States (OAS) was sent to Peru to intercede in this crisis, proposing a set of institutional reforms to be
discussed by the government, the political opposition and civil society.
How crises are resolved at one point in time shape the subsequent political arena. Peru overcame a period
of profound economic crisis and terrorist violence, but it did so largely by restricting the rule of law and
weakening democratic institutions.  Peru must now confront the legacy and consequences of the way in
which it achieved those initial successes. The democratic transition of the 1980s was undermined by
economic mismanagement, over concentrated Executive authority, inadequate civilian control over the
military, and a severe insurgent uprising.  In the light of the current political crisis, many Peruvians
would agree that it is time to start again the task that went awry in 1980: the consolidation of a
democratic regime, and the creation of a competitive political system that better represents the great
diversity of Peru's citizens, cultures, and regions.
Assessment Objectives
There are underlying socioeconomic and cultural problems that continue to work against the
consolidation of democracy in Peru. These include persistent poverty and inequality, as well as racism,
sexism, and other forms of social discrimination. A number of these problems are being addressed
directly by USAID in Peru through other Mission programs.
The challenge for the Democracy and Governance program is to identify and address the most important
 obstacles to democracy in the short to medium term, while bearing in mind the need for longer 
term social change and seeking the political means with which to encourage it. The purpose of this
assessment was to assist USAID in this process. As a follow on to a recent evaluation of current USAID
democracy education activities in Peru, this assessment had three stated objectives: (1) to provide a
background analysis of the Democracy and Governance situation in Peru, in order to help the Mission
develop a new strategy for promoting democracy in this country over the next five years; (2) to
recommend changes that are needed in order to more effectively strengthen Peruvian democracy during
that time period; and (3) to provide some tentative recommendations for how these changes could be
achieved with the assistance of USAID programming.
The assessment was conducted by a team of five experts using a framework tool developed by USAID's
Democracy Center. This framework involves four steps. The first, presented in Chapter III of this report,
is a broad analysis of the Democracy and Governance problems that need to be addressed, using five
main variables: consensus, rule of law, competition, inclusion and good governance. This section of the
assessment locates Peru on a continuum of democratic development and reviews the main problems to be
addressed in the years ahead.
The next two steps, presented together in Chapter IV, examine how  the game of politics  is played in
Peru, identifying the main arenas of action and the principal actors and interests involved.  Although this
section ultimately leads to a narrowing down of the possible institutional arenas in which interventions
might have the greatest impact, its richness of detail provides Mission staff with information that might
be useful in considering alternative paths if country conditions change in the years ahead.  The final step,
summarized in Chapter V, develops recommendations for a new Democracy and Governance Strategy in
Peru. This includes suggestions for an 
optimal strategy
, without regard to external or internal constraints,
and then a brief discussion of the various filters through which this optimal strategy must pass. The
chapter concludes with tentative recommendations for a 
practical strategy
 for the Mission in the next
five years.
H:\INCOMING\July24\MSI Submission\Fn Email.doc

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