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Undermining the State from Within pulls back the curtain on the counterinsurgent state to better understand how conflict dynamics affect state institutions and continue to shape political and economic development in the postwar period. Drawing on unique archival and interview data from war and postwar Central America, this book illuminates how counterinsurgent actors, under the pretext of combatting an insurgent threat, introduce alternative rules within state institutions, which undermine core activities like tax collection, public security provision, and property administration. Moreover, it uncovers how the counterinsurgent elite outmaneuvers governance reforms during democratic transition and peacebuilding to preserve the predatory wartime status quo. In so doing, this book rethinks the relationship between war and state formation, challenges existing scholarly and policy approaches to peacebuilding and post-conflict institutional reform and contributes a new understanding of what civil war leaves behind in an institutional sense.