have come to control almost 80% of the budget: the Ministry of the Presidency (MIPRE) and the
Ministry of Economics and Finances (MEF). These institutions now reach directly into the municipal
districts. Further, officials of all ministries and agencies of the central government in the provinces are
paid by the Ministry of the Presidency. As such, the financial authority over the rest of the ministries are
largely limited to Metropolitan Lima. Together with the concentration of power in a few areas of the
Executive branch, there has been a sharp rise in social spending throughout the country. In 1990, the year
Fujimori came to power, 17% of total expenditures went to social programs. By 1998, this had climbed
to 40%.
The problem repeatedly cited at the local level is that the Executive agencies are operating in the
municipalities, yet elected authorities and the citizenry have little or no say in programs, public works or
investments that affect their lives and their communities. Power is concentrated in a distant capital within
powerful central bureaucracies.  Foncodes, as an agency within the Ministry of the Presidency that is a
major actor at the local level, has a budget which is two thirds that of the Municipal Compensation Fund.
Although communities and local governments have participated actively in the identification of local
projects for funding and their prioritization by Foncodes, charges of political bias and lack of
transparency in that agency have increased in recent years.
As the MIPRE and other central government institutions expanded their role in financing local projects,
the role of local officials was transformed. The challenge became how to develop relations with the
Executive branch and persuade Executive officials to invest in their areas and provide services. The
relationship became either partisan or clientelistic, with the Executive playing the role of patron and the
municipalities as client. Oppositional politics became fruitless. Governing party officials had a built in
advantage; opposition party officials were forced to adapt to the circumstances or perish at the polls for
not delivering the goods.
Democracy at the Local Level
Despite the overwhelming presence of Executive authority at the local level, one of the unexpected
consequences of the new relationship among levels of government is that local governments, to a
surprising degree, have become a space of  concertacion  or reunions and consensus building between
local officials, NGOs and citizens in search of coalitions to lobby for state investment in local
development. Since the central government controls 94% of the resources, local politics has been
converted into a search for access to resources.
Democracy at the local level is as diverse as Peru itself. In rural Peru,  communities  predominate  
human settlements with common ethnic, linguistic, historical, ancestral, religious or cultural ties. The
1993 Agrarian census found 5,168 communities, though there are likely more (Diez, 1999, p. 20) For
many, these continue to be the prime referent for political and social organization, particularly in parts of
the sierra such as Cuzco and Ayacucho. In other parts of the country, the community has given way more
to the District.
In a given community, one might find a great variety of organizations, such as mothers' clubs,
committees for specific services (potable water, electricity, and sports clubs). Such organizations have
been found throughout the sierra. On the coast, there are more producers' associations within the
structure of local power. In the north, and in the areas of violent conflict during the 1980s, self defense
organizations, or what have become known as 
rondas campesinas
, have emerged as key forces within
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