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This paper explores why two countries of Latin America -the world's most violent region- have significant differences in civil-state-military relations. Colombia and Venezuela are remarkably similar, share a border, and were even part of the same country in the 19th century. Despite these similarities, they exhibit divergent patterns of criminal governance and divergent relationships between the state, the criminal organizations and the social movements. I use 210 in-depth interviews (30 in Venezuela and 180 in Colombia) and a two-year fieldwork to show that countries with decentralized states tend to have more versatile legal and illegal organizations with greater negotiating power in the social contract. My results suggest that the structure of the state plays a crucial role in shaping the social dynamics, leading to a redefined understanding of power dynamics and governance in the context of Latin American political landscapes.