As an indigenous farmer living on a small island in the southeast of Chile and lacking basic services and economic security, how does one seek to improve one’s conditions of livelihood? People in the indigenous community of Isla Huapi live precarious lives, and are eager to participate in the government’s development initiatives aimed at economic enhancement and infrastructural improvements, such as potable water and electricity. Given a history of state neglect and discrimination, this readiness to engage with the state is worthy of attention. Based on nearly one year of ethnographic fieldwork on Isla Huapi, an inland island and home to 125 Mapuche farmer families, this dissertation analyzes relations between state presence and state retreat; social and economic dependence and independence; some people’s enrichment and inequality, as well as; conceptions of a “common good” as opposed to “self-interest”. Drawing on theoretical concepts of state effects (and affects) and neoliberal development, and hope and aspiration as analytical tools, I examine the way in which islanders and state actors alike negotiate contradictions of “neoliberal state development” in their everyday lives.