Following thirty years of Washington Consensus policies, the new millennium saw Latin America adopt a wide range of new economic and social development policies that were leftist-oriented. A new role was seen for the state, including the state at local level. In Colombia, the city of Medellín has spearheaded this new movement for local activism, and the early results of this radical new trajectory have been positive.

This Background Note argues that Medellín’s progress in building a ‘local developmental state’ needs recognition for promoting enterprise and social inclusion. However, it also cautions against complacency, arguing that important adjustments are needed for more rapid and sustainable progress in combating poverty, underdevelopment and inequality in Medellín. The detrimental role of microenterprise development is highlighted as one important aspect of Medellín’s policy package that needs rapid re-evaluation.

This Background Note is based on field visits to Colombia in 2010 and early 2011, using data from round-table discussions, case studies of microenterprises and key informant interviews carried out in Medellín.