter buckets of ice-cold bureaucratic water on every visitor to its most amazing archaeological site."
The author's frustration is palpable, yet his analysis remains grounded in the specific mechanics of the failure. He details how a website glitch cost him $400 and how the insistence on cash-only transactions for site tickets ignores the reality of modern finance. Critics might argue that the government has a duty to prevent ticket scalping to ensure access for locals, but Caplan's point stands that the current system punishes the majority to police a minority. The result is a system where "Machu Picchu is so jaw-dropping that it would have been worth three dozen bitter buckets of ice-cold bureaucratic water," yet the administration chooses to drown the experience in red tape.
Infrastructure as a Political Statement
Shifting to Bolivia, Caplan contrasts the chaotic management of Peru with the surprising efficiency of La Paz's cable car system, Mi Teleférico. He presents this infrastructure not just as a transit solution, but as a rebuke to the stagnation of the West. "The cable cars of La Paz are a modernist and YIMBY marvel, a taste of Japan in the high Andes," he observes, highlighting that the first line was built in just 19 months for $54 million. This serves as a stark counter-narrative to the usual perception of developing nations as incapable of complex engineering. The author uses this success to launch a broader critique of the "anti-impact standard" that he believes hampers progress globally.
"A roaring reproach to the state of California? Absolutely."
Caplan's comparison is sharp, suggesting that the speed and cost-effectiveness of the Bolivian project should shame slower, more expensive Western counterparts. However, this praise is tempered by the reality of the country's political volatility. The piece notes the recent electoral defeat of the Movimiento al Socialismo (MAS) party, which saw their vote share drop to a mere 3%. The author describes the political landscape as having undergone "arguably the greatest reversal of fortune in the history of modern democracy," yet the transition remains messy. While the new administration promotes a "Capitalism for all" slogan, Caplan notes that teamsters are already protesting fuel subsidy cuts, blocking roads and creating a volatile environment for travelers and investors alike.
The Human Cost of Policy
Beyond the economics, Caplan touches on the human dimension of these policy failures, particularly regarding health and safety. The family's trip was marred by a respiratory illness, but the author also highlights how visa and vaccine requirements create false impressions of danger. He points out that the requirement for a yellow fever vaccine, despite near-zero prevalence of the disease, creates a "false impression that Bolivia is teeming with yellow fever." This is a crucial insight into how well-intentioned but outdated regulations can damage a country's reputation and economy. "All of my experience with Bolivia's visa situation strongly confirms the Lawson-Roychowdhury result... that visa requirements drastically reduce tourism," Caplan writes, linking his personal experience to broader economic research.
"The lowest-hanging fruit of economic reform for both Peru and Bolivia is to privatize archaeological and geological and tourist sites."
Caplan's proposed solution is radical in its simplicity: let the market handle access. He argues that if Machu Picchu were run like a business, it could operate 24 hours a day, using price to ration access rather than queues and bureaucracy. This would generate revenue for maintenance and expansion, potentially funding more cable cars and better infrastructure. While critics might worry that privatization would price out local citizens, Caplan suggests that the current system of underpricing and over-regulation is already failing everyone. The author's confidence in this approach is bolstered by the visible success of the cable cars, which he describes as "spotless, reliable, cheap, and apparently queue-free."
Bottom Line
Caplan's piece is a compelling argument that the biggest obstacles to development in Peru and Bolivia are not a lack of resources or talent, but a rigid adherence to inefficient bureaucratic norms and ideological dogma. His strongest asset is the ability to translate personal frustration into a structural critique, using the specific failures of ticketing and visa processes to illustrate a broader pattern of institutional decay. The piece's vulnerability lies in its reliance on a libertarian framework that may underestimate the social complexities of implementing such rapid privatization in politically fragile states. Nevertheless, the core message is clear: until these nations stop treating their greatest assets as political tools and start treating them as economic engines, they will continue to squander their potential.