In this article, we argue that a political sociology perspective facilitates analysis of the potential and limitations of education to contribute to national development in Latin America. Such a perspective enables policy makers, practitioners, and researchers to take into account historical forces, institutional contradictions, and contextual factors, both national and international, that shape the possibilities of educational and social change occurring - and whether such change benefits the least privileged members of a society. We take the position that a political sociology of education in Latin America must begin with an examination of the role of the state in determining what type of development will take place and who will benefit from social policy. There is a need to consider what type of state and political regime supports which kind of education, for whom, and for what purposes (La Belle, 1986). After defining the state and its relationship to education, we make the case that the state in Latin America is further conditioned by the neoliberal economic and social policies being followed by countries in the region in order to gain access to international capital and markets. We examine how the structural adjustment policies recommended by the World Bank, the International Monetary Fund, and national technical assistance agencies like USAID have affected the governance, financing, and provision of education to various populations. We argue that gains made in extending education to previously neglected populations during the period from the late 1960s to the mid-1980s have been substantially eroded by the introduction of market-based policies designed to decentralize and privatize education. We illustrate how these policies have affected equality of educational opportunity in several countries, notably Nicaragua, Chile, Argentina, and Brazil. At the same time, we provide examples of grassroots movements that counter education policies that serve elite interests. Such programs provide an alternative to externally imposed and top-down reforms, while equipping individuals and their collectivities with the means to articulate their interests and gain access to needed resources and services. Defining the State and Its Relationship to Education Generally, we view the state as a pact of domination, as an arena of conflict, and a purposeful actor that must select among competing political projects. We agree with Cardoso (1979:38) that the state should be considered the basic pact of domination that exists among social classes or factions of dominant classes and the norms which guarantee their dominance over subordinate strata. As an arena of confrontation, the state displays the tensions and contradictions of competing political projects as well as the political agreements of civil society. Moreover, social class, racial, ethnic, gender, geographical, ethical-moral and religious factors influence the actions of the state in legislating and executing social policies. According to Offe (1984, 1985), one of the central issues confronting the state is the contradiction between the state's need for capitalist accumulation and the need to legitimate the capitalist system itself. For Offe, the state also is a mediator in the central crisis of capitalism, which is the contradiction between the socialization of production and the private appropriation of surplus value. In order to mitigate these fundamental contradictions, the state is forced to increase its institutional functions (also Carnoy, 1984; and Torres, 1989). Although the state in a capitalist society, by its very nature, favors policies that are directed toward the constitution and reproduction of the capitalist system (Offe, 1975 and 1984), it also is the representative of the nation as a whole and, in liberal democratic societies, is a proponent of the extension of personal rights and greater mass participation in the determination of public policy (Carnoy and Levin, 1985; and Bowles and Gintis, 1986). …