Current international development policies promote both free markets and democratic states through privatization and decentralization programs. Building on T.H. Marshall’s concept of citizenship, this article examines how these programs have affected the rights associated with citizenship in Bolivia since 1993 when the administration of President Gonzalo Sänchez de Lozada introduced a broad set of economic and political reforms. His administration sold state firms that had accounted for 50% of government revenues at the same time as it adopted a new constitution that recognized the multicultural and pluri‐ethnic nature of Bolivian society. His administration also began decentralization programs in government, health and education that transferred 20% of national revenues, as well as the responsibility for providing services, to municipal governments. I show how current development practice has strengthened a neoliberal citizenship regime in which civil rights associated with ownership of private property, and political rights associated with formal democracy and representation, have been promoted at the expense of social rights associated with access to health, education and welfare.