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This thesis examines Paraguay’s transformation from a peripheral actor in the South American drug trade into a paradigmatic case of co-opted sovereignty—a form of criminal governance in which illicit actors are embedded within state institutions and exercise authority through them. Building on the literatures on rebel governance, criminal governance, and state–criminal relations (Arjona 2016; Mampilly 2012; Lessing 2021; Feldmann & Luna 2022), it shifts the analytical focus from governance operating alongside or against the state to governance enacted through the state itself. Through emblematic cases such as Operation Ultranza PY, Operation Turf, the assassination of prosecutor Marcelo Pecci, and the rise of Sebastián Marset, the study traces how political and criminal elites have fused their interests. The symbolic architecture of democracy— elections, legislatures, courts—remains intact, yet its functions are repurposed to sustain illicit accumulation. These arrangements operate in full view, blending parasitic, symbiotic, and predatory relationships into a single adaptive system. By framing Paraguay as a case of co-opted sovereignty, the thesis challenges the overused “narco-state” label and offers a lens for understanding how organized crime can become a partner in governance. This case points to a wider regional trend, calling for a rethinking of sovereignty itself and for accountability mechanisms capable of confronting deeply embedded state–criminal integration.