Luis Arce, a quiet economist who will be sworn in as Bolivia’s president on Sunday after a landslide election win, knew where he stood in the political spectrum as a young teenager in La Paz, when he picked up the writings of philosopher Karl Marx.

Arce steered the Andean country’s economy for over a decade under former leader Evo Morales, an ebullient leftist who resigned last year after an election dogged by disputed claims of fraud sparked widespread protests. Arce was often seen as a moderating influence to more radical elements in Morales’ Movement towards Socialism party...