The ultra-violent action in this weird and wonderful thriller centres on Felipe Félix, a Buenos Aires hacker who, 10 years after he returns from the Falklands with shrapnel in his brain, gets caught up in corporate skulduggery when a construction tycoon hires him to track down witnesses to a murder committed by his wayward heir. Félix's task involves, among other bizarre operations, the cocaine-fed development of a virus-laden video game recasting Galtieri's invasion as a triumph.

First published in Spanish in 1998, it's rife with surreal horror and rampant bad taste, coming across as something like a William Gibson novel narrated with the vitriol of Céline's wartime classic Journey to the End of the Night. You sense clearly that it's meant as a caustic satire on nationalism, even if the precise target of some of the more outlandish passages isn't always easy to make out. As Félix at last confronts the ghosts of the 1982 conflict, it's his remarkable voice  angry, wounded, often hilarious  that keeps you rapt. Ian Barnett's English text (a collaboration with the Argentinian author) looks like a feat of translation, in which the labyrinthine sentences writhe with inventive similes.

Felipe Félix is a professional hacker in Buenos Aires. One day he receives a call from a Doctor Tamerlán, who wants Félix to track down the witnesses to his son's murder of an apparently unknown victim. Félix is also a veteran of the 1982 Malvinas/Falklands war; he has been left with a piece of shrapnel inside his head, and a decade on still regularly meets up with other former combatants. One of these is Colonel Verraco, now a senior officer in Argentina's intelligence services (SIDE).

As Carlos Gamerro observes, with biting sarcasm, the paranoia typical of intelligence services throughout the world has been taken to its logical extreme in 1990s Argentina: "That's why the SIDE only investigates itself now. The idea being that you can only solve the crimes you commit yourself. It simplifies everything. They've even decided to start with the solution and plan the crime backwards."

Most of the people in the SIDE basement are working on plans to retake the Falkland islands. Félix knows that if he can hack into their computer system, he will be able to track down all the witnesses he needs to find. All he has to do is keep Verraco happy with a video game in which the invaders reverse the real outcome and emerge victorious over the British in the 1982 conflict, while he meanwhile looks up the records they keep on every Argentinian citizen. Félix delves into many nightmarish worlds before he stumbles across the existence of Major X, a torturer of his own countrymen in the "dirty war" of the military dictatorship before he took part in the "clean war" against the islanders.

During the invasion, the major had kept a diary, written in the style of a Columbus arriving on the shores of South America: "Until our arrival, [the natives] thought they were the only men on earth!" He also learnt about the natives' legends, such as all their gold and wealth coming from a distant, mythical "ingot-land". (Here as elsewhere, Ian Barnett's translation deals admirably with all the swoops of the author's imagination).

Like many Argentinian films, The Islands has something of the kitchen-sink tendency about it, as it lurches from dystopian nightmares to diary accounts, from the gripping realism of fog-drenched battle to the reverse fairytale with which the book ends. In general, though, Gamerro's powers of invention draw readers on, anxious to know where we will be taken next.

The novel is perhaps closest in spirit to Joseph Heller's Catch-22. Not only do characters have similar punning names, but as in Heller's novel, one man is discovered sitting "surrounded by passersby, who were watching him die, his open briefcase spewing papers around him, on which lay the uncoiled intestines that spilled from his open belly". In Heller's novel, the discovery of the gunner with a similarly horrifying wound is the moment when the utter madness of war overwhelms Yossarian. In Gamerro's impressive book, the illusion of "the islands" serves as a blind spot in the Argentinian imagination that blots out the ghastly reality that persists around them.

 Nick Caistor's Octavio Paz is published by Reaktion Books.

In La aventura de los bustos de Eva Perón, his 2004 novel about a corporate executive caught up in an insurgent cell in 1970s Buenos Aires, Carlos Gamerro creates two emblematic set pieces. The first is an Evita-themed brothel in which the prostitutes dress as that woman, covering the different stages of her life, from the country girl, through the struggling actress, the steely politician, to the embalmed corpse. The clients, we discover, are not Perón's supporters, but masochistic oligarchs, getting off on humiliations at the hands of their most hated political opponent.

The second is a vast 1940s suburban development, made up of model units for Peronist workers, designed with a curving street pattern at odds with the grid found in the rest of Buenos Aires. Today, with satellite maps, the explanation for such excess might be plain, but at the time only putting an Argentine into orbit would have revealed Ciudad Evita's full, grandiloquent intention: the town is shaped to her profile, like a giant stamp, with her sharp nose and exaggerated chignon. Like the trails of super tankers, the Standard Bearer of the Poor must be visible from outer space.

Gamerro, like Borges and Julio Cortázar, likes to test his reader's credulity, with scenes of jaw-dropping megalomania and philosophical Heath-Robinsonism. There is a difference though: when Borges describes the upper reaches of solipsism or when Cortázar stretches normality to breaking point, we realise all too late that the wool has been pulled over our eyes. Gamerro instead picks history's what-the-fuck moments, which when found in fiction are so strange as to knock the reader momentarily out of the imaginary world.

It is, though, the logic behind the madness that attracts Gamerro. One of the two set pieces in La aventura is true, the other an invention. A lot of people guess wrong. It's not surprising. The back-story to The Islands, in which a billionaire businessman is kidnapped by a far left group, yet befriends and eventually hires one of his captors, really happened. The silent complicity and disingenuous obfuscations portrayed in An Open Secret happened too.

Gamerro's novels link together three moments from Argentina's recent history: armed insurgency, state terrorism, and the Malvinas war. The Islands stages an investigation of the past in the present. But, as in the best detective fiction, what is actually being investigated keeps slipping out of view. It is 1992, and Felipe Félix, a computer hacker and Malvinas veteran, is called to the offices of one Fausto Tamerlán. In these vertiginous twin shards of glass overlooking the new city of the future in South Buenos Aires, Felipe is part-bribed part-threatened into seeking out the witnesses to a crime that threatens the whole of the Tamerlán empire: Fausto's cross-dressing son, César, has hurled some rough trade from the top of the tower to a messy death below. Unfortunately, he did so in full view of 25 witnesses across the chasm, and Felipe is hired to find them so they can be  he kids himself  bought off.

Tamerlán's story unites the wildest excesses of 1990s capitalism (he keeps a gold-nugget filled turd in a Perspex case on his desk), the deals between business leaders and paramilitaries in the 1970s, and the flight of Nazi criminals to the far south. But his is not the only past under the loupe. Felipe has to call on his Malvinas comrades to conduct his search. These include the loathsome Verraco, his former commanding officer, obsessed with winning the war he lost, especially, as in the videogame Felipe designs for him, if it entails no risk to his own skin. He allows Felipe access to Secret Service files with the names of the witnesses, but these have been changed by another hacker, into a parade of 1980s fetishes on both sides of the conflict: Diego Maradona, Margaret Thatcher, Leopoldo Fortunato Galtieri, and others.

Partly, this list is a silly joke. In the Spanish original the list was different and, I thought, funnier, including Mr Ed and Dr Spock, but quite likely impenetrable even to readers with search engines. Perhaps it's also what Gamerro is doing throughout the novel: creating laugh-out-loud vignettes, drawing on great literary provocateurs like Burroughs and Burgess, behind which one finds the whole cultural constellation of a historical moment. Images of a Britain crippled by strikes, paralysed by hooligans, and humiliated by a hysterical Prime Minister, spread by a military that prided itself on having already won one war, against "subversion", not to mention a World Cup, informed a popular imaginary that could foresee nothing but victory in the conflict against decadent colonialism  hence the terrible shock for combatants and public alike when the announcement came of surrender. The section including Major X's diary, a parody of Darwin's notebooks via "Dr Brodie's Report", in which the kelpers are portrayed as troglodyte counterparts to the noble savages of Patagonia, provides a giggling insight into the decorative heads of the ideologues of war.

As he treads the streets pursuing his leads, it is the personal and historical legacy of the war that Felipe finds himself forced to revisit. It becomes clear that the mystery of César's crime, the whereabouts of his elder brother  Fausto Jr., former heir apparent, ex-guerrillero, now missing presumed dead  and the fate of Tamerlán Sr. are linking devices to trace an obsession that could be summed up in one simple question: why do we want to go back? This and other returns  of exiles under Rosas, of the Gaucho Martín Fierro, of Evita ("to be millions"), of Perón  is one of the clichés Gamerro wants to cut up and examine. The question of return ties Felipe to his enemies, like the tragicomic veteran Hugo who celebrates every year the loss of his legs as others would a birthday, and the phantasmal Arturo Cuervo, aka Major X, one-time military torturer, now leader of the secret plot to retake the Malvinas by force.

Gamerro is not a historical novelist, recreating the past through incidental characters witnessing history. Nor is he close to Mantel, writing the inner lives of Great Men. It's hard even to see him in the line of what Perry Anderson called the Latin American meta-historical novel (LRB 28 July 2011). No, there's too much Thomas Pynchon here for that. But where Gamerro differs from, for sake of comparison, Martin Amis, in taking on a big historical subject, is that despite the buffoonery and toilet humour, there is an archive of research to support the argument. Before one can properly send up the idiocy of the past, one has to understand it.

Two allegories bookend The Islands: the first is Felipe's story of the fly caught in the web, enjoying the comfort of its final rest, who only feels the bonds when she tries to wriggle free. This is a fable about ideology, of course. We assume Felipe is the fly  he is trapped in the lethargy of his bed-sheets as the thought occurs to him  but in the paranoid panopticon of Tamerlán's business empire, the allegory shifts, like the multi-way mirrors in the CEO's pillar of sight that allow the boss total observation but at the risk of petrifying visibility.

The second is a fairy story in reverse, told by Felipe's lover, Gloria, a victim of Major X, and mother of twin girls named Malvina and Soledad. Gloria is a voice of pain and hope in the novel, and her yarn, of the princess who turns into a frog, but who comes to love her amphibian king, sends a superficially optimistic message for a future after war. But read alongside the tale of the fly, it offers a rather more unsettling moral, about our ability to become accustomed to the monstrous. One of the most vocal Argentine critics of the war, the philosopher León Rozitchner, wrote of the irony of a campaign to impose Argentine sovereignty on the Islands that coincided with the announcement of the sell-off of state enterprises, businesses, and services. The campaign for a patria in the islands was a disguise for dismantling the nation at home.

An Open Secret is set a few years later than The Islands, and the case that it investigates occurs earlier, in the mid 1970s. In essays, Gamerro has toured the limitations of the Argentine detective novel. Not for nothing did Borges rewrite Buenos Aires with Parisian names for his most famous police tale, "Death and the Compass" for, as Gamerro observes, if someone is mysteriously killed in Argentina and there is no obvious culprit, everyone, yes everyone, knows that the pigs did it. In Para una reformulación del género policial argentino, Gamerro suggests that the police in Argentina offer a simple choice: either organised crime or disorganised crime. This explains the relative impunity with which those who in towns without military garrisons were the de facto repressive forces of the dictatorship have been treated in the democratic era. A country can function without an army; it can't, elected politicians reckoned, do so without police. Films such as El bonaerense or even Nueve reinas have captured the more or less shared ventures of cops and robbers, and cases such as the disappearance in 2006 of Jorge Julio López, before he was due to testify against policemen accused of crimes against humanity, reveal the cost of this fix.

An Open Secret follows an investigation and again it is one that changes object as the novel develops. But in tone, form, size, indeed in almost everything, it is a different work to The Islands, a big, rambling book like other recent doorstops by Alan Pauls or Roberto Bolaño. Gamerro's later work is trim and trimmed down. One could talk about maturity  The Islands is an ambitious opera prima, An Open Secret a later, calmer work  but they work differently with scale. The set pieces in The Islands are as overwhelming as Tamerlán's towers, and point to an even bigger reality. An Open Secret follows one man investigating one death in one small town. If The Islands hinted at the day-to-day complicity we are all capable of, here Gamerro meets, talks to, takes tea (or rather mate) with, and gets gifted a little woolly cardigan for his child, by those who stood aside, watched, and then explained away murder.

Parochial crimes have an honourable history in Latin American fiction, but whereas Chronicle of a Death Foretold suggested that even the idealistic journalist would struggle to understand the origins of murder, An Open Secret digs away at the shallow graves of recent decades to find the pettiness, narrow-minds, and rivalries that motivated it. Sociologists in Argentina have argued that one of the ways in which state terrorism worked  beyond simply terror, of course  was to make the crime fit the punishment. If someone can be taken away in the middle of the night, never to be seen again, well, they must have been up to something.

Like Manuel Puig, Gamerro records the voices of ordinary in a provincial backwater. Whereas in later years Puig would tape his subjects, reusing their speech verbatim, but reordering to suit his story, Gamerro instead worked from his interviews to capture the rhythms of circumlocution and prevarication. Fefe, the narrator, wants to know about the death of a journalist, Darío Ezcurra, at the hands of the local police chief, in a little town in Santa Fe province, Malihuel, in the early days of the dictatorship. Chief Neri, we discover, went house to house, not in search of his victim, but to test the waters amongst the townsfolk. The title in Spanish, El secreto y las voces, puns on the phrase that means "an open secret," and the voices we hear at once hide and reveal. As in The Usual Suspects, there is a moment when the reader will realise that everything that's been told is at best a half-truth, and most likely a lie. Ezcurra brought it upon himself. He messed with the wrong people. The town got off lightly. Only 1 death in 3,000, you compare that to the rest of the country, eh? I didn't approve, I tried to stop it, and I warned him. Anonymously, of course.

In one sequence Fefe listens, with rising horror and quiet indignation, to his beloved Aunties Porota and Chesi (Fefe's grandmother is called Clota, to complete the trio). They tell the story of Ezcurra's death and the town's reaction to his mother's search for truth. Outside Argentina we are familiar with the story of Argentina's Mothers of the Plaza de Mayo, marching weekly to find their disappeared relatives. Fefe's ageing aunts retell this as cruel farce, turning the grieving mother, through a sickly mixture of pleasant gossip and innocent insinuation, into the builder of her own gallows. Here Barnett really comes into his own, for amongst the many things that one could say about these translations the simplest would be to say that if you didn't know they were translations you wouldn't guess, and when you do know you can't imagine how he's done it. Perhaps what turns Fefe's stomach is how familiar, how very natural, all this murderous chatter is.

Revelations close An Open Secret, and both Fefe and the town are forced to face a half-buried past. The sociologist Guillermo O'Donnell explored the double discourses of those many citizens who were able to explain away the actions of the dictatorship but in the light of its terrible crimes could deny their earlier words of support. It is just such duplicity that Gamerro's protagonist reveals, and it disgusts him. Yet the novel ends on an upbeat note, as Fefe explains his plan to contact the group HIJOS, activists who recuperate the memory of the children of the disappeared, and press for criminal prosecutions against the military, police, lawyers, doctors, nurses and others who profited from the forced adoption of children in the 1970s. First published in 2002, the novel could not have known how important such trials would become to Argentina's politics over that decade, just as The Islands could only have guessed at the recurring significance of that centuries old dispute and a war now thirty years past.

Ben Bollig is author of Modern Argentine Poetry, out now from University of Wales Press