Delirium, By Laura Restrepo, trans Natasha Wimmer

Take the cable-car that climbs up the sheer wooded slopes that flank Bogotá on its eastern side, and you will be rewarded with one of the most spectacular urban panoramas in the world. The Colombian capital, from the skyscrapers clustered beneath to the distant barrios, lies spread out like a map, while in the church of Monserrate that crowns the hill rests a tormented Baroque figure of Christ, the object of prayer and pilgrimage. "Poor Christ, so grievously mistreated," thinks the kind-hearted leftist-atheist hero of Delirium, "How plain your hurt is, and how much this city of yours resembles you".

Laura Restrepo's touching, compelling and beautifully crafted novel is, on one level, a work of historical fiction. Set in the mid-1980s, to a soundtrack of disco, Flashdance and Celia Cruz, it revisits the frenzied heyday of the cocaine baron Pablo Escobar, who twisted the rapacious Bogotá elite and thus Colombia itself around his infinitely crafty fingers. "The fat guy," as one of his jittery enforcers puts it, "has already swallowed us whole".

Restrepo paints the pervasive misery that cocaine cash (and the misbegotten US "war on drugs") brought in brief, shocking strokes, from the hooker murdered in a sado-masochistic show staged to arouse a paralysed oligarch to Escobar's own vengeful campaign, via bomb and bullet, "to spend my fortune making this country weep". However, her focus lies elsewhere, on the family cruelties and lies of the elite that made them so vulnerable to moral and financial kidnap by this thug: "all those years of secret lives and hidden loves".

Agustina, the troubled and apparently "psychic" daughter of a stiff patriarchal clan, has suddenly slipped into a "quagmire of madness" after years of bipolar swings and dips. Her husband Aguilar – once a professor, but now a pet-food salesman – rescues her from a hotel. With help from her free-spirited Aunt Sofi, he sets about piecing together the "catalogue of basic falsehoods" that has controlled her rigid family for decades, wrecked her peace of mind, and sent her beloved gay brother Bichi into a self-chosen Mexican exile.

Restrepo tells this chronicle of a craziness foretold through deftly intersecting monologues. She shifts between three unhappily privileged generations of Londoños, the baffled devotion of Aguilar to his unfathomable wife, and the outsider's view provided by Midas McAlister. Agustina's ex-lover, Midas is a poor, smart boy made bad who, thanks to a middle-management role in the Escobar empire, can seek his revenge for humiliation at the hands of a governing class that even inherits "christening gowns starched by Carmelite nuns".

For all the violence and hypocrisy of its hinterland, Delirium feels cheeringly awash with love: the love that Agustina gives, and inspires; the underground alliances that bind family members against the official myths that imprison them; and the everyday passions and affections that let the ordinary people of Bogotá find a way through the collective madness around them. And the author, if not the Christ of Monserrate, does seem to hear their prayers. Delirium – its fast-flowing, freestyle narration impeccably caught by Natasha Wimmer's translation – swerves and rushes through showdown and exposure into something remarkably like a happy ending.

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