The paper aims to explore the connections between rule of law, state capability and development in Latin America. The interaction between these areas faces different problems and solutions than in other western countries. There is a lack of analysis of how the rule of law can effectively improve the state capability and therefore, promote the social and economic development. A new approach can help to understand that the vices of rule of law are part of the problems that undermine state capability. Rather than construct general solutions based in abstract principles of rule of law, the approach should understand how the problems related to the state capacity are caused by distortions in the rule of law, and how the enhancement of the rule of law can be an effective solution for the promotion of development, considering formal and informal institutions.