The purpose of this dissertation is to study not only relations between Latin America and the United States, but also Latin American states with each other. It specifically aims to examine the extent to which the United States, the principal hegemonic power in the Americas, can play a constructive role by providing regional public goods. These goods include conflict resolution and economic progress. Although the United States has the potential to create such goods, it also has the potential to create public bads in the form of regional instability, political terror, and economic stagnation. This raises two fundamental research questions: Under what conditions can Washington play a positive role and if these conditions cannot be met, under what conditions can Latin American nations bypass the United States and create their own economic progress and conflict resolution strategies? Drawing upon qualitative research methods and case studies that have attracted scant academic attention, this dissertation finds that through regional multilateral diplomatic negotiations, the United States can play a positive role. However, due to U.S. parochial economic interests and the marginalization of diplomacy as a foreign policy tool, these conditions rarely occur. This research further finds, however, that through flexible regionalization Latin American nations can bypass the United States and create their own goods. Supported by an alternative regional power, flexible regionalization relies upon supranational institutions that exclude the United States, emphasize permanent political and economic integration, and avoid inflexible monetary unions. Through this type of regionalization, Latin America can decrease U.S. interference, sustain political and economic autonomy, and open space for alternative conflict resolution strategies and economic policies that Washington would otherwise oppose. This dissertation is academically significant and policy relevant. First, it reconsiders diplomacy as an instrumental variable for peace and offers generalizable results that can be applied to additional cases. Moreover, finding that Latin American countries can address their own regional issues, this study recognizes the positive agency of Latin America and counters the negative essentialization commonly found in U.S. academic and policy research. Finally, this research offers policy advice for both the United States and Latin America.