Dargent Et Al. - 2017 - Resource Booms and Institutional Pathways PDF

RESOURCE BOOMS
AND INSTITUTIONAL
PATHWAYS
The Case of the Extractive Industry in Peru
EDITED BY
EDUARDO DARGENT
JOSÉ CARLOS ORIHUELA
MARITZA PAREDES
MARÍA EUGENIA ULFE
Latin American Political Econom

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Pontificia Universidad Católica de Chile
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Pontificia Universidad Católica de Chile
Macul, Chile
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Eduardo Dargent · José Carlos Orihuela
Maritza Paredes · María Eugenia Ulfe
Editors
Resource Booms
and Institutional
Pathways
The Case of the Extractive Industry in Peru
Editors
Eduardo Dargent Maritza Paredes
Pontificia Universidad Pontificia Universidad
Católica del Perú Católica del Perú
Lima, Peru Lima, Peru
José Carlos Orihuela María Eugenia Ulfe

Pontificia Universidad Pontificia Universidad
Católica del Perú Católica del Perú
Lima, Peru Lima, Peru
Latin American Political Economy

ISBN 978-3-319-53531-9 ISBN 978-3-319-53532-6 (eBook)
DOI 10.1007/978-3-319-53532-6
Library of Congress Control Number: 2017936036
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This book is part of the interdisciplinary research project “Global
Agendas, Local Translations: State Capacities in the Extractive Boom”
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Pontificia Universidad Católica del Perú”.
Translation and proofreading: Evelyn Frances Brickfield McCoy and

Rosemary Underhay.
Contents
1 Cycle of Abundance and Institutional Pathways 1

Eduardo Dargent, José Carlos Orihuela,
Maritza Paredes and María Eugenia Ulfe
2 Deeply Rooted Grievance, Varying Meaning:

The Institution of the Mining Canon 41
Stephan Gruber and José Carlos Orihuela
3 Extracting to Educate? The Commodities Boom, State

Construction, and State Universities 69
Eduardo Dargent Bocanegra and Noelia Chávez Ángeles
4 Fragmented Layering: Building a Green State

for Mining in Peru 97
José Carlos Orihuela and Maritza Paredes
5 The Social Construction of a Public Problem:

The Role of the Ombudsman in Building Institutions
for Extractive Conflict 119
Maritza Paredes and Lorena de la Puente
vii
viii Contents
6 Ethnicity Claims and Prior Consultation in the

Peruvian Andes 153
Ximena Málaga Sabogal and María Eugenia Ulfe
7 Conclusions 175
Eduardo Dargent, José Carlos Orihuela, Maritza Paredes
and María Eugenia Ulfe
Annexes 187
Bibliography 193
Index 203
Editors and Contributors
About the Editors

Eduardo Dargent is an associate professor of political science at
Pontificia Universidad Católica del Perú. His main teaching and research
interests are comparative public policy, political economy, and the state
in the developing world. He has published in Comparative Politics,
the Journal of Latin American Studies, the Journal of Democracy. His
book Technocracy and Democracy in Latin America (New York: CUP)
was published in 2015. He received a PhD in Political Science from
University of Texas, Austin.
José Carlos Orihuela is an associate professor of economics at Pontifical
Catholic University of Peru. He is an institutional economist who stud-
ies how institutions evolve, the forging of environmental governance,
and the political economy of natural resources. His research has been
published in Studies in Comparative International Development, World
Development and the Journal of Latin American Studies, among other
outlets. Two of his articles were awarded by the Economics and Politics
Section of LASA. He co-authored The Developmental Challenges of
Mining and Oil: Lessons from Africa and Latin America (Palgrave 2012)
and has contributed to various edited volumes.
Maritza Paredes is an associate professor of sociology at Pontificia
Universidad Católica del Perú. Her book publications include,
La Representación Política Indígena en el Perú (IEP 2015), the
ix
x Editors and Contributors
co-authored The Developmental Challenges of Mining and Oil: Lessons

from Africa and Latin America (Palgrave 2012), and Ethnicity and the
Persistence of Inequality: The Case of Peru (Palgrave 2011). His research
has been published in World Development, Oxford Development Studies,
The Extractive Industries and Society. She received a Ph.D. from the
University of Oxford and has been Cogut Visiting Professor at Brown
University and Custer Research Fellow at the Rockefeller Center for
Latin American Studies at Harvard University.
María Eugenia Ulfe is a Peruvian Anthropologist, Ph.D. in Human
Sciences/Anthropology at the George Washington University
(Washington DC, 2005) and MA in the Arts of the Americas, Oceania,
and Africa at the University of East Anglia (United Kingdom, 1995).
Associate Professor at the Department of Social Sciences and Director
of the Master Program in Anthropology and the Master Program in
Visual Anthropology at the Pontificia Universidad Católica del Perú.
Her work focuses on memory, creative culture, violence, and visual
Anthropology. Among her recent publications there are Cajones de
la memoria: la historia reciente del Perú en los retablos andinos (Lima,
PUCP, 2011) and ¿Y después de la violencia que queda? Víctimas, ciu-
dadanos y reparaciones en el contexto post-CVR en el Perú (CLACSO,
Buenos Aires, 2013).
Contributors
Noelia Chávez Ángeles Pontificia Universidad Católica del Perú, Lima,

Peru
Eduardo Dargent Bocanegra Pontificia Universidad Católica del Perú,
Lima, Peru
Eduardo Dargent Pontificia Universidad Católica del Perú, Lima, Peru
Stephan Gruber Pontificia Universidad Católica del Perú, Lima, Peru
Ximena Málaga Sabogal Department of Anthropology, New York
University, New York, USA
Editors and Contributors xi
José Carlos Orihuela Pontificia Universidad Católica del Perú, Lima,

Peru
Maritza Paredes Pontificia Universidad Católica del Perú, Lima, Peru
Lorena de la Puente Pontificia Universidad Católica del Perú, Lima,
Peru
María Eugenia Ulfe Departamento de Ciencias Sociales, Pontificia
Universidad Católica del Perú, Lima, Peru
List of Figures
1 Cycle of Abundance and Institutional Pathways

Fig. 1 History of mineral exports in Peru (1890–2010) 2
Fig. 2 FOB exports of mining producers, Peru.
(FOB values in millions of US$) 5
Fig. 3 Taxes collected by the National Tax Agency (SUNAT)
in mining and hydrocarbons (millions of Nuevos Soles) 6
Fig. 4 Canon budget by government (includes SobreCanon,
Royalties, and Participation) (in Thousand Millions
of Nuevos Soles) 7
Fig. 5 Increase of socio-environmental conflicts in Peru
(2004–2012) (in number of conflicts) 8
3 Extracting to Educate? The Commodities Boom,

State Construction, and State Universities
Fig. 1 Canon resources transferred to state universities, 2004–2013
(in millions of Peruvian Nuevos Soles) 75
4 Fragmented Layering: Building a Green State

for Mining in Peru
Fig. 1 Environmental fines to mining companies: The OSINERGMIN
(2007–2008) and OEFA (2009–2015) layers
(current US$ millions) 106
xiii
xiv List of Figures
5 The Social Construction of a Public Problem:

The Role of the Ombudsman in Building Institutions
for Extractive Conflict
Fig. 1 Civil unrest and dialogue processes (2008–2013).
Own formulation 128
Fig. 2 National office of dialogue and sustainability and previous
attempts 138
List of Tables
1 Cycle of Abundance and Institutional Pathways

Table 1 Type of institutional regimes and cases 3
Table 2 Different types of canon 10
Table 3 Shaping the arena for institution building 17
3 Extracting to Educate? The Commodities Boom,

State Construction, and State Universities
Table 1 Canon resources transferred to state
universities, 2004–2013 75
Table 2 Use of resources from canon transfers 2004–2012 77
Table 3 Ten universities with greater resource allocation
of canon resources 2004–2012 78
Table 4 Executed canon in 2011 in investment projects
and research in state universities by CRI 79
Annexes
Table A1.1 The Canon legislation 1969–2002 187
Table A1.2 Variation in Canon distribution indexes 2001–2004 189
Table A2.1 Oil Canon (in thousands US Dollars) 190
Table A2.2 Mining Canon (in thousands of Peruvian
Nuevos Soles) 191
Table A3.1 Norms and international guides for enterprise-community
relationships 192
xv
CHAPTER 1
Cycle of Abundance and Institutional

Pathways

From 2004 onward, Peru has experienced its most recent economic
growth cycle based on a natural resources boom and, in particular, on
minerals. With a new cycle of growth came a wave of conflict and social
unrest that once again put “the paradox of plenty” into the debate (Karl
1997). The effects of natural resource abundance cycles on relationships
between state and society have been largely debated in the social sci-
ences.1 From different disciplines, there is a vast literature that reveals
the challenges of societies in constructing institutions for development
during resource booms driven by a surge in commodity prices. Existing
E. Dargent (*) · J.C. Orihuela · M. Paredes · M.E. Ulfe 

Pontificia Universidad Católica del Peru, Lima, Peru
e-mail: edargent@pucp.edu.pe
J.C. Orihuela
e-mail: orihuela.jc@pucp.pe
M. Paredes
e-mail: maritza.paredes@pucp.pe
M.E. Ulfe
e-mail: mulfe@pucp.edu.pe
© The Author(s) 2017 1

E. Dargent et al. (eds.), Resource Booms and Institutional Pathways,
Latin American Political Economy, DOI 10.1007/978-3-319-53532-6_1
2 E. Dargent et al.
literature has been particularly eloquent about the challenges of growth

based on non-renewable natural resources, such as minerals and hydro-
carbons. Economic studies have argued that growth is “impoverish-
ing,” if not invested in new capital while sociology, political science, and
anthropological studies have claimed that growth comes hand in hand
with authoritarianism, corruption, and environmental and redistributive
conflicts.2 In this way, the recent rise in the international prices of these
commodities revives the debate over institutional challenges that the new
resource boom has originated in Latin American countries and beyond.3
This book explains the unexpected institutional development that Peru
has undergone in recent years to manage the benefits and cost of rapid
extractive industry expansion due to a commodity boom.
Peru is an emblematic case of the so-called natural resource curse. From
the early studies of Auty (1993) and Mahon (1992) that developed the
idea of the resource curse in Latin American developing countries, to stud-
ies focused on the effects of recent commodity booms (Arellano-Yanguas
2008, 2011a, b; Bebbington et al. 2008), literature has studied the
effects of these growth cycles, regarding both the initial formation of the
Peruvian state (Paredes 2013) and its subsequent development (Paredes
2016; Orihuela 2014; Arce 2006; Bebbington 2013). Today, Peru is once
again a relevant case for the study of resource abundance growth. It has
been one of the countries with highest average growth in the region (over
80
70
60
50
40
30
20
10
0
80 900 905 910 915 920 925 930 935 940 945 950 955 960 965 970 975 980 985 990 995 000 005
18 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2
Fig. 1 History of mineral exports in Peru (1890–2010). Source Elaboration of

Orihuela (2014) based on Thorp and Bertram (1978) and Central Bank of Peru
data
1 CYCLE OF ABUNDANCE AND INSTITUTIONAL PATHWAYS 3
Table 1 Type of institutional regimes and cases
Institutional regimes
Benefits management Costs management
Canon Environmental regulation

Canon for research in state universities Conflict management
Local consultations Local consultations
6% annually), based on the exportation of minerals (gold and copper) and

hydrocarbons (mainly gas). However, as Fig. 1 shows, this cycle has not
been the only one. Mineral exports have constituted more than 50% of
total exports during various moments in Peruvian history. Thus, without
tracing back to the nineteenth-century guano era, the study of institutional
transformation in Peru concerning this type of growth cannot ignore the
legacies of previous cycles. The recent economic cycle and opportunities
for state expansion are strongly permeated by previous cycles’ legacies.
This book understands institutional development as the evolution of
institutional regimes. The latter is broadly defined as the system of for-
mal and informal rules of the game and the institutional organizations
that enforce and give support to such rules. Thus, by “institution,” we
can be referring to either a rule of the game or an organization-shaping
political-economic agency (Meyer and Rowan 1991).
The book addresses what we see as the most important state institu-
tional developments associated with the governance of extractive industries.
We group institutional change in two broad types: benefits-management
and costs-management institutional development. Some institutions
have emerged to manage the (distribution of the) benefits of resource
extraction, beginning with the canon redistributive scheme (Chap. 2)
and the earmarking of a percentage of the canon to finance state uni-
versities’ investment in research (Chap. 3). In contrast, other institutions
have emerged fundamentally to manage the (distribution of the) costs of
resource development, such as formal rules of the game and state organi-
zations for environmental regulation (Chap. 4), conflict management
(Chap. 5), and formal and informal rules of participation and local con-
sultation (Chap. 6)—thus, participation can also shape the management
4 E. Dargent et al.
of benefits, by creating institutions to decide over the canon and non-

canon mining transfers (Table 1).
The chapters in this book dialogue with literature about the natu-
ral resource curse and with other perspectives that help to explain the
paradox of institutional development in the resource abundance con-
text. Overall, the book posses the questions of what has happened with
institutional state construction during the recent commodity boom in
Peru (2004–2012); how more regulatory and mediation institutions
developed in these years in spite of adverse conditions and powerful veto
actors; and why some institutional developments occurred rapidly at the
cycle’s beginning while others took their time, emerging only toward the
end. Why were some processes more contested than others? What type of
actors has mobilized the activation and implementation of these different
institutions? And, what are the challenges left by the commodity boom?
The theoretical framework developed in the fourth section of this
introduction aims to answer these questions. As discussed in detail
below, we propose that three dimensions explain the institutional devel-
opment in resource-abundant Peru: (a) preceding power distribution
of state and society actors, (b) historical repertoires of state and society
action, and (c) the entrepreneurship of actors embedded in transnational
networks. Our framework aims to provide a comparative road map for
similar analysis in Latin American countries affected by the recent com-
modity boom.
This introductory chapter is organized into five sections. The first
one explains the new cycle of economic development based on natural
resources and the main conflicts/tensions that it has produced. The sec-
ond section describes significant institutional state changes in Peru, which
today have a relevant spot in the political scene that they did not have
in the 1990s, thanks to the abundance cycle. The third section discusses
literature that explain the relevance of resource abundance cycles for insti-
tutional state development. The fourth section, the main one of this chap-
ter, presents the arguments developed in conjunction with our findings.
The final section describes the book’s methodology and organization.
1 Economic Abundance and Social Unrest

The increase in international prices of minerals, especially copper and
gold, brought alongside a vertiginous increase of mineral exports, as
shown in Fig. 2. Private investment in mining increased almost sixfold
30
25
20
15
10
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Fig. 2 FOB exports of mining producers, Peru. (FOB values in millions of
US$). Source Self-elaboration, based on Central Reserve Bank of Peru data
between 2006 and 2015, taking over a quarter of foreign capital invest-
ment in this sector.4 The growth of mining investment also partly
responds to the policy adopted by the Peruvian state that helped the
country take advantage of the resource boom cycle. Since the 1990s,
Fujimori’s government reduced state participation in the mining sector
and promoted private investment through fiscal incentives and the sim-
plification of providing concessions (Arellano-Yanguas 2011a, p. 21). As
a consequence of these changes on the international and national level,
mining has represented on average in the last 20 years 10% of GDP,
reaching 15% in 2006. Peru, along with Chile and Bolivia, has become
one of the countries where extractive industries represent the largest
percentage of GDP in Latin America. The boom thus nourished already
powerful private stakeholders and increased their presence in the terri-
tory.
Along with macroeconomic growth, the Peruvian state received
greater earnings on all levels: national, regional, and local.5 Figure 3
shows the growth of public budgets mainly as a result of income tax that
extractive enterprises pay. This sum is also the base of subnational trans-
fers: the canon. Regarding mining, income tax represents the bulk of tax
earnings for this activity, which also pays mining royalties and conces-
sion rights.6 During Alan Garcia’s government (2006–2011), the Mining
6 E. Dargent et al.
16
14
12
10
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fig. 3 Taxes collected by the National Tax Agency (SUNAT) in mining and
hydrocarbons (millions of Nuevos Soles). Source Self-elaboration, based on
SUNAT data
Voluntary Contribution was introduced in early 2007 and lasted until the
change of government in 2011.7 With this contribution, enterprises com-
mitted to allocating 2% of their net annual utilities to the “Local Mining
Fund” and 1% to the “Regional Mining Fund.” During Humala’s gov-
ernment (2011-2016), the Special Tax on Mining (Law 29789) was
created and applied to utilities with a tax rate of between 2% and 8% to
enterprises that did not have a stable contract. For enterprises with a sta-
ble contract, a special levy was established (Law 29790), which mani-
fested itself into a new tax burden contracted by a voluntary agreement
between the state and enterprises with a new rate of between 4% and
13% of utilities. Finally, during the government of Humala, the Mining
Royalty Law was amended to increase rates to between 1% and 12% of
utilities (Sanborn and Dammert 2013, pp. 24–30).
Despite tax cuts and incentives for the extractive sector, the quantity
of income collected by the La Superintendencia Nacional de Aduanas y
de Administración Tributaria (SUNAT) in this sector went from 27,362
million Peruvian Nuevos Soles in 2004 to 15,152.7 million in 2011,
approximately seven times more.
Figure 4 shows state rents also grew on subnational levels due to canon
transfers. This growth, however, has created great territorial disparities.
Given that canon beneficiaries were exclusively producers subnational areas
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
National Government Regional Government
Fig. 4 Canon budget by government (includes SobreCanon, Royalties, and

Participation) (in Thousand Millions of Nuevos Soles). Source Self-elaboration,
based on Ministry of Economy and Finance of Peru data
at different levels (regions, provinces and districts), the canon contributed

to increasing inequality of earnings between subnational áreas producing
minerals and hydrocarbons and those not producing them. Thus, while in
regions such as San Martin, Lambayeque, and Amazonas, subnational gov-
ernments received on average earnings of less than one Peruvian Nuevo
Sol per inhabitant. In regions, such as Cuzco and Moquegua, subnational
governments received more than S/.1, 400 per inhabitant in 2013. This
situation was repeated on the other subnational levels (provinces and dis-
trics), generating a large disparity of income between producing and non-
producing subnational governments and causing small groups of regions
(Ancash, Cajamarca, Tacna, Moquegua, and Arequipa) to concentrate
more than 60% of the total canon (MEF 2013). The central government
has tried to remedy this inequality with compensation mechanisms, such as
the reduction of the canon percentage for the smallest subnational levels of
government, the district, where the resource is located and an increase of
the canon percentage for the largest subnational levels of government, the
region. This was established to reduce disparities among subnational gov-
ernments and increase capacity to invest in projects on the regional level.
However, there is still a significant disparity among these subnational areas.
8 E. Dargent et al.
140
120
100
80
60
40
20
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fig. 5 Increase of socio-environmental conflicts in Peru (2004–2012) (in num-

ber of conflicts). Source Self-elaboration, based on Ombudsman Office-Peru data
The other face of economic growth based on natural resources has

been civil unrest. The Ombudsman’s Office (Defensoría del Pueblo, DP)
registered a systematic increase of socio-environmental conflicts across
the country since the extractive cycle’s beginning in 2004. The number
of these conflicts grew surprisingly in 2008 when the economic cycle
reached its peak (Fig. 5), with mining as the economic activity with the
strongest link to socio-environmental conflict (Orihuela et al. 2014).
Researchers coincide in identifying socio-environmental conflicts with
the redistributive debate associated with the canon, and environmental
problems associated with the extractive activity, like the quantity and quality
of water, as main forms of conflict. Redistributive disagreement and envi-
ronmental unrest feed one another in the generation and evolution of pro-
test (Arellano-Yanguas 2011a; Bebbington 2013; De Echave et al. 2009;
Paredes and De la Puente 2014). Orihuela and Paredes (2014) discuss one
aspect of this unrest: land concessions. The authors document that con-
cessions of hectares to mining have been increasing since 2004, reaching
a peak of more than 4000 hectares in 2011. Added to this is the pressure
of diverse concessions frequently falling to the same land area, due to a lack
of coordination between state institutions. In the same hectare, there can
be an overlap of mining, forest, and agricultural concessions, which gen-
erate greater rivalry for the use of territory (Orihuela and Paredes 2014,
p. 13). Indigenous communities of the highlands and Amazon have been

particularly affected by the overlapping of concessions, with great exten-
sions of their territory leased to the mining sector in the highlands and to
hydrocarbons in the Amazon (Bebbington et al. 2008). In Peru, there is
no complete cadastre of indigenous communities, nor is there a verification
process completed before providing concessions to a private entity. As a
result, concessions are frequently given for lands that belong to these com-
munities (IBC 2015).8
With new technologies in the recent resource boom, extractive indus-
tries have expanded to new territories. Mining expansion has reached
places not only where traditionally there was mineral exploitation, but also
where mining activity had never been significant. With the change of tech-
nologies from tunnels to open pits, mining has become more extensive
and visible, as well as its transformation on territories and society (Paredes
2016). Less use of unskilled labor in direct operations has changed the
type of social contract that existed between enterprises and communi-
ties and thus demanded the production of new institutional forms to
regulate this relationship. An example of this is the adoption of corporate
social responsibility policies by enterprises. The adoption of these policies
has occurred without exception throughout the hydrocarbon and min-
ing industry, at least formally (Sanborn 2010; Perla 2009; Durand 2006).
In many occasions, extractive enterprises and surrounding communi-
ties do not reach an agreement, either due to redistributive differences or
because communities are against the start of activities that can affect their
way of life, thus unleashing conflict. The state had to develop a mediator
role for which it was not prepared. In different places, its role in promot-
ing private investment interferes with its duty to mediate between enter-
prises and society, an aspect that has been neglected. In this context, the
production of new state forms of redistribution and regulation became
vitally important. The state has the challenge of building institutions that
permit it to lead resource spending, temper civil unrest, and respond to
redistributive demands while the boom continues to nourish these prob-
lems and challenges. The main institutional transformations, which will
be the focus of this book, are described briefly in the following section.
10 E. Dargent et al.
2 Institutional Developments in the Cycle

of Abundance: Benefits and Costs Management
This book studies diverse institutional state developments propelled by

a new extractive-led economic growth cycle. Even though the Peruvian
state experienced other important transformations during the same period,
this book studies those that are most directly associated with the impact of
extractive industries.9 Institutions are divided into two groups. On the one
hand, some institutions have emerged to manage the (distribution of the)
benefits of resource extraction. On the other hand, some institutions have
emerged to manage the (distribution of the) cost of resource extraction.
First, the canon of subnational governments has been the key redis-
tributive institution during this commodity boom cycle. Through this
institution, contingent sums of economic resources have been transferred
to regions and localities that produce minerals and hydrocarbons. The
first canon rule, for hydrocarbons, can be traced back to 1976 when it
was calculated over production value, and to 1983 when it began to be
calculated through income tax (Klaver 2002, p. 56). This institution
was reproduced in 1996 to redistribute mining rents. It determined the
“return” of approximately 50% of income obtained by natural resource
exploitation to producing jurisdictions (Annex 1). In the case of the
mining canon, this return is distributed among all provincial and district
governments in the producer region accordingly: poverty index (40%),
Table 2 Different types of canona
Type of canon How much does it constitute?
Mining 50% of income tax that mine owners pay to exploit mining resources,
metals, and nonmetals
Hydroelectricity 50% of income tax that enterprise concessionaries pay for the genera-
tion of electric energy that uses hydrological resources
Gas 50% of income tax, 50% of royalties, and 50% of state participation in
service contracts
Fishing 50% of income tax and fishing rights paid by fishing enterprises dedi-
cated to commercial extraction of large-scale fishing
Forest 50% of payment of rights to use forest products
Oil 12.5% of production value of enterprises that exploit oil, gas, and
condensates
aInformation obtained from the MEF: http://www.mef.gob.pe/index.php?option=com_content&view
=article&id=454&Itemid=10
producing provincial governments (25%), producing district govern-

ments (10%), and producer regional governments (25%). Of this last
25%, which is allocated to producer regional governments, 20% is trans-
ferred to state universities in these regions for research (Table 2).10
The remaining institutions explored in this book aim to regulate and
mediate another reality that, as we highlighted, has marked this cycle:
the explosion of social protest. This generated demands for greater envi-
ronmental regulation and state presence to guarantee an adequate redis-
tribution of natural resources such as water, used in the extraction of
minerals and hydrocarbon, and mitigate the negative impacts of extrac-
tive activity. Only toward the end of this cycle of more than a decade did
the Peruvian state begin to complete substantial reforms regarding these
issues. From an almost nonexistent regulatory bureaucracy in terms of
environment and participation in the use of natural resources, reforms
emerged. These reforms seemed unfeasible given the political economy
and interests of private enterprises in the extractive cycle.
In this sense, the first costs-management institution analyzed here
is that related to the construction of the new environmental regime in
Peru. The creation of the Ministry of Environment and the Evaluation
and Environmental Supervision Office (OEFA) signified a considerable
advance regarding the strengthening of environmental institutions in the
country. Especially important has been the role of OEFA with its work
in auditing, monitoring, and evaluation of extractive enterprise activities.
Likewise, the Servicio Nacional de Certificación Ambiental para las inver-
siones sostenibles, SENACE recently initiated work as the system of envi-
ronmental impact evaluation that promises an environmental certification
independent of mining and hydrocarbon projects.
Second, a third group of cost-management institutions concern
socio-environmental conflict associated with the commodity boom. The
Ombudsman’s Office, an institution with constitutional autonomy, initiated
a campaign of civil unrest monitoring. With this, it created the Office for the
Prevention of Civil unrest and Governance and the Office of Environment,
Public Service, and Indigenous People. In 2012, the Prime Minister’s Office
created the National Office of Dialogue and Sustainability. With these insti-
tutional developments, the executive office recognized for the first time the
contentious character of this type of activity, the inadequacy of institutional
framework in Peru, and the necessity of a more active state intervention in
the management and prevention of these conflicts. Previously, similar con-
flict prevention functions were conducted by smaller and less resourceful
offices in the Prime Minister’s office. All of these institutional transforma-

tions, which have occurred toward the end of the extractive cycle, are still
weak; however, we cannot deny that they changed the institutional land-
scape to manage the conflict cost associate with the commodity boom.
A third group of costs-management institutions that aim to give the
population mechanisms to decide or influence state decisions over invest-
ments in territory and use of resources resulting from the boom include
prior consultation and participatory budgets. Prior consultation as an
institution in Peru emerged with the ratification of Convention 169 of
the ILO, which recognizes the right of indigenous peoples to a free and
informed prior consultation about development projects or measures that
include the exploitation or conservation of natural resources that affect
them directly. Despite the convention being ratified in 1989, few coun-
tries implemented processes of prior consultation. Peru approved La Ley
del Derecho a la Consulta previa a los Pueblos Indígenas u Originarios
(Nº 29785) in 2011 after numerous conflicts related to the operation of
extractive industries in indigenous territories (Paredes 2015). The par-
ticipatory budget, approved in 2003 (DS N171-2003-EF), is geared to
strengthening state-society relations by allowing local authorities and civil
society organizations to define the way in which resources are allocated
(Rodríguez et al. 2007; Valdivia 2012).
As indicated before, these institutional transformations are not the
only ones that have occurred in Peru during the last commodity cycle.
However, they are the ones most linked to the expansion of extractive
industries. Besides, these institutions have reformulated state–society rela-
tions in the past decade at the national and local level and, as explained
below, reflect the power struggle between state actors and those benefitting
from and affected by the natural resource boom. It is critical to mention
that these transformations do not constitute a finished institutional sce-
nario. Capturing the complex reality of institutions with simple concepts is
never easy because the problem is how to define institutions. As mentioned
above, these cannot be limited to the mere design of laws and rules, and
much less exclusively formal laws and rules (Streeck and Kathleen 2005).
Institutions require support and enforcement to be relevant, in other
words, having the capacity of regulating and sustaining an important area of
social life (Rueschemeyer 2009). This proposes an outlook on rules as fin-
ished processes, but also to processes and collective actors that make them
possible. Thus, the institutional regimes that we decide to study in these
chapters are overall institutional processes that have not changed entirely
within any commodity cycle, however significant this change has been. The
resulting institutional regimes in a cycle of abundance include changes as

well as continuities in a long-term and gradual process (Thelen 2010).
3 Literature and Research Questions

Literature about the natural resource curse is vast and diverse. The
resource curse, however, mostly shows a discouraging situation of
resource governance. First, abundance has been associated with economic
growth. This is because primary exports do not need to be produced but
rather extracted, without transforming non-renewable natural capital into
other types of more sustainable capital (human, productive).11 Second,
abundance is also associated with political anomalies, like the so-called
rentier state,12 which thanks to resource income detaches itself from soci-
ety. Rentier states construct authoritarian and clientelist apparatuses over
a debilitated civil society (Ross 2001, 2003; Moore 2000; Ascher 1999).
Third, resource abundance also affects the stability of political regimes.
Some argue that resource wealth is damaging for democracy (Ross 2001,
2012; Jensen and Wantchekon 2004; Ulfelder 2007; Tsui 2011; Smith
2004), while others argue that this depends on certain previously existing
conditions (Dunning 2008; Usui 1997; Mitra 1994). Finally, abundance
affects social cohesion and the probability of conflict. These resources
increase opportunities to finance insurgency (Collier and Hoeffler 1998,
2000, 2002, 2004; Fearon and Laitin 2003; Ross 2004; Sambanis 2001;
Doyle and Sambis 2000), and its presence creates incentives for income
disputes (Leite and Weidman 1999; Collier and Hoeffler 2000), which
are not always violent, but are destabilizing for governments (Ponce and
McClintock 2014).
Some researchers have developed explanations focused on the impor-
tance of institutions for developmental outcomes. Thus, “institutions
matter” research argues that the effects of natural resource abundance
are not negative in all cases, but rather the channeling of these resources
to other forms of non-natural capital can have positive effects if coun-
tries have been able to develop solid institutions. Some condition the
effect of abundance to institutions existing at the moment that resources
begin to be exploited (Trovik 2009), which can make resources a bless-
ing (Robinson et al. 2006; Mehlum et al. 2006). Part of this literature
understands the existence of these institutions as a process external to
resource abundance (Kurtz 2009). Thus, when “good” institutions exist,
they will help the governance of natural resources (Waldner and Smith
2015).
Other literature highlights the role of institutions, but without see-

ing them as external to resource abundance. Some authors propose that
when institutions are constructed at the same time as the abundance
cycle, their construction is debilitated by “state rentierism” and abun-
dant income coming from extractive industries. Therefore, the timing in
which institutions are constructed is the key to assure their destiny (Karl
1997; Smith 2004; Pierson 2004; Thelen 2003). Other researchers note
that in addition to the importance of timing, the impact of the resource
cycles on elites must be observed. Institutional efforts can be debili-
tated not only by rentier state growth, but also by how economic abun-
dance conditions the possibilities of economic elites to form coalitions
to encourage and sustain efforts for institutional construction (Paredes
2013; Saylor 2014).
This extensive and significant literature is, however, fundamentally
macro-historic. Even though these studies are enlightening about large
processes triggered by abundance cycles, they do not look deeper into
more intermediate processes, nor do they offer a closer look at the dif-
ferent institutional trajectories in dispute during the same abundance
cycle or within the same country. Differences that separate cases into
negatives and positives in these studies, regarding institutional construc-
tion, obviate different possible intermediate results. The macro outlook
overshadows diverse subnational processes that reveal much about the
determinants of institutional construction. Looking at cases such as Peru
more closely and observing the different dynamics that occur within the
same case permits to look at more complex realities and offer explana-
tions, which are less fatalistic or deterministic about resource-based
development. Analysis on the intermediate level, which intend to under-
stand the diverse sectorial dynamics of institutional construction, offer
explanations that take into account the continuities and legacies, as well
as the emergence of new entrepreneurial actors and new kinds of institu-
tions.
The authors of this book believe that it remains necessary to deepen
the analysis about how state institutions are constructed during com-
modity cycles. Likewise, the book aims to examine how different insti-
tutional trajectories take place within the same country, despite the
sharing of country-level context. It is necessary to open the black box
of “institutions matter” and investigate which factors cause institu-
tional development to activate, what makes this activation faster in some
cases while slower in others, and what determines the outcomes of
the implementation of institutions aimed to manage the benefits and cost

coming with the commodity cycle.
We focus on the process of institution building and institutionali-
zation more than on the “rules of the game.” We consider that rules
alone without support and enforcement can hardly been called insti-
tutions. In this book, we consider that the popularized definition of
institutions as “rules of the game” (North 1990) can acquire a per-
verse connotation, even more so if these rules are limited only to for-
mal rules (Streeck and Kathleen 2005). We found the focus on formal
rules restrictive, given that the level of enforcement of formal rules var-
ies greatly from one context to other. In general, in developing coun-
tries such as Peru, the rules of the game once approved are not well
enforced, which explains citizen distrust in the rule of law: There is
an expectation that approved rules will not be followed (Levitsky and
Murillo 2009).
Due to this gap between formal rules and effective construction of
support and enforcement mechanisms, in this book, we give as much
importance to the “rules of the game” formally instituted as to the
state organizations that act in the spectrum of these rules (Greif 2006).
We sustain that making “institutions” a synonym for “rules” (North
1990) has misled academia to put the main focus on rules and assume
that organizations are only a consequence of them. Even though we
agree that it is important to distinguish between rules and organiza-
tions, we also believe that the latter have some autonomous agency
over the former. For that matter, we consider that state (and society)
organizations intervene in the process of the construction of support
and enforcement mechanisms that convert a rule into a proper institu-
tion that functions. It is because of this that we cannot study institu-
tional construction without considering also the organizations that give
rules life, in particular such organizations then become the “embodi-
ment” of the rules themselves (Di Maggio and Powell 1983; Campbell
2004, 2010).
In this way, this book intends to contribute toward enriching a litera-
ture largely focused on macro-historical developments and formal rules
of the game whose capacity to regulate is unknown. We open the door
to new forms of comparison with other states in Latin America where
initial conditions of the resource boom were different. This would helps
to better understand the trends that develop once commodity prices
return to lower levels. While country comparison exceeds the objectives
of this book, we aspire to contribute to a comparative dialogue that can

be enriching from detailed and unique perspectives like the ones that we
offer: What in particular is the manifestation of the boom in Peru and
what does it have in common with the rest of the region? How do insti-
tutional, social, and cultural legacies of the country interact with a com-
mon regional phenomenon (commodity prices) to give place to unique
results? And how do these processes help to understand trends that
develop after the boom?
4 Arguments of the Book

We propose that three dimensions are crucial for understanding institu-
tional development in the face of a resource boom. These dimensions
are: (a) preceding power distribution of state and society actors,13 (b)
historical repertoires of state and society action, and (c) the entrepre-
neurship of actors embedded in networks of transnational activism.14
Although somehow related, these three dimensions have independ-
ent relevance to explain the way in which institutional development
occurred in Peru within a context of rapid extractive industry expan-
sion. The following table summarizes our argument. In this section,
we first present these three dimensions and how they are relevant for
the development of institutions to manage benefits and institutions to
manage costs. Through the discussion of these dimensions, we briefly
explain how the cases discussed in the book’s chapters exemplify this
relevance (Table 3).
4.1 Preceding Power Distribution of State and Society Actors

The preceding power distribution, before the beginning of the resource
boom, constitutes an important determinant of the way in which insti-
tutions develop during the resource boom. This power distribution is a
result of previous economic, social, and political processes that have pro-
duced particular configurations of power among state and society actors,
especially relevant in determining who is benefited by the enhanced
resources brought by the boom. As a result of these processes, actors
will be in a very different position in regard to their capacity to shape
institutional development. We propose the following four types of actors
as crucial in Peru and, more broadly, in countries affected by a resource
Table 3 Shaping the arena for institution building
Explanatory dimensions Institutions to manage
Benefits Costs
Peru
(1) Preceding power The institutions were created Institutions were created and
distribution of state and and implemented fast and did implemented slowly and led
society actors (strength not lead to unrest because to unrest because they had a
of business, state agents, distribution had no sig- significant effect on powerful
political parties, and civil nificant effect on big business business stakeholders
society) stakeholders. Subsequently, The weakness of the politi-
however, a state agency, the cal parties and civil society
Ministry of Economy and hampered the development
Finance (MEF), put limits of a national-level proposal
on the institutions in view of for institutional change,
their considerable power vis- despite a high level of local
à-vis weak local governments unrest. Despite being frag-
and universities mented, this impacted on
Neither civil society nor the economy and policy.
political stakeholders had
enough power to promote
reform for improving the
institutional implementation
of benefits.
(2) Historical repertoires The legacy of the canon from Absence of institutional
of state and society action a previous resources boom reference points for dialogue
facilitated institutional imple- and negotiation. The round
mentation tables were the exception
There was, however, no There were, however,
organizational repertoire for effective legitimate local
the central state to support mobilization repertoires
implementation. The state (road blocks) for exerting
was not sufficiently developed pressure and disturbing both
at local level. the economy and policy.
(3) The entrepreneurship There was no entrepreneurial State and civil society agen-
of actors embedded in agent to promote and use cies working in transnational
transnational networks the global arguments and advocacy networks pro-
agendas, above all for natural moted the national transla-
resources, for productivity/ tion of agendas, standards,
diversification and human and global epistemes. This
and/or technological devel- produced crucial but limited
opment. progress.
boom: the strength of business, of state agents, of political parties, and of

civil society.
Extractive private actors, in particular extractive international and
national industries, had considerable leverage in Peru at the start of
the boom. This is partly the result of radical neoliberal reforms that
occurred in the country during the 1990s (Durand 2006). These
reforms included new mechanisms to encourage investment in mining
and hydrocarbons as well as the privatization of state owned mining
enterprises. These policies were an effort to attract foreign investment
after the severe economic crisis in Peru during the late 1980s. As a
result, mining industries became more important throughout the 1990s
and when the resource boom hit the country, the central state was more
concerned with authorizing new exploration and investments than pro-
ducing a regulatory framework for these strengthened actors and their
growing activities.
Market reforms also contribute to understand the particular configu-
ration of state actors’ strength. The process of reforms gave especial rel-
evance to an already powerful state agency, the Ministry of Economics
and Finance (MEF), while dismantling other areas of the weak develop-
mental state, especially planning institutions. MEF is without a doubt
one of the most powerful ministries and is also directed almost exclu-
sively by technocrats (Durand 2006; Vergara 2012; Dargent 2015). This
ministry has a legacy as a “cashier,” viewing its own function as limiting
deficit and driving market reforms, which generated inherent mistrust in
state spending (see Dargent and Chavez in this book). The MEF’s neo-
liberal ideology neglects to a considerable degree other state functions,
such as planning or bureaucratic reform. During the 1990s, this ministry
became a watchdog of public investment and public deficit but left aside,
out of lack of interest, other competences such as planning. This pattern
of action continued in the 2000s.
Also relevant, a decentralization reform approved in 2002, only few
years before the beginning of the boom, gave new responsibilities related
to extractive industries to recently created regions, which lacked basic
capacities to implement these duties. Local governments also show simi-
lar patterns of institutional weakness. As a result, Peru, a weak state, has
at its center a powerful state organization capable of limiting expendi-
ture and systematically opposing planning initiatives, while the territorial
scope of other central state actors and the bureaucratic capacities of local
governments remain weak.
At the same time, political parties were weak and disarticulated

in Peru at the dawn of the commodity boom. The causes are many
and their weight in the outcome disputed. The economic and politi-
cal crisis of the 1980s weakened the legitimacy of political parties
(Tanaka 1998). Political violence severed their territorial reach. The
authoritarian government of Alberto Fujimori (1990–2000) actively
discredited and reduced the incentives for political organization. The
consequence is clear: National political parties have limited strength,
territorial reach, and lack basic levels of articulation (Zavaleta 2014;
Tanaka 2005, 2010; Vergara 2014). As shown in the chapters of
this book, political parties have for the most part remained absent
in channeling and mediating in local conflicts produced by extrac-
tive activities. Nonetheless, national political groups represented in
Congress can start some processes, such as the decentralization pro-
cess or the establishment of new distributive rules as the canon laws
approved in 2002–2003.
Finally, diverse processes dismantled and reduced the relevance and
articulation of civil society actors in the territory. The internal violence,
the weakening of political parties, Fujimori’s authoritarian govern-
ment, and the effects of market reforms over certain economic activities
reduced the strength of civil society actors (Burt 2009). As discussed in
the following chapters and later in this section, these organizations are
far from being irrelevant. They are important actors at the local level,
especially opposing extractive activities. And their transnational networks
increase their relevance (Paredes 2016). Nonetheless, their influence to
shape institutions at the national level is limited.15
This power configuration explains the distinct development of institu-
tions to manage benefits and costs. Regarding institutions that manage
benefits, political actors were capable of starting processes of institutional
construction that changed the way resources were distributed across the
country. Especially relevant were regional actors present in Congress
and the Executive after the 2000 transition: They not only were able to
start a new decentralization process, but also to adopt new canon legisla-
tion that changed the centralized assignment of resources that existed in
the country. The canon was approved at a time of prosperity, although
not at its peak, and was propelled by national political actors that in this
moment had the power to push decentralization reforms, among them
distributive reforms, expecting that the activation of these institutions
would increase their political support in the regions (Tanaka 2002). In
this way, political actors strengthened by the circumstances took advan-

tage of the demand for a new redistributive institutional agreement that
had been legitimized in previous extractive cycles and crystallized with
the demand for decentralization (Tanaka 2002, pp. 24–31).
These changes in the law on the canon had major consequences for
the distribution of resources during the current boom. Nonetheless, the
weakness of political actors and a legacy of weak state territorial institu-
tions explain why these abundant resources were not used according to
the goals of the Canon institutional reform. Also relevant, the MEF was
able to block the irresponsible expenditure of these resources at the local
level, but especially at the beginning of the boom, it was not concerned
with promoting a more efficient use of these resources. In conclusion,
although adoption was quick and swift, implementation of these laws
was much less successful given weak state capacity at the local level and
a strong MEF. Weak political actors at the national and regional level
were not able to push for increased expenditure. Thinking comparatively,
stronger political actors at the national or regional level, may have been
able to balance the MEF’s power and increase expenditure levels, but not
necessarily in an efficient non-clientelist manner.
Also important, as will become clear in the next section, the devel-
opment of these redistributive institutions was also fast because private
actors, strong veto actors in other processes of institutional development,
showed little or no interest in this process of redistributive institution
building. This was not the case when during the resource boom cycle
other forms of redistributive institutions were discussed, such as increas-
ing taxes and contributions for extractive activity where private actors
participate actively. The strength of business actors and the weakness of
political actors, especially on the left, help clarify why in contrast to other
Latin American countries, such as Bolivia, in Peru we do not find strong,
controversial changes in tax laws or nationalization of private enterprises.
The development of institutions to manage costs, on the other
hand, shows a very different development. The strength of business
actors was a veto for the development of other institutions and state
organizations, such as environmental and consultation ones. In this
case, the process was slow and conflictive, with a more limited success
in the development of these institutions. As discussed in Chaps. 3, 4,
and 5, these institutions faced the constant opposition of private extrac-
tive actors. The weak state territorial reach of the newly created state
organizations also did not help to advance the enforcement of these

new institutions.
As we can see, the preceding political economy conditions in Peru
are crucial for understanding institutional development in the coun-
try. Nonetheless, this power configuration does not fully explain the
outcomes. To begin with, it does not explain what guided the actors’
choice of institutions. Some other factors structured these choices. In
other areas, the absence of blueprints made institutional development
more difficult. Second, we find an agenda of institutional development
that does not fully correspond to this power configuration: more insti-
tutions to manage benefits and cost than expected developed in these
years. What explains this development in the face of adverse conditions
and powerful veto actors? The discussion below aims to fill these gaps.
4.2 Historical Repertoires of State and Society Action

This book builds on the perspective that institutions are historical con-
structions (Hall and Taylor 1996). Institutional development of the
Peruvian state during the most recent resource boom cannot be under-
stood separate from the history of extractive industry dependence
(Thorp et al. 2012). The first chapter (Orihuela and Gruber) and the last
(Málaga Sabogal and Ulfe) of this book, and to a lesser extent the chap-
ter about the research canon in state universities (Dargent and Chavez),
show the importance of historical repertoires of state and society action
on resource-based growth. In conjunction, these chapters propose that
studying the process of institutional construction as a phenomenon
resulting exclusively from a resources cycle is a problematic and errone-
ous enterprise.
Legacies that matter a great deal are what we conceptualize as the rep-
ertoires of state and society action. Our understanding of institutions as
the output of historical repertoires shaping agency is influenced by our
reading of different institutionalisms in the social sciences and conten-
tious politics literature (McAdam et al. 1996; Greif 2006; Scott 2008).
Preexisting repertoires of state and society action function as mental
maps for the thinking of new institutional design. If the keyword of the
previous dimension is power, here it is culture, and we believe that being
interconnected, power and culture have relative autonomy one from
the other. The collected evidence in this book shows how exchanges
between state and non-state agents are mediated by deeply rooted legal
practice, informal political habits, and organizational repertoires.
Thus, the authors of the first chapter propose that the fundamental
redistributive institution of the recent abundance cycle, the canon, cannot
be explained without examining the history of extractive resource depend-
ence in Peru. Orihuela and Gruber argue that the justification of such a
redistributive arrangement between Lima and the regions was shaped by
the historically constructed repertoire of state and society action. By the
1970s, the long nurtured discourse for decentralizing resource income
was becoming formal rules for the oil canon in few regions given the real-
ity of extractive dependence and a weak state that had historically failed
to redistribute macroeconomic development. With the dictatorship of
General Velasco Alvarado, a “regionalism of resources” took full shape.
Toward the beginning of the century, the mining canon was well installed
in the public imagination as the natural mechanism to fairly redistribute
mining fiscal revenue. Canon rules evolved to favor not only the recently
instated regional governments, but also state universities with the prom-
ise of improving public research, as Dargent and Chavez discuss. Chapter
2 explains that representatives from regions supported this agenda of the
canon for enhancing research and received virtually no opposition.
Moreover, Chaps. 2 and 4 identify the national practice of ani-
mated, sometimes frantic legal development, without corresponding
interest of reformers for state organizational construction. On one
hand, Orihuela and Gruber argue that fiscal decentralization as much
as the mining canon were political projects that involved little of state-
making. With the 1990s neoliberal reforms, the repertoire of state
action was that of the idealized minimalistic state. Thus, MEF techno-
crats and political elites would not come with the idea of investing in
new state capacities for canon spending in, for example, human capital
formation or productive diversification. On the other hand, Orihuela
and Paredes argue that strong autonomous regulatory bodies do not
have a long history, which explains the weakness of environmental
regulatory institutions at its point of origin. A historically weak and
minimalistic state creates the mind-frame for building a new weak and
minimalistic state.
If Lima-based policy elites were content with the minimalistic state,
Dargent and Chavez show that regional political elites seemed to assume
that law will somehow create its own organizational capacity for efficient
canon spending by state universities. The argument does not deny that
power interests are behind law-making; the observation is that there is

also a legalistic culture functional to state capture, as well-intended poli-
ticians seem to believe that legal mandates will end up automatically
implemented.
Participatory politics and repertoires of contentious collective action
at the local level, in turn, entailed significant historical repertoires for the
shaping of the conflict management arena. The habit of blocking roads
during protests and the practice of establishing round tables (mesas de
diálogo) became the instituted steps one and two of socio-environmental
conflicts. Paredes and De la Puente show that without much articulation,
local conflicts were able to undermine the governments’ economic and
political goals, opening opportunities for institutional change, though
they did not have the capacity to move these changes forward.
4.3 The Entrepreneurship of Actors in Transnational Networks

Legacies and the power of organized interest are important. However,
one cannot ignore how actors collude in networks nationally and inter-
nationally to make different forms and levels of institutional develop-
ment possible. This process of development is clearly a gradual process,
where the results of the cycle coexist and overlap (Thelen 2010). Four
of the chapters of this book argue toward the importance of institu-
tional entrepreneurs embedded in networks of expertise, sharing norma-
tive and epistemological principles with peers around the globe, which
have helped to give form to institutions in Peru during this extractive
cycle.
Globalization occurs in different dimensions, and one of them has
been the growing networks of knowledge-based “expertise” (Haas
1992), some of which become involved in transnational political activ-
ism (Keck and Sikkink 1998). These networks are “organizational fields’
characterized by connectedness, sharing structures and patterns of coa-
lition, information load and mutual awareness” (Powell and DiMaggio
1991, p. 65). They could be very influential in shaping institutional con-
struction within their field, in particular when their knowledge of this
field is publicly recognized (Haas 1992, p. 3).Transnational networks
of activism have globalized national politics (Keck and Sikkink 1998).
Political contention has been organized voluntarily, reciprocally, and with
a dynamic flow of information to promote/defend causes, ideas, and
norms globally. Public actors in the state acting as part of these networks
acquire an elite position in the state, similar to professionals in econom-
ics and law (Dezalay and Garth 2002). The influence of institutional
entrepreneurs embedded in these global networks expands to a particular
field, such as human rights, environment, or gender (Keck and Sikkink
1998), and go beyond state and civil society borders to promote their
normative agenda (Abers and Keck 2003).
Orihuela and Paredes show the importance of the environmental
and human rights profession in counterbalancing the strong opposition
of economic interest in building greener institutions in Peru. In a con-
text of high socio-environmental unrest, the connection of key national
state actors, such as the Ombudsman’s Office and environmental pro-
fessionals, embedded in transnational networks of activism was crucial
to driving institutional change. This occurred even when this transfor-
mation seemed impossible given the sustained opposition of strong
economic groups. The authors propose that the late appearance of
autonomous environmental regulation organizations is the result of a
poor state legacy and political power of extractive groups with strong
economic interests resisting greater and more effective environmental
regulation of large extractive projects.
Likewise, Paredes and De la Puente show that extractive economic
power has also opposed the meaningful participation of weak grass-
roots actors in the allocation of rights over natural resources, includ-
ing consultation for indigenous people. The human rights institution,
the Ombudsman Office, was crucial to make public grassroots opposi-
tion and drive a public agenda over conflicts and extractive industries.
Both Chaps. 4 and 5 show the importance of actors embedded in trans-
national networks to counterbalance the resistance of economic inter-
est and the weakness of grassroots actors to build institutions that can
manage the costs of the commodity boom. The chapters highlight the
importance of these actors contributing to the late but still significant
construction of institutions for environmental regulation and participa-
tion in extractive operations.
These new institutional developments cannot be explained without
understanding the existence of global agendas that are translated domes-
tically by the action of national actors participating through normative
and epistemological networks (Campbell 2010; Powell and DiMaggio
1991). The chapters of Málaga Sabogal and Ulfe, and Paredes and De
la Puente reveal that global agendas also serve for the invention of new
repertoires of state and society action (as defined in the previous sec-
tion). These new repertoires will become legacies for the next com-
modity boom. The rapid expansion of mining and hydrocarbons toward
territories of indigenous communities and villages has created new
agencies and the justification for new institutional agreements regard-
ing resource extraction and land use. These processes are being crystal-
lized in new repertoires of state action, such as local licensing, dialogue,
negotiation, and consultation, which are legacies for future booms. The
construction of these new repertoires has occurred in a context of enor-
mous global and cultural fluidity. The chapter by Málaga Sabogal and
Ulfe vividly illustrates how ancestral communities involved in intense
dynamics of social and cultural change reconstruct themselves politi-
cally through global categories of rights that protect their survival with
the adoption and recreation of new forms of leadership, organization,
nationality, and territory (Greene 2009).
The chapter by Dargent and Chavez shows a sharply contrasting
reality. In spite of the influential global agendas that strongly recom-
mend the transformation of natural into human capital, in Peru such
a policy paradigm was not translated domestically into new repertoires
of state and society action. In particular, the chapter shows the lack of
institutional entrepreneurs at the state level to transform institutions
managing the benefits of the commodity boom. This is, for instance,
the transformation of canon resources into the development of research
on science and technology and the diversification of regional econo-
mies. Likewise human rights and environmental professionals, eco-
nomic professional in Peru shared ideas and a common “technocratic”
epistemological framework. However, these ideas were inspired by the
Washington Consensus (Dezalay and Garth 2002) rather than by sus-
tainable development agendas. The MEF’s evaluation of the canon for
research was that these universities did not have the capacity for imple-
mentation and they launched the construction of bureaucratic “chains,”
instead of improving the capacities of universities and local govern-
ments. The result was institutions with many “chains” channeling
resources for the construction of a state of cement with limited institu-
tional “trickle down.”
5 Book Methodology and Chapters

A purpose of this book is to show the advantages of interdisciplinary
work. This is understood as an exercise that intends to retain the cen-
tral core of individual disciplines within the social sciences, while also
attempting to promote a flexible approach to the phenomena studied.
This research project emerged from the interest of researchers (anthro-
pologists, sociologists, economists, and political scientists) that observe
with mistrust the divisions created by disciplines of social sciences to
study phenomena, like state construction, where there is a clear intersec-
tion of political economy, state-society relations, as well as an increasing
internationalization of both phenomena.
We propose that this interdisciplinary flexibility has some advan-
tages such as (1) being able to understand the state not only as a
reflection of a natural resources boom economic policy, but rather as
an entity impacted by the change of national social forces both global
and local; (2) it helps to observe state transformation as a sequential
and historical process, where institutions not only give form to extrac-
tive boom effects, but rather they are formed by cycles of expansion;
(3) it allows to see the ideas, identities, and epistemological frameworks
that give form to the rules that are activated and converted into rel-
evant ones; and (4) this type of approximation is enriched by different
approaches from different disciplines that study diverse structures and
actors on varying levels, but all framed within the same body of analy-
sis, allowing us to see the effects of boom institutional transformation
within the state. Thus, this is a book that invites the reader to resume
the classical trajectory of the social sciences in Latin America and old
comparative economic policy where these divisions were less noticea-
ble than in current specialized research (Hirschman 1958; O’Donnell
1973).
This book is organized into seven chapters. The second chapter, by
Orihuela and Gruber, explains how the development of the mining
canon was possible. As mentioned before, the authors argue that the
need of an institutional distributive arrangement between the center and
regions is a historical repertoire of state and society action that can be
traced to the 1970s and 1980s. The authors show how in Peru, the leg-
acy of regional grievances and state failure shaped the making of the min-
ing canon, “at the pace set by contingent processes and sudden crises.”
The chapter reconstructs canon history and its institutional evolution up

to the recent natural resource boom.
In the third chapter, Dargent and Chavez study why the percent-
age of the canon allocated to research in state universities is not being
used for its proposed objectives. Based on two case studies (San
Agustín University in Arequipa and San Antonio de Abad University
in Cuzco), the authors explain that poor results are due to institu-
tional characteristics and legacies involved in the approval and imple-
mentation of canon legislation. Dargent and Chavez propose that
increasing state income, and the fact that this expansion of the pub-
lic budgets did not mean a significant cost for other groups through
tax expansion, helped to activate the formation of research canon.
Nonetheless, three factors are the key for understanding weak imple-
mentation straying far from the law’s objective: weak political parties,
weak and clientelist state universities, and a strong MEF worried more
about irresponsible expenditure than about institutional weakness or
more efficient expenditure.
In the fourth chapter, Paredes and Orihuela explain the rise and
evolution of environmental regulatory institutions. They conclude that
this has occurred in fragmented and often unconnected layers, which
have initiated a route of autonomy only because of the institutional
entrepreneurship of environment professionals acting together with
global networks of advocacy and in a context of greater international
pressure.
In the fifth chapter, Paredes and De La Puente explore institu-
tional changes that developed in Peru with the explosion of civil unrest
related to extractive industry expansion. The chapter argues as a main
argument that Peru has had a limited translation of institutional agen-
das that were spread to govern enterprise-community relationships
globally. The chapter explains that extractive laws were modernized,
but the opposition of strong extractive interest and weak grassroots
actors prevented the building of meaningful institutions of local par-
ticipation and consultation. The authors argue that the state had to
acknowledge these agendas little by little. In this gradual process, the
Ombudsman Office, became a crucial and authoritative actor driving
the agenda of institutional construction to manage the cost of conflict
created by the commodity boom.
In the sixth chapter, Málaga Sabogal and Ulfe analyze “the ups and
downs” of the process of identity construction in times of commodity
boom looking at the region of Espinar in Cuzco. The authors present

as their main argument the idea that the construction of K’ana indig-
enous identity in Espinar is reshaped in relation to a process that con-
cerns the development of institutions to manage the cost of the boom
in Espinar: the prior consultation. In a detailed analysis of how local
people in Espinar recognize that they are the heirs to the K’ana nation,
the authors discuss the indigenous policy and how this acted as a strat-
egy in a community, which found itself in the eye of the storm of social
unrest in Peru.
The last chapter of this book presents general conclusions, in which
the authors assess the case studies and reflect on state construction
in times of natural resources boom and briefly discuss a framework
that can be applied for comparative research.
Notes
1. There is a vast amount of literature that addresses the effect of resource
abundance on a country’s development (Isham et al. 2005; Gleb
et al. 1988; Bannon and Collier 2003; Sala-i-Martin and Subramanian
2003; Davis et al. 2003; Leite and Weidmman 1999; Ross 2003), and
on economic development (Singer 1950; Prebisch 1950; Levin 1960;
Hirschman 1958; Bruno and Sachs 1982; Usui 1997; Anderson 1998;
Karl 1997; Ascher 1999; Mitra 1994, Wood and Berge 1997; Wheeler
1984; Gelb et al. 1988; Auty 1993, 2001; Sachs and Warner 1995;
Leite and Weidman 1999; Gylfason et al. 1999), on the incidence of
conflicts or civil wars (Regan 2003; Ross 2002, 2004; Ballentine 2003;
Auty 2004; Gleditsch et al. 2002; Sambanis 2001; Fearon 2004; Collier
and Hoeffler 1998, 2000, 2002, 2005; Smith 2004; Fearon and Laitin
2003), on the permanence of undemocratic governments (Wantchekon
1999; Jensen and Wantchekon 2004; Lam and Wantchekon 2002;
Ross 2001; Dunning 2008), or on the quality of democracy and
elites’behavior (Moore 2000; Karl 1997; Auty 2001; Auty and Gelb
2001; Trovik 2002; Robinson et al. 2006; Ascher 1999).
2. Thorp et al. (2012) highlight that these resources called point sources tend
to cause great redistributive tensions, for both economic benefits and col-
lateral costs (environmental, social, and political) implied in their extraction.
3. For Peru, see Jürgen Schuldt, Jürgen (2004) and Orihuela (2013) about
macroeconomic challenges; Barrantes et al. (2005), Zegarra et al. (2007),
Loayza et al. (2013), and Arrellano-Yanguas (2011a, b) for quantitative
analysis of inequity and conflict; Paredes (2016), Bebbington (2013), Gil
(2009), Scurrah (2008), and Salas (2008) for ethnography and case stud-
ies of mining conflicts.
4. Toward 2006, private investment in mining was 8,308 million, and

toward May 2015, this figure had reached 56,367. Source: http://ges-
tion.pe/economia/inversion-minera-peru-crecio-142-ultimos-cuatro-
anos-y-suma-us-34020-millones-2138759.
5. Peru is a unitary state that has three levels of government: national,
regional, and local. The local level is divided into provincial and dis-
trict municipalities. There are 25 regions, including the Constitutional
Province of Callao, 194 provinces, and 1828 districts. Regional and
municipal authorities are elected every 4 years and are temporally sepa-
rated of national elections for president and congress, which occur every
5 years.
6. Mining royalties are paid by large and medium-sized mining enterprises
as an exchange for the right to exploit national resources. These royalties
range from 1% to 3% of the renting value of extracted minerals and are
a deductible cost when the income tax is calculated. On the other hand,
there is the contract’s right and validity that is acquired by the conces-
sion title, which is an annual payment that is given by INGEMENT
based on the number of hectares and type of mining activity. Regarding
hydrocarbons, the bulk of state earnings is made up of not only royal-
ties, but also income tax and contract rights of the concession.
7. This is part of the People and Mining Solidarity Program formalized by
Supreme Decree 071-2006-EM.
8. Instituto del Bien Común Perú: http://www.ibcperu.org/servicios/
sicna/; La gran deuda del Estado frente a las Comunidades: http://www.
ibcperu.org/noticia/titulacion-la-gran-deuda-del-estado-frente-a-las-
comunidades/.
9. Other issues certainly deserve greater analysis. For example, researchers
argue that the strengthening of enterprise organizations linked to the
extractive sector is relevant not only for the development of regulatory
institutions, as discussed extensively in this book, but also for the devel-
opment of other institutions and organizations, such as harsher penalties
for protests (CCNNDDHH 2015). Also interesting is the expansion of
illegal economies, in particular related to gold mining (Valencia 2014;
Pachas 2013).
10. Canon on the regional and provincial level is divided in accordance with
the poverty index.
11. For the negative effect of resource abundance on long-term economic
growth, see Mehlum et al. (2006), Engerman and Sockoloff (1994),
Acemoglu et al. (2001), Acemoglu and Robinson (2002), Prebisch
(1950), Singer (1950), Sachs and Warner (1999, 2001), Leite and
Weidman (2002), Auty (1993, 2001), Davis (1995), Garaibeh (1987)
and Chaudhry (1994). This type of resources also produces enclave econ-
omies; see Hirshman (1958) and Seers (1964).
12. Karl (1997), Ross (1999, 2001), Rosser (2006), Tilly (1990), Paredes
(2013), Vandewalle (1998), Luciani (1987), Skocpol (1982), Tanter
(1990) and Gunn (1993). For rent-seeking behavior of elites see Levi
(1988), Robinson et al. (2006) and Trovik (2002).
13. We understand antecedents as defined generally by Pierson (2004, p. 55).
See also Slater (2010).
14. We draw on the literature of transnational advocacy networks, TANs
(Keck and Sikkink 1998).
15. About the performance of regional and local bureaucracies post-decen-
tralization: Barrantes et al. (2012) and Vargas (2010). About the per-
formance of national elites in subnational electoral scenarios: Vergara
(2012). About the political party crisis and current political parties in
Peru: Tanaka (2005), Levitsky and Cameron (2003), Kenney (2003) and
Crabtree (2010).
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Authors’ Biography
Eduardo Dargent is an associate professor of political science at Pontificia
Universidad Católica del Perú. His main teaching and research interests are
comparative public policy, political economy, and the state in the developing
world. He has published in Comparative Politics, the Journal of Latin American
Studies, the Journal of Democracy. His book Technocracy and Democracy in
Latin America (New York: CUP) was published in 2015. He received a PhD in
Government from University of Texas, Austin.
José Carlos Orihuela is an associate professor of economics at the Pontificia

Universidad Católica del Perú. He is a political economist who studies how
institutions evolve, the forging of environmental governance, and the politi-
cal economy of natural resources. His research has been published in Studies
in Comparative International Development, World Development, the Journal of
Institutional Economics and the Journal of Latin American Studies, among other
outlets. Two of his articles were awarded by the Economics and Politics Section
of LASA. He co-authored The Developmental Challenges of Mining and Oil:
Lessons from Africa and Latin America (Palgrave 2012) and has contributed to
various edited volumes. He received a PhD from Columbia University, New York.
Maritza Paredes is an associate professor of sociology at Pontificia Universidad

Católica del Perú. Her book publications include, La Representación Política
Indígena en el Perú (IEP 2015), the co-authored The Developmental Challenges
of Mining and Oil: Lessons from Africa and Latin America (Palgrave 2012), and
Ethnicity and the Persistence of Inequality: The Case of Peru (Palgrave 2011). His
research has been published in World Development, Oxford Development Studies, The
Extractive Industries and Society. She received a Ph.D. from the University of Oxford
and has been Cogut Visiting Professor at Brown University and Custer Research
Fellow at the Rockefeller Center for Latin American Studies at Harvard University.
María Eugenia Ulfe is a Peruvian Anthropologist, Ph.D. in Human Sciences/

Anthropology at the George Washington University (Washington DC, 2005)
and MA in the Arts of the Americas, Oceania, and Africa at the University of
East Anglia (United Kingdom, 1995). Associate Professor at the Department of
Social Sciences and Director of the Master Program in Anthropology and the
Master Program in Visual Anthropology at the Pontificia Universidad Católica
del Perú. Her work focuses on memory, creative culture, violence, and visual
Anthropology. Among her recent publications there are Cajones de la memoria:
la historia reciente del Perú en los retablos andinos (Lima, PUCP, 2011) and ¿Y
después de la violencia que queda? Víctimas, ciudadanos y reparaciones en el con-
texto post-CVR en el Perú (CLACSO, Buenos Aires, 2013).
CHAPTER 2
Deeply Rooted Grievance, Varying Meaning:

The Institution of the Mining Canon
Stephan Gruber and José Carlos Orihuela
Neo-institutional economics maintains that institutions matter for the

long-term performance of the national economies. Douglass North sets
this agenda by studying “the rules of the game,” rather than the organ-
izations playing by them. Formal and informal norms are fundamental
elements in the formation of incentive structures for economic, social,
and political decision-making. Institutional change “shapes the way socie-
ties evolve through time and hence is the key to understanding histori-
cal change” (North 1990: 3). In Peru’s contemporary economic policy
of development, a central rule of the game is the mining canon, a law
that requires national government to give back 50% of mining’s income
taxes to the producing regions. This fiscal rule was amended several times
before emerging in its current form: “the effective and adequate par-
ticipation regional and local governments enjoy regarding total income
and income obtained by the state from economic exploitation of natural
resources.”1 How did such a rule of the game come about and why?
Three analytical dimensions help us to tell this story: legacy, contin-
gency, and agency. By legacy, we mean the long-nurtured institutional
S. Gruber · J.C. Orihuela (*) 


42 S. Gruber and J.C. Orihuela
regime in which the short history of the mining canon unfolds. We

underline two features of this legacy and its reproduction. On one hand,
the canon is but a new chapter of decentralization history in a resource-
dependent political economy. Elites and a wide range of social actors of
the country’s interior perceive an unfair political and economic system
that prioritizes Lima’s progress over interior development, especially
in the Andes and the Amazon (Contreras 2002, 2004; Barclay 2009;
Orihuela 2012). In Peru, a country of rich geography with natural
resource development, Lima is constructed as the national center thanks
to income from resource wealth outside the capital. On other hand, the
canon funds the reproduction of a weak state. The absence of a well-
entrenched “national project” has fed, for over two centuries, the repro-
duction of a weak republican state, widely seen as absent, incapable, and
corrupt (Basadre 2005; Cotler 1978; Quiroz 2008). The material and
subjective legacy of this state failure shapes the social construction of the
mining canon and new state action. As the chapters in this book dem-
onstrate, no significant state-making project emerged with the canon
windfall; instead, the focus was on spending the mining canon as fast as
possible on public building works and infrastructure (see in particular
Dargent and Chavez, and Orihuela and Paredes in this book).
Secondly, by contingency, we refer to historical events external to
the canon political process that contribute to the creation of “political
opportunity” for changing rules. Our analytical toolkit borrows con-
cepts from historical institutionalism and research on contentious poli-
tics (Collier and Collier 1991; McAdam et al. 1996; Tarrow 1998). The
historical events we consider are the “critical junctures” defined by the
1979 and 1993 Constitutions and Paniagua’s Transitional Government
of 2000 at the end of Fujimori’s regime, along with domestic political
processes and critical events of varied significance. Contingent processes
include the politics of resource nationalism in the 1970s, the deep eco-
nomic and political crisis of the 1980s, the dismantling of democracy
in the 1990s, and its restitution over the last 15 years. Critical events
encompass the 1973–1974 and 1979 oil crises, the catastrophic occur-
rence of El Niño climate anomaly in 1983, and the 1982 and late-1990s
international financial crises that damaged macroeconomic conditions
and reduced government expenditure in the interior.
Thirdly, in our reading of the canon’s history, while as legacy and
contingency set the context, agency has to be considered for a com-
plete analysis. Although it is very likely that agents will behave as
actors and follow the script set by domestic institutional history in path
2 DEEPLY ROOTED GRIEVANCE, VARYING MEANING: THE INSTITUTION … 43
dependence, or the one set by transnational networks and the interna-

tional institutional environment, agents always have some degree of free-
dom from social structure. Or they imagine so. These imaginings can
become a reality. Foucault, for example, in his genealogical inquiry on
the construction of governmentality, posits how all-pervasive material
and institutional constraints do not entail the disappearance of agency.
On the contrary, the complexity of state apparatuses allows for moments
of resistance and eventual institutional rearticulations enabled by the very
normative structures that frame agency (Foucault 2000). Similarly, agen-
tic approaches of new institutionalisms find that institutional entrepre-
neurs are willing and able to transform institutions by embedding their
agency (Campbell 2004).
Moreover, what we have found in our archival analysis is plenty of
imagination and agency. In particular, ideas and discursive exchanges in
Congress and the public sphere mattered a great deal. Thus, the case
of mining canon supports the conceptualization of institutional change
ultimately as a result of discourse and discursive exchanges (Schdmith
2008). For us, this contention on the importance of ideas and discourse
refines—rather than dismisses—the conceptual framework of new his-
torical institutionalism in the social sciences, on which we critically build
our argument (Streeck and Thelen 2005; Thelen and Mahoney 2010).
Within the structural features of Peru’s politics of decentralization, at
particular historical contingencies, institutional entrepreneurs proposed a
wide array of meanings to the label “canon,” which began as a legal term
for an obscure tax and became the banner-word for regionalism. From
a historical perspective, the mining canon is nothing but a “black box”
(Latour 1988) or an empty word (Laclau and Mouffe 1985): Its actual
meaning has changed over time, subject to the creativity of institutional
entrepreneurs (see the evolution of the term’s legal meaning in Annex 1).
This legacy, contingency, and agency perspective of institutional
change at work in this chapter draws on the previous work of Orihuela
(2013, 2014a). We find that neo-institutional economists could learn to
better conceptualize institutional change from historical and sociologi-
cal neo-institutionalisms, as well as from scholarship on contentious poli-
tics and political opportunity structures (Campbell 2004; Pierson 2004;
Greif 2006). The “rules of the game,” and their associated organiza-
tional ecology, are social constructs; their evolution, and the passions and
interests behind them, must be read with a historical perspective.
In Peru, the legacy of regional grievances and state failure has shaped
the making and remaking of the mining canon at the rhythm set by
contingent processes and sudden crises, with the creativity of accidental

heroes, decentralization avengers, and eccentric institutional entrepre-
neurs that make up the Peruvian polity. The remainder of this chapter
is organized in schematic periods. Section 1 depicts the “prehistory” of
the canon. Section 2 tells the story of the birth of the oil canon (1971–
1983), which opened the door for the mining canon. In a classic exam-
ple of how formal rules commonly mean very little in Peru, a first version
of the mining canon was passed but never enforced; Sect. 3 narrates this
story (1984–1993). Section 4 details the struggle in making the canon
return and its success in creating an enforced rule of the game (1994–
2014). Section 5 presents our conclusions. The appendix includes rele-
vant canon statistics and legal milestones of interest.
1 Notes for a History of the Canon’s Pre-history

Writing a proper history of the canon’s antecedents in Peru’s republi-
can history is a demanding enterprise that requires an extensive archival
work. However, we believe that our notes and findings not only allow for
a preliminary reading of the canon’s past, but also lead to some lines of
research for future archaeologies of legislation and public sphere debates.
The first task to be done toward a proper recollection of the canon’s
prehistory is to strictly define what exactly we mean by the term, that is,
to locate and describe the main features of the canon that differentiate it
from other types of taxes or decentralization policies. A common mistake
is to follow the past uses of the word in other laws. This is misleading,
because the majority of uses of “canon” in the past bear no relation to
the spirit of decentralization. That is why we contest one of the sources
that posits Simon Bolívar and his “patent contributions” (“contribuciones
de patentes”) (Chavez Oré 2004) as the first canon, and when another
(Klaver 2002) speculates with the “mining stamp” (“timbres de min-
ería”)2 of Leguía’s presidency (1919–1930).
Our intention is to propose a broad definition of canon and then to
collect laws and bills that share the canon’s key features in order to evalu-
ate the extent to which they are faithful to its spirit. Our broad defini-
tion proposes that the canon is a right (absolute or relative, temporary
or permanent) of the producing regions to what is considered a fair share
of benefits from the extraction of natural resources in their territories. It
has two key features: (1) The canon is a share of fiscal benefits (achieved
via levying tax on extractive companies directly or through redistributing
state income), and (2) this share is distributed in the region where
resources were extracted.
Applying these criteria, we can say that in some sense, the mining
stamps of President Leguía’s government had some relation to the devel-
oping of the canon, because it directed resources collected from min-
ing activities to specific mining delegations. Nonetheless, more research
is needed to determine whether these mining delegations had sufficient
autonomy from the state and whether they had roots in the mining
region. In contrast, Bolívar’s patent contribution was not close to the
notion of canon, as it was only a tax administered by the central govern-
ment on resource extraction.
Looking further back, we have found an 1845 bill3 that exemplifies
the canon structure fully; we consider this bill the oldest known precur-
sor of canon ideas. This bill was not passed as a law, but it is a sign that
more profound research in parliamentary archives can disclose a richer
prehistory of canon building, a much more robust legacy than previ-
ously believed. The 1845 bill proposed an “ice concession” (“estanco de
las nieves”) in Ayacucho: state control of the business of selling ice from
the Andean mountains, which had various uses.4 The bill earmarked the
concession’s profits to the building of a girls’ school in the same region.
The concession’s structure—state appropriation of a relevant resource—
was very popular at the time (Contreras 2012), especially in 1842 when
the state became involved in the guano business. But while the guano
monopoly did not share a canon structure, this “ice concession” did: It
was the region’s own resource and, more importantly, the benefits were
set to cover an expense specific to Ayacucho. However, the bill did not
pass precisely because of its new structure (El Comercio, 1845).
We argue that the canon has to be understood with a historical per-
spective, looking at the legacy of decentralization politics in particular.
Literature on decentralization history notes that the struggle against
centralism has been a constant theme since the conquest of Peru, while
support for decentralization projects has been cyclical (Contreras 2004).
The most important decentralization project of the Republican era fol-
lowed the war with Chile, between 1886 and 1895. Its main cause was
the state’s inability to collect taxes, rather than an ideological project
(though this was not absent and was particularly encouraged by mod-
ernizing political figures such as Manuel Gonzalez Prada and Andrés
Avelino Caceres). This was a time of fiscal decentralization, in which
these regions and municipalities became responsible for collecting
taxes in their districts with the purpose of covering their own expenses.
However, this only applied to direct taxes; the central government con-
tinued to administer trade tariffs and other indirect taxes, which were
considered more important (Contreras 2012).
Another key chapter in Peru’s decentralization history takes place in
the Amazon department of Loreto. Its border, always in dispute (with
Colombia and Ecuador), and its scant importance in the state’s eyes made
Loreto somewhat difficult to include in the national picture. The time
period between 1860 and 1895 was key to the region’s development.
This started with negotiations between the government and Amazon
elites on tariffs and exemptions, and ended with Loreto’s frustrated fed-
eralist project, the most radical decentralization effort in Peru’s history
(Barclay 2009). Although this project was short-lived, it constituted a
historical legacy that functioned as a background against which to evalu-
ate the nature of Loreto’s subsequent regional movement and regional
movements nationwide in general. We believe that this particular chapter
of national history, alongside regional frustration with the “fictitious pros-
perity” of the rubber boom (1880–1918), generated a legacy of region-
alist political culture. This culture shaped the emergence of the Defense
Front of the People of Loreto and their fight for the oil canon in the
1970s, as developed in the next section (Barclay and Santos 2002).
The legacy of the developmental state failure also matters for the
mining canon story. A developmental state failed to emerge in mid-
twentieth-century Peru. Following the trend of establishing develop-
ment corporations, the USA established the Tennessee Valley Authority
in 1933 and Chile created the national development corporation—
CORFO—in 1939. Additionally, President Prado Ugarteche created the
Peruvian Amazon Corporation in 1942 and Santa Valley Corporation in
1943. Santa, located in Ancash, was the most ambitious project, dream-
ing of producing energy and steel. However, the project was immediately
involved in corruption and patronage scandals. Peru switched to laissez-
faire policies under General Odría (1948–1956), but after his govern-
ment ended, regional development corporations multiplied, beginning
with the emblematic Corporation for the Reconstruction and Industrial
Development of Cusco in 1957 and Board for the Rehabilitation and
Development of Arequipa in 1958. By 1968, there were a total of 17
corporations, almost one per region. Given the international trend of
developmentalist policy ideology, earthquakes opened the window of
opportunity for corporations (Orihuela 2014b).
Board and corporation failure gave political ammunition for recentraliza-

tion processes under the Revolutionary Government of the Armed Forces
(1968–1989), especially in the first stage of General Velasco Alvarado
(1970) and the government of Fujimori (1990–2000). These two eras are
considered the two most radical periods of “structural reform” of the twen-
tieth century in Peru involving the recentralization of state affairs. While
Velasco’s government leaned toward the left, Fujimori’s leaned toward the
right. In 1980 and 2000, known as the two occasions when democracy was
resumed, decentralization played a central role. Nevertheless, the absence
of a developmental state legacy contributed to frame policy debates as the
elected ruler in Lima and those of the interior continued to struggle with
one another. There were no instituted autonomous bureaucratic structures
to carry out the job of fostering regional development.
2 1971–1983: From Nationalism to Regionalism

of Natural Resources
This period begins with Loreto’s regional social movement for an oil
canon. Despite the lack of primary sources that link the 1976 Legal
Decree to Loreto’s conflict, our reading of secondary sources tells us
that the political environment shaped by Loreto’s social movement was
decisive. Most remarkably, it meant that the word “canon” was intro-
duced in political discourse. Contingency mattered a great deal. The
nationalization of resources was revived in the sixties and seventies in
Latin America. For example, Peru’s historical rival Chile had started the
“chilenización” of copper under the government of Christian Democrat,
Eduardo Frei Montalva (1964–1970), which characterized the govern-
ments of Belaúnde and the Revolutionary Armed Forces (1963–1968
and 1968–1980) in Peru. Belaúnde’s slogan was “the conquest of Peru
by Peruvians.” However, an agreement with a USA company on oil con-
cessions in the Pacific continental shelf, with the eleventh page missing
from the contract (the stuff of novels), sparked the coup by the reform-
ist military led by Velasco. The (full or partial)nationalization of extrac-
tive industries (oil, mining, and fishmeal) came about in coming years
(Contreras and Cueto 1999; Barclay and Santos 2002). However, by
the late seventies, in public debate and grassroots politics, nationalist
discourse began to lose ground to a renovated regionalism of resources.
Natural resources belonged to the nation, according to Lima-based
rulers, but regional political elites and social forces contested that they
actually belonged to the producing regions.
2.1 Seizing Oil Income: The Loreto Regionalist Movement

To study the agency of Loreto, we consider the significance of both
contingency and agency. We understand the rise of the Defense Front
of the People of Loreto as part of the wave regional movements that
stretches from 1968 to the mid-1980s, and also as a part of Loreto’s spe-
cific regional history, outlined above. Loreto makes up an exceptional
case of regionalism. After the federalist project of elites in the late nine-
teenth century, the Great Depression and fall of rubber prices created
momentum for protest in the 1930s. Later, in 1968, given that Loreto
has a frontier rainforest economy based on commerce, a law reducing
tax exemptions produced massive and violent mobilizations (Rodríguez
1981).
In 1971, the discovery of new oil reserves by the state-owned com-
pany Petro-Perú reactivated regionalist mobilization in Loreto. Santos
and Barclay (2002: 409) quote businessman Joaquín Abensur who
declared that any future oil income had to be the property of Loreto
and its people. The regionalist discourse alluded to the rubber boom
as something that left little or nothing for the region compared with
what Lima seized, an idea that was more rhetorical than based on evi-
dence (Santos and Barclay 2002). Historical facts aside, the regional-
ist sentiment was strong and, by 1972, ideas emerged on how to seize
the oil income for Loreto. The term “canon” had reentered the public
sphere with the 1969 decreed fisheries canon (“canon pesquero”), which
increased the fiscal contributions of the industry to the state. An oil
canon for Loreto, however, would break the principle of fiscal centrali-
zation. The 1972–1975 oil boom in the region soothed the regionalist
impetus.
Later, the crisis became an opportunity. The “resource curse” for
Loreto meant that surges in oil prices damaged the local economy with
inflation. In addition, by 1975, the national economy was in crisis and
fiscal austerity measures were implemented. Regionalist mobilization
resumed in 1976–1980, constituting a precedent for pro-canon regional-
ist mobilization elsewhere in the country (Henríquez 1986).5 In 1976, a
series of spontaneous and disorganized pro-canon protests ended in repres-
sion and political crisis. The government developed the oil canon law: 10%
of production value would be returned to the department of Loreto for 10

years, to be transferred by state-owned Petro-Perú (see Annex 1).
Why did an autocratic government pass a “rule of the game” that
constrained its finances? The repression of discontent in a context of
economic turmoil was not seen as a sustainable option. However, there
was more to this than pragmatism in facing mobilization. The law has
been read as part of a sustained military effort to gain social support and
political allies in the country’s interior (Henríquez 1986: 165). Barclay
and Santos (2002: 411) highlight the importance of Loreto’s Chamber
of Commerce lobby with the military government as a prominent cause.
Yet, law enforcement so often is an issue in the Peruvian state, and
this time was no exception. It took another year for the law to be prop-
erly regulated and another 2 years for the first transfer to occur, which
was “much less than the promised 10%” (Barclay and Santos 2002: 410).
The delay was due to passive resistance of top government officials to
implementing the law, thinking it could become the beginning of the
end to fiscal centralism and Petro-Perú’s bad financial situation (Barclay
and Santos 2002; Glave and Kuramoto 2014).
For one reason or another, the delay generated a new and better-
organized popular movement. In 1978, the Defense Front of the People
of Loreto (Frente de Defensa del Pueblo de Loreto, FDPL) was born. Its
First Popular Assembly was massive, with 143 delegations, which included
one of the Chambers of Commerce. With the vote of the people, a trade
unionist won the leadership of FDPL, signaling the primacy of the left
in the regionalist movement. The canon was now one item of a long list
of demands for regional development (Rodríguez 1981). In addition,
toward the end of his government, General Morales Bermúdez began to
pay part of the canon debt to Loreto and Ucayali. Even in 1980, a gold
canon was legislated for the department of Madre de Dios (DL 22916),
although the law’s text did not phrase it as a “canon” explicitly.6 This
time, the percentage was established at 3% of gold production.
2.2 The 1979 Constitution and Return to Democracy

The national political process fed on the regionalist one and vice versa.
The 1977 National Strike had weakened the central government, which
ended up calling a Constitutional Assembly in 1978. The first parlia-
ment, after a decade of dictatorship, was already operating when a
one-day strike took place in Loreto. Declarations of solidarity with the
strike and calls for canon payment came from parliamentarians across the
political spectrum.
A cleft developed between centrist and left-wing views about the
canon, in Lima as much as in Loreto. In parliament, Héctor Vargas Haya
(from the APRA party) supported the struggle for the canon, but criti-
cized the events of violence. The left’s most radical members wanted the
FDPL to administer the canon. A Second Popular Assembly in Iquitos
called Loreto-elected parliamentarians “traitors to the cause,” thus align-
ing with the maximalist program of the left-wing. After this protest esca-
lated, representatives of economic elites abandoned the organization
(Barclay and Santos 2002).
This process shaped the 1979 Constitution. The second chapter of
Part III, “Economic Regime,” is entitled “On Natural Resources.”
Composed of six articles, one declares that it is the state’s goal to pro-
mote Amazonian development (Art. 120). Another declares that “it cor-
responds to the zones where natural resources are located, an adequate
participation of the resulting rent, in harmony with a decentralizing pol-
icy” (Art. 121). Thus, “canon” as a name did not enter the Constitution,
but it did so in spirit.
Agency of institutional entrepreneurs further translated the meaning
of canon. Loreto’s struggle had a viral effect on the rest of the country.
According to Henríquez (1986), eleven pro-canon mobilizations took
place in six departments between 1978 and 1984.7 Moreover, pro-canon
sentiment spread thanks to changes in political discourse. Lawmakers
brought their own examples into a discussion of the paradox of the
beggar on a golden stool, appropriating the mythological phrase used
by nineteenth-century naturalist Antonio Raimondi to describe Peru:
The wealthiest provinces in resources are nonetheless the poorest.8 The
nationalist rhetoric of resources used by Velasco’s regime, the radical first
stage of military dictatorship (1968–1975), was now translated to defend
a regionalism of resources. In Velasco’s discourse, foreign capital looted
resource-rich Peru (Velasco Alvarado 1970). In regional elite discourse,
national resource wealth benefitted Lima but not provinces where the
resources lay and where poverty ruled.
Chapter 121 of the 1979 Constitution was drafted, as laws com-
monly are, in such a way as to leave space for interpretation and
somehow make everyone happy. Celso Sotomarino, a key member of
the Commission for Natural Resources of the Constituent Assembly
that drafted this chapter, recalled the indecision when defining canon
payment.9 The task was not easy, given that defining percentage of
adequate participation involves issues such as state budget stability.
Deciding whether the base will be a new direct tax to companies or a
percentage of the already existing income tax was even more compli-
cated. This topic permeated discussion until 2001 and only subsided
with the boom in commodity prices, making income tax-based canon
worth a great deal.
With the end of military rule and return of democracy, the most pop-
ular presidential candidate Belaúnde said that if he were elected to office,
he would pay all the canon debts (Barclay and Santos 2002). The pen-
dulum was moving back toward decentralization. This generated excite-
ment in the Loreto electorate, which gave him 66% of the vote. In turn,
this changed the power equilibrium within the FDPL in favor of com-
mercial elites over the left-wing. The Chamber of Commerce of Loreto
then went on to direct the front and negotiated with the government
over the oil canon (Barclay and Santos 2002). In 1981, a government
decree (177–81 EPC) established that the canon would be 10% of the
net value of extracted resources (the cost incurred by operations being
deductible). This caused a major upset and reactivated the Loreto pro-
test movement demanding payment of “the true canon” (Rumrill 1982).
After a tug of war with Ecuador, in 1982 the government relented and
issued a Canon Act that stabilized the right to a 10% ad valorem resource
until depletion, along with a statement regarding the inviolability and
ownership of the canon to Loreto and Ucayali (the department of
Loreto had been split in two). After this concession, the power of FDPL
declined, although it became a mythical figure in the imagination of the
people of Loreto.
However, the saga of the oil canon did not end there, since due to
Article 121 of the Constitution it should be given to other oil-producing
regions, such as Tumbes and Piura. One more time, the written law itself
did not amount to its actual enforcement. The occurrence of El Niño
in 1983 created a political opportunity for canon struggle, Loreto style
(Henríquez 1986).10 Thus, Law No. 23630, which gave oil canon to
Piura and Tumbes, was decreed in 1983. In the law, the canon was not
defined as a share of income tax, but rather a share of oil industry profit.
The percentage was the same as in Loreto’s canon and both were raised
to 12.5% the following year.
3 1984–1993: More Lawmaking, Few Rents,

and New Policy Ideology
This period in our chronology can be summarized as a decade of increas-

ing legal developments with little law enforcement. The contingency of
external shocks matter a great deal during this period. Experiencing a
decade of crisis, the economy was hit by the 1982 debt crisis and the
1983 El Niño, and aggravated by García’s inflationary populist experi-
ment (1985–1990), national government authorities were unwilling to
make effective canon legislation primarily because there was little canon
income to share. The Fujimori regime (1990–2000) that followed
stabilized and opened the economy, privatized state-owned oil and
mining enterprises and, with commodity prices rising after the “lost dec-
ade,” witnessed an inflow of foreign capital into extractives (Glave and
Kuramoto 2003). However, tax breaks for courted multinationals and
centralization needs of the autocratic regime reduced the chances for
canon enforcement.
In fact, Fujimori’s centralism can be explained by García’s regionalism
failure (1985–1990). Having taken up the banners of decentralization
during his presidential campaign, García’s administration implemented a
decentralization process that grouped old departments into new regions
(12 in total). The mix of economic crisis and prominent cases of corrup-
tion—a term associated with the regime in general—delegitimized the
initiative. It was easy for Fujimori to recentralize. The old specter of the
barbaric provinces that should not have autonomy, particularly money in
hand (for they would spend it in the wrong way), was revived (Contreras
2002).
3.1 The First Law on Canon

After the oil canon laws, the next legal milestone was Law 24300
of 1985,11 which specified that the Constitution’s Art. 121 defined
“income” as the total amount of taxes derived from the exploitation of
natural resources, instead of the ad valorem tax on the production of
the oil canon; however, income was also not limited only to income tax.
This definition was to be applied to any future canon. Law 24300 was
the result of a long debate that started in the previous Congress. About
20 bills on different natural resources and in different regions were pro-
posed from 1980 to 1985. Bills passed through three parliamentary
commissions (Constitution, Economy, and Energy and Mines) and the

Executive before reaching at the Senate for the first time in May 1984.
The debate regarding “adequate participation” referred to in Article 121
centered on how to determine whether “income” was exhaustive. At the
end, it was established that no less than 20% of the income was to return
to the producing regions. The Executive would define the percentage of
participation for each resource.
The translation of the “black box” canon again took place. Legislators
applied Article 121 of the 1979 Constitution in a number of ways.
Interpretations of what “canon” and “income” meant differed widely,
reflecting ideology and persuasion skills. In the presentation of the arti-
cle’s first version, defended by Congressman Núñez Mendoza (chair of
the Mining Commission), it was proposed that the Constitution referred
to a redistribution of income, rather than to a new tax. The argument
was based on an interpretation of the last part of Article 121, where it
was phrased that the article shall be enforced “according to a decentral-
izing policy.” The idea distilled from Senate debates, where Luis Alberto
Sánchez—a historical leader of the once revolutionary APRA party—
and others postulated the difference between “income” and “canon,” in
which “canon” was a new tax and “income” only a share of an already
constituted state income. However, this position was combined in the
first draft with a definition of income as a share of profits, as was done in
the case of the oil canon.
The bill’s second version presented an ambiguous formula that tried
to please both positions, those who thought it necessary to give a share
of the value of production and those who did not want a double taxa-
tion for companies. This formula determined the canon as “no less than
2%” of production, but stipulated that the payment should be done with
collected taxes. This formula generated complaints from several congres-
sional representatives; Rafael Vega García (from the conservative party,
PPC), for instance, requested more clarity in defining the law only as a
share of income already received by the state, and definitely not as a tax.
The final version was reached after many delays and a heated debate. For
the first time, it clearly established the definition of the canon as a share of
all incomes received by the state as a result of mining activity. However,
some ambiguity remained in the law, because it did not affect the existing
oil canon and gold canon, which maintained their particularities and were
determined according to another base. This situation provoked a reveal-
ing discussion where delegates from regions without a canon (Moquegua,
Junín, etc.) clashed with those that already had one and defended its speci-
ficity (Loreto, Piura, etc.). It was with these measures that the debate
became more heated, and although there was no consensus, the defense
of previous canons triumphed on the principle that nobody was losing any-
thing.
In sum, the 1985 Law defined concepts key to the current canon
structure; however, it did not have much real impact, because the law
was not enforced and no new canons were established until 1996 with
the mining canon. The economic crisis of the late eighties and a subse-
quent failure of regionalization toward the end of García’s government
put a halt to regionalist dreams. Nevertheless, the legal basis for future
canon legislation had already been settled.
3.2 The New Policy Context of Structural Adjustment

The contingent nature of political institutions became, yet again, dra-
matically evident. In the 1990s, the politics of decentralization were
radically reshaped by the politics of structural adjustment. The “inter-
ventionist state” of Velasco and García was to be demolished. Economic
crisis and political chaos were such, with hyperinflation and the Shining
Path targeting Lima, that outsider Fujimori found himself in front of an
enormous window of opportunity for policy and institutional change. He
made it to the office, switched from promising there would be no struc-
tural adjustment to carrying one out, and closed Congress in 1992. The
Shining Path leader also ended up captured and political violence began
its demise. Fujimori became so popular that neoliberal reforms could be
carried out without major opposition. In 1993, at the peak of his pop-
ularity, a new Congress was voted in, which gave him majority; social
mobilization, in turn, was repressed in the name of pacification. This
was not a good time to mobilize for the canon (but northern Tumbes
and Piura did so and ended up succeeding, as explained below). Also,
Fujimori was delivering infrastructure and technocratic social programs.
It was in such a new transformative policy context that canon rules
of the game were once more “clarified,” but this time in a more mean-
ingful way, within a policy ideology aiming to promote foreign private
investment in mining and oil. The 1992 General Mining Law, joined
to Decree 708, a fundamental regulation for sector liberalization, once
again translated the 1979 Constitution’s Article 121. By “the resulting
income,” it referred exclusively to a percentage of income taxes paid by
mining companies. More specifically, the mining canon was established as

20% of income tax, the floor level that the 1985 Law set.
The evolution of what canon means, in discourse as much as in law,
shows that the mining canon—and fiscal decentralization in wider
terms—and the fostering of private investment were not opposite policy
goals. Instead, one political project shaped the construction of the other.
The record shows that canon goals became functional to private invest-
ment goals. Between 1985 and 1994, the meaning of the canon changed,
from being close to a royalty on mineral production at the period’s begin-
ning to being legally defined as a percentage of income tax by its end. We
speculate that economic forces favored the arrangement: They reduced
the possibility of new contributions while minimizing the feasibility of a
return to mobilized regional discontent of previous decades.
3.3 Peruvian Neoliberalism Meets Canon: The 1993 Constitution

The legislators did not want the Constitution of a new economic regime
to reproduce the previous old “statist” model. Indeed, our review of
archives suggests that Article 121 of the 1979 Constitution was not
going to survive; it did, however, becoming Article 77 of the 1993
Constitution. In fact, this time, the Constitution’s text actually used
the term “canon.” As a sign in the change of policy paradigms, how-
ever, the Article migrated from a Natural Resources Title (in the old
Constitution) to a Budget Title (in the new one), emphasizing a redis-
tributive character rather than developmentalist one.
Although almost all of the parliamentary debates that we have looked
into tended to be in favor of the canon and decentralization, legislators
also sought to characterize the canon from the perspective of their par-
ticular political interests. On the one hand, the interest of official legisla-
tors of the Right (Renovación and PPC parties) was to clarify that the
canon was not a tax or royalty, and to make the central state a mediator
in the financial transfer from mines to the producing regions. Obviously
influenced by a political climate of confrontation, the Constituent
Congress legislators of the opposition used the canon as a political
weapon. Their main complaint was that the 1993 Constitution distorted
the canon, undoing decentralization by subjecting it to the interests of
foreign capital.
One way or another, it is easy to understand how the canon can
change from being a demand that can successfully mobilize regions
against extractive capital and the state, which came to be seen as a “loot-
ing” of the region’s resources, to being allied to the extractive indus-
try’s interests. Establishing the canon as being nothing but a matter of
state resource distribution neutralizes the use of the canon legislation as
a weapon for demanding more tax contribution from the industry. This
cancels the possible articulation of regional demand for a more radical
redistribution, with wider exigencies of new relations between foreign
capital, the state, and labor, which was the spirit of Loreto’s regional
movement when driven by the left-wing.12 In this sense, the 1993 trans-
lation of the original canon idea was clearly under a neoliberal hegem-
ony that halted regional demands, while at the same time pleased foreign
investors by decoupling the canon from further taxes.
4 1994–2014: Back to Canon Struggle, New Policy

Turn, and Unforeseen Supercycle Prices
The last period of this story is the new mining inflow. Under Fujimori, a
vast program of privatization took place, which included the mining sec-
tor, partially nationalized in the 1970s, and oil sector, fully nationalized
in the 1970s. Moreover, to further guarantee that the era of resource
nationalism was over, the new legal environment offered tax stability
contracts and tax breaks (Legislative Decree 708 and the General Law
of Mining of 1992s new version). With the domestic economy stabi-
lized, privatized, and deregulated, and a new international environment
post-Lost Decade, foreign capital made its way into extractive industries.
The canon, accordingly, increased dramatically, but not immediately:
Investment periods are relatively long before mining production starts.
Companies were given tax breaks, and most importantly, the dramatic
surge of commodity prices took a decade, after the late-1990s financial
crises. Privatization, new mining, and the commodity supercycle gave a
new context to canon politics.
4.1 Piura and Tumbes Mobilized, Constitution Amended

In 1994, an interesting regional movement took off again, this time
from the north, a territory typically ruled by the APRA. The move-
ment’s central demand was a defense of canon money that Piura and
Tumbes received since 1983. The oil canon was under attack because its
new definition as a percentage of income tax in the 1993 Constitution

reduced the income of Piura and Tumbes. In addition, the project to
privatize Petro-Perú and the government’s discourse that privatization
would bring more investment and therefore more canon was strongly
rejected by various local actors. The oil canon (the only existing canon at
the time) was paid by state-owned Petro-Perú; the fear was that privati-
zation would effectively terminate the canon.
The regional movement is still to be studied for a full account, but in
newspaper reports (El Comercio and La República), we observe that pro-
tests and strikes were organized in order to collect signatures for legal ini-
tiatives (a procedure admitted under the new Constitution). The National
Elections Board (Jurado Nacional de Elecciones) stated that they were
unable to verify the validity of all signatures, which prompted a demon-
stration from Piura to Lima by almost all the region’s mayors. Grassroots
pressure caused Fujimori’s party to accept a debate in Congress on the
canon issue in October 1994; Fujimori’s congressional representatives
proposed a bill to resolve the issue. This was a clear move toward appro-
priating and neutralizing the movement’s power. The debate was a sce-
nario for the opposition’s accusations, which claimed that the canon was
being dismantled, and for the ruling party to state its defense.
In his opening remarks introducing the bill, Congressman Torres y
Torres Lara—from the ruling party—mentioned that it reflected the peo-
ple’s will, even though the mayor of the Grau Region’s legal initiative
failed to make it to Congress. Torres y Torres Lara’s bill proposed, as a
solution, that canon money should be fixed at “no less than what it was in
1994” and that if the amount collected in income taxes was lower, the state
should pay back the difference. He wanted this patchy solution to pass in
order to avoid a more radical constitutional amendment, but failed. This is
how the Constitution’s chapter about the canon changed the canon’s base
from income tax to total fiscal income and rents. The ruling party did not
give up its opposition to direct contribution by extractive companies, how-
ever, which could have led to a slippage in their revenue and legal security.
The criticisms made by the opposition were especially ironic.
Congressional representatives Pease, Olivera, and Cáceres Velásquez13
commented on the “miraculous” nature of the change of opinion on this
matter by the ruling party, precisely in an election year. This went along
with broader criticisms to Article 77. In this long debate, a chorus of
voices appeared with various proposals for reform, some of which were
radical, calling for 50% of canon, and others more restrained. A sector
of the right (PPC and Renovación) emphasized the need to promote
investment and not use the canon as a “blind production tax,” which was
one of the possible interpretations of the unclear constitutional term of
“income.” Within this line of argument, the way to increase the canon
was by promoting more investment.
A growing consensus was to require giving the canon to regions that
did not have one, or at least the establishment of a general framework for
canon legislation. At this point of the story, an issue was settled that has
now become very contentious in other Latin American contexts (Bolivia
and Brazil): An agreement was reached to limit canon transfers solely to
the producing regions. Due to its particular origin (oil canon ad hoc law),
it had always seemed clear that the canon would be transferred to the pro-
ducing regions, but in the scenario of a more general law, some began to
argue in favor of an extended distribution of canon resources. Curiously,
the idea to extend the distribution of canon income came from a conserva-
tive politician (Chirinos Soto) who wielded the argument that all Peruvians
had equal rights to state resources. This argument was seen by some con-
gressmen as a trick that aimed to eliminate the canon absolutely, so they
argued that the canon was limited to the region as a compensation for the
imbalances brought on by the presence of mining or oil industries (eco-
nomically and environmentally). Regional leader and early environmental
activist, Julio Díaz Palacios was one of those congressmen. At the end of
the debate, the protection of the canon was deemed a priority, and a prag-
matic argument, which contended that maintaining the canon only for the
producing regions did not imply losses for non-canon regions, prevailed.14
In congressional debates, parliamentarians rehearsed several argu-
ments, definitions, and fears that illustrated the ideologies and interests
that tested the bid for the canon. The lesson provided by these debates
is very simple: The canon is indisputable. Every member of Congress
would celebrate it, given that voters praised political forces in the strug-
gle for it; yet, each parliamentarian wielded a different discourse around
the word, trying to appropriate it and fill it with meaning and features
responding to their particular ideologies and interests.
4.2 The 2001 Mining Canon Act

Contingency was key once again, this time with the late-1990s financial
crisis that shrunk fiscal revenue and Paniagua’s 2000–2001 transitional
government, who was from Cusco and a decentralist. There had been no
political will in the second period of Fujimori to rule a canon Framework

Law as claimed in the 1994 debate on constitutional reform outlined
above. It was during the 1-year transitional government of Valentin
Paniagua, with a Congress of the old ruling party in the minority and
strong alliance of provincial congressmen discontent with centralization
and the scarcity of fiscal resources that the adoption of the law happened,
a few weeks before finishing the brief presidential mandate. The fall of
Fujimori’s regime left congressmen without a clear political direction,
making regional identification a pole of attraction. Also, opposition lead-
ers who previously defended the canon gained more strength and pres-
tige, while defenders of the decade-long ruling party disappeared from
the scene. The always vociferous Fujimori supporter Congresswoman
Chávez this time was quiet: “(we) have to do much self-criticism and
reflection.”15
The new law’s main feature, which forms the legal cornerstone of the
current canon, was the increment of percentage from 20% of income
tax to 50% of total fiscal revenue produced by extractives. The fiscal
effects of the Russian Crisis have much to explain about this increase.
The chair of the Energy and Mining Commission, Rómulo Mucho,
justified that a better definition of “appropriate participation” was a
fifty-fifty distribution between the central government and producing
regions. In accordance with the canon applied to the totality of taxes
and contributions, not only of income tax, the law established that
canon money should be unaffected by tax deduction or benefits, which
the next government would amend in the name of private investment.16
The new Framework Law not only regulated the already existing min-
ing canon, but also created a canon scheme for gas, forestry, and fisher-
ies. Previous regulations for the oil canon were left untouched.
The analysis of projects, proposals, and interventions of lawmakers in
the debate gives us a concise summary of three decades of canon politics.
The minority opinion, advocated by Fujimori party’s Congressman Lam,
was against the high percentage of 50 as there was the risk of creating
fiscal imbalances in the state and among regions,17 repeating the classic
fiscal conservative argument rehearsed in past debates. Another classic
debate revived was the controversy over whether the canon was a new
tax on production or a redistributive mechanism of fiscal income already
collected. There was also harsh criticism toward Fujimori’s politics to
favor private companies. For example, Congressman Cuaresma from
Cusco denounced: “everybody talks about canon that really represent in
disguise the interests of companies.”
The most picturesque speech in the redistributive struggle was that

of Congressman Ríos, who represents the new politics of mining devel-
opment in Peru. A former mayor of Huaraz, known for several “sacri-
fice marches” from Huaraz to Lima, which included chaining himself to
the gates of parliament and walking carrying a cross over his shoulders
in Lima, he demanded more mining royalties for Ancash. Being his first
(and last) intervention in 2000–2001 plenary, given he vowed not to
speak if not to defend the canon, he claimed “suppliantly,” “humbly,”
and “as a Christian” for the passing of the Canon Act bill. Full of reli-
gious references, his speech was also characterized by a strong criticism
of the Ancash mining companies, whom he accused of theft (through
concealment of profits and tax benefits laws) and discriminating against
the native people. Against these evils, the canon appeared in his discourse
as a redemption that solved all conflicts. His alleged Christianity did
not stop him from receiving a bribe of Fujimori’s strongman Vladimiro
Montesinos to move to Fujimori’s party, a bribe captured in the noto-
rious videos (“vladivideos”). More recently, Ríos was self-proclaimed as
“the father of the canon” and offered to transfer S/. 500 of canon to
every resident in Ancash. Ríos became governor of Ancash in the 2014
regional election, an excellent demonstration of how the word “canon”
was invested with meanings that go way beyond its original scope.
In summary, the 2001 law ended up being more ambitious than the
previous canon arrangement, brought by the constitutional reform of
1994. We can place it between the maximalist figure of an ad valorem tax
following the oil canon’s shape in 1976 and the minimalist canon of the
1993 Constitution’s first version, which limited the canon to a small share
of mining income tax. On the one hand, it ruled the highest percentage of
canon share ever seen (50%), but on the other, it finally closed the debate
on the issue of “taxes and contributions,” restricting them to fiscal income
already collected by the state, not an additional tax. And yet, this chapter
by no means constitutes the end of canon history: A myriad of reform
proposals followed the next decade, and many of them created new legal
developments regarding the fifty-fifty split (Barrantes et al. 2010). The
2001 law’s legacy is that for over a decade, it framed the canon debate as
“how to divide the 50% that rightly belongs to producing regions.”
4.3 Unforeseen Prices, Canon Boom

The price surge buried much of regional political elites’ discontent.
Budgets in regional governments such as Ancash grew 810% between
2003 and 2007. However, it was not long before new discontent
emerged. With prices coming up, left-wing and nationalist voices asked
for a special tax or introduction of royalty, as in Chile. The 2006 junc-
ture was particularly important, when then-nationalist radical Ollanta
Humala lost the presidential race to populist Alan García. Converted to
neoliberalism, and this time enjoying a global boom instead of financial
downturn, García managed to make Congress pass a “voluntary contri-
bution” scheme to be spent by the companies themselves, since the state
was characterized as slow and inefficient. In the neoconservative rhetoric
of García, the legacy of weak state capacity was used to justify a decision
to not expand its role, given the new international economy context.
Thus, the supercycle configured a new arena, a politics of abun-
dance, and it was not all good news. In particular, prices skyrocketed but
were also volatile. When price volatility drives canon transfers down, it
was not the global economy but the Ministry of Economy and Finance
(MEF) who received the blame of mayors and governors. Legacy was
key. It was of little help that the MEF had established a new National
System of Public Investment (Sistema Nacional de Inversión Pública,
SNIP) in the late-1990s. SNIP was designed in times of scarcity and
was biased to favor the funding of infrastructure, given the absence of
well-working developmental state structures (Orihuela 2014b). The old
rivalry between the interior and Lima for fiscal autonomy produced a
new chapter of bitterness.
More instability in canon transfers was due to constant changes in
the distribution index with successive laws.18 Changes in the distribu-
tion index were, sometimes, much needed corrections to previous mis-
takes in the law’s drafting. The most scandalous example of this was
when Miraflores and San Isidro, high-income districts of the capital
Lima, received more money than Oyón, a poor mining site. The rush
at the time of Canon Act drafting in 2001 mainly caused these prob-
lems. Successive corrections solved the problem by focusing canon
rules more according to poverty index and mine proximity, than by
the population alone. Nevertheless, the correction of distribution
nonsense was not the sole principle for law modifications; petty poli-
tics of regional leaders whose political careers hinged mainly in obtain-
ing more canon share for their constituencies were also important
(Barrantes et al. 2010).
If the old mining conflict depicted in this chapter had been about
how to divide the rents between Lima and the producing regions,
the new mining conflict is about (i) dividing the big share received by
the producing regions within the regions and (ii) local communities
opposing the entry of new mining (see Paredes and de la Puente in this
book). Regarding this second form of conflict, the government’s domi-
nant discourse, business leadership, and the national press show that dis-
content with mining is the result of regional and municipal government
“inefficiency” in spending canon money. This inefficiency is understood
as the inability to spend the entire allocated budget that, as seen, had
grown outrageously. If only the canon were well spent, communities
would be welcoming mining companies, the argument goes. The signs
of global downturn and strengthening of local opposition to new mega
projects (Conga in the north and Tía María in the south) show that min-
ing will not be growing as fast as during the previous decade. A politics
of scarcity will shape canon developments over the next few years.
5 Conclusions
The canon is a central feature of the political economy of resource-based
development in Peru. The rule of the game is the historical result of
struggles between political-economic forces clashing on whether to favor
fiscal centralization in Lima or fiscal autonomy of the producing regions.
It is more than a law. The canon embodies the deep-rooted grievances of
state absence and inequality between Lima and the interior. Yet, despite
being a response to a structural feature, the specific meaning of the
canon has evolved over the years.
Given the legacy of historical grievance between Lima and the inte-
rior, external economic conditions created different contingencies, or
political opportunity structures, for canon developments: the oil and
energy crisis of the 1970s, the debt crisis in the early 1980s, the financial
crises in the late 1990s, and the supercycle that came last and just ended.
Domestic political processes also defined contingency. The governments
of the Armed Forces in the 1970s and Fujimori in the 1990s were cen-
tral for the birth of the canon and for its definition as a redistributive
scheme of already existing taxes and contributions, respectively.
The legacy of a weak state, joined to the bitter relationship between
Lima and the interior, with no legitimate developmental state struc-
tures, shaped the thinking of the canon as a resource for paving roads
and building local infrastructure. Local economic development spurred
by the canon focuses on asphalt and cement-based initiatives.
Legacy and contingency define the context in which agency is embed-

ded. The very same structural feature of a quarrel between Lima and the
interior has given place to various definitions of the canon. Over time,
the institution of the canon has evolved through discourse. The role of
ideas is key: Canon thinking was shaped by resource nationalism in the
1970s and by neoliberalism in the 1990s.
Persuasion and deliberation played important roles at different
legal debates of the last three decades. Political entrepreneurs, such as
the current Ancash Governor Waldo Ríos, aim to reinvent the canon
and reinvent themselves as the canon’s true fathers: Canon insti-
tuted rent-seeking and corruption. In turn, mining interests found in
the canon—defined as a redistribution of already existing taxes—an
instrument for their corporative goals: tax stability and more govern-
ment expenditure in mining localities that more and more opposed
new mining ventures. The meaning of “canon” changed over the
years, mobilization after mobilization, law after law, and debate after
debate.
Notes
1. Law No. 27506, Mining canon Framework Law.
2. This was in reference to Legal Decrees 4642 and 4928.
3. We thank Rafael Tapia for this finding. It will also be included in a forth-
coming book on the interventions of Juan Bustamante, an important
figure in Peruvian regionalism and liberalism in his role as Deputy. This
book will be published by the Congress of Peru Press.
4. Medical, mostly. It was also an important economic activity for the zone’s
indigenous people.
5. See note 9.
6. Legal discourse was the same used for Loreto’s canon, which emphasized
the region’s poverty and isolation in contrast to the remarkable wealth it
brought, and was to bring to the whole country. The formula was once
again the ad valorem tax, applied this time to the price of gold, which the
Banco Minero acquired from Madre de Dios miners.
7. Loreto (4), Ucayali (1), Tacna (2), Ilo (2), Huancavelica (1) y Pasco (1).
Out of these movements, we are especially interested in the movement
in Ilo (Balvín 1995), because it is one of the first with an environmental
demand in its defense of water resources. The environmental demand was
already present in constitutional debates, but its link with the canon did
not come until later.
8. See Diario de Debates de la Comisión de la Asamblea Constituyente de

1978–1979.
9. See Diario de Debates del Congreso Democrático Constituyente, Ley 26390.
10. The author compares this to the case of Puno, in which natural disasters
also generated a regional movement. However, the characteristics of each
case are different, Puno consisting of more worker- and sector-related
demands.
11. See drafts of El Diario de Debates de la Cámara de Senadores y de
Diputados de 1984, Ley 24430.
12. This idea of the political importance behind articulating varied demands is
based on Laclau and Mouffe’s analysis of the construction of hegemony
and possibilities for its subversion (1985).
13. Olivera and Cáceres Velásquez were two of the many passionate defend-
ers of the canon that later fell from grace with the public opinion due to
corruption problems. The case of Cáceres Velásquez is emblematic. After
being elected by an opposition party in 2000, he was paid by Vladimiro
Montesinos, Fujimori’s shadowy advisor, to support the ruling party.
14. See Diario de los Debates de la Comisión de Reforma de la Constitución.
Congreso Constituyente Democrático. 1994.
15. See Diario de Debates del Congreso de la República 2000–2001, Ley 27506.
16. See Decreto de Urgencia 2002–01 in Annex 1, Table A1.1.
17. However, he stated in his minority report that a yearly increase to a total
of 50% could be considered.
18. See Annex 1, Table A1.2.
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Perú. He has participated in research projects focusing on issues of inequal-
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a teaching assistant and as Editorial Assistant of the Economía journal at the same
university.

various edited volumes. He received a PhD from Columbia University, New York.
CHAPTER 3
Extracting to Educate? The Commodities

Boom, State Construction, and State
Universities
Eduardo Dargent Bocanegra and Noelia Chávez Ángeles
1 Introduction
Law No. 28077 of the year 2003 made many amendments to the canon
legislation (Law No. 27506 of 2001), a law that determines the distri-
bution of resources originating from extractive activities (earnings from
mining, gas, wood, oil, among others) in productive regions. One of
these amendments was that 5% of the total regional canon should go to
state universities to be invested in “scientific and technological research
that fosters regional growth.” Inspired by the oil canon, which since the
1970s has provided a similar percentage to higher education institutions
in four regions for research and other purposes, the law intended to pro-
mote useful knowledge for local development. Exponential growth in
mineral prices a year later gave way to benefiting state universities receiv-
ing what is currently valued at three billion soles (currently about one
billion of USD) in resources.
E. Dargent Bocanegra (*) · N. Chávez Ángeles 


70 E. DARGENT BOCANEGRA AND N. CHÁVEZ ÁNGELES
Ten years after these monetary transfers, it is evident that the desired
impact was not achieved. As demonstrated by research and evaluation
reports of the law (Portocarrero et al. 2013; INNOVA PUCP 2012;
Comisión de Ciencia y Tecnología (CCTI) 2013; Garfias 2011) and
this article, significant improvements in research, and in general regard-
ing state university quality, are not observed. Upon facing the inability
of state universities to spend resources on research, since the year 2006,
Congress permitted resources to be used for infrastructure. A good part
of transferred amounts are left untouched in bank accounts, and funds
used are usually spent primarily on infrastructure. If everything contin-
ues as now, the primary material boom will end and Peruvian universities
will maintain their low academic and administrative levels; the resource
shock will have helped in renovating infrastructure, but not in substan-
tially strengthening institutions.
What explains why the law has not had its desired impact? If respond-
ing to a high increase of resources is difficult even for the most com-
petent organizations, then the in-depth answer expands past adaption
to abundance. As this article reveals, there is no observation of a com-
prehensive effort to adapt to resource increases for use in research.
According to interviews with administrators and reform actors, a revision
of legislative processes, previous reports about the topic, and fieldwork
in two universities (San Agustín State University in Arequipa—UNSA—
and San Antonio Abad State University in Cuzco) that receive numerous
canon funds, this article argues that institutional characteristics and lega-
cies involved in the passing and implementation of the law explain the
current deficient result.
We point to three factors to understand this outcome. First, weak
national and regional political actors. As mentioned, this new extrac-
tive cycle was developed in an extremely weak institutional political con-
text, which was inherited from the 1990s (Tanaka and Grompone 2009;
Vergara 2014). This institutional weakness was seen, on the one hand, at
the national level in Congress, which was not useful to help the discus-
sion over research canon viability, and even less to direct and strengthen
the institution once approved. On the contrary, Congress and national
political parties avoided their functions. On the local level, the crisis of
national parties generated a pulverization of local parties; this, along
with the absence of local elites, explains why there are no actors that
could have taken advantage of or pressured for a better use of distribu-
tive resources from the research canon. Second, weak and clientelist
3 EXTRACTING TO EDUCATE? THE COMMODITIES BOOM … 71
state universities. The research canon arrived in a moment of deterio-

ration and weakening of universities, resulting from the politicization
of the 1970s, political violence that followed in the 1980s and 1990s,
and neoliberal policy that ended up deregulating and removing funds
from state universities, and more so opened the path to a higher edu-
cation system based on profit and deregulation. Finally, a strong MEF
limited irresponsible expenditure but did not create institutions to facili-
tate expenditure. Because there were no clear legal framework for the
execution of the canon for universities, the mistrust of the MEF of pub-
lic spending, and fear that the money would be used for salaries instead
of research, the MEF preferred to put controls on university spend-
ing. These included the prohibition of use for salaries or entrepreneur
activities, however not attempting to guide spending more efficiently.
In a scenario of a Congress that legislates without evaluating the gap
between good intentions and reality, weak state universities controlled
by actors uninterested in reform and where the few researchers there do
not enjoy an environment adequate for their best performance, and an
MEF concerned by controlling spending and not in generating incen-
tives for a better use of these resources, the abundance opportunity is
being lost.1
This article proposes that the analytical case of interest is illustra-
tive of what occurs in diverse areas of the state during times of abun-
dance. Instead of taking advantage of resources to strengthen and
construct an improved state, weak organizations end up trapped in
their own organizational precariousness and institutional legacies that
impede substantial changes that would have strengthened them. This
case, thus, makes theoretical and practical contributions about the bar-
riers faced in state strengthening in developing countries during times
of resource abundance.
This chapter has the following structure. First, it will discuss why
this case is useful for understanding the difficulty in constructing a
state during times of abundance and how this relates to the findings
of previous research about institutional change and regional reforms.
Later, it will detail the changes that the law has undergone and docu-
ment its limited impact. In the third part, the heart of this paper, the
role played by the above-mentioned institutions in order to obtain
results is explained. Finally, this article will present some conclusions
about the theoretical and practical lessons that this case provides to
researchers.
2 Commodity Boom, State Construction, and the

Implementation Gap
As many authors have highlighted, periods of economic growth stimu-
lated by increases in the prices of primary materials in the region fre-
quently do not drive a significant state or institutional strengthening
(Bulmer-Thomas 2011; Paredes 2013; Ghezzi and Gallardo 2013;
Kurtz 2013). Rather, authors note how in some cases, state weakness
is maintained despite booms in natural resources (Paredes 2013; Kurtz
2013). Among causes for this continuity, authors mention that previous
legacies of state and institutional weakness cause abundance to be lost
in clientelism spending, corruption, and unapplied reform processes to
strengthen the state. The injection of sources can end up benefiting sec-
tors whose particular interests oppose greater development and would
even use such funds to strengthen their positions.
This article argues that the present case illustrates processes that
repeat on the state level during periods of regional economic booms.
In this case, public institutions do not take advantage of numerous
resources to significantly strengthen themselves, a situation that repeats
itself in diverse institutions of the Peruvian state. Legacies of institu-
tional weakness in state universities and its executive administrative style
limit the possibility of improving these organizations’ levels. Despite the
availability of economic resources for significant strengthening changes,
authorities do not promote profound reform agendas that permit the
resolution of serious causes of internal weakness.
This case also demonstrates the responsibility of political actors and
professional state sectors in not using abundant resources appropriately.
As this article shows, entities that should promote these changes, like
Congress and the MEF, also fail to understand the problem. Congress
legislates without evaluating the context in which the law operates and
does not consider implementation difficulties. This “legalistic” way of
making laws is constant in Peru, but the extreme weakness of political
parties makes this situation even more dramatic in recent years. Given
that the time period of politicians is very short, they do not focus on
medium-term reforms. The MEF is more a professional organization,
but intervenes in avoiding inefficient spending, not as an innovative insti-
tution capable of promoting incentives for constructive use of resources.
Strengthened in the 1990s, when it played the role of the cashier that
controlled irresponsible spending in the country, the MEF has had dif-
ficulties in adapting itself to times of abundance.
This study also dialogues with previous research on institutional

change and the inappropriate way in which reforms are conducted in
Latin America. It shows clearly what Merilee Grindle called the “imple-
mentation gap,” the distance between a law and its application (2009).
This gap has diverse causes: state weakness in bodies responsible for
applying the law, poor design, and political opposition from economic or
social actors in politics, among others. This case illustrates two of these
causes: an unreal (and irresponsible) law design and institutional legacies
in organizations responsible for its implementation. Previous research
has highlighted how frequently reformers adopted policy without eval-
uating difficulties in its execution or the context in which it would be
applied. Weyland (2005, 2006, 2009), for example, discusses the way in
which political and bureaucratic reformers copy policies and/or institu-
tions from foreign countries without carefully evaluating their impact.
Similarly, Evans (2004) analyzes the example of what he calls institu-
tional monocropping; Evans shows that institutional inserts seem to fail
in host societies because reformers do not consider the context or envi-
ronment in which the transplanted institution is functioning. Political
elites, and weak and unprofessional bureaucracies, favor this uncritical
copy in which some cases do not result in changes with greater impact:
Such reforms can even generate unexpected negative consequences.
While this case does not make reference to an external model, the leg-
islatures’ hastiness is evident given that they copied a previous model,
the oil canon, for higher education in four regions without evaluating
its effect over three decades nor its implementation difficulties. To make
this implementation gap wider, in addition to an inadequate design and
approval of law, it was left to a weak and rigid organization to execute,
which was not considered in the design either. State universities, with
their weak institutional abilities and biased authority interests, fail in
adapting the challenge proposed by the law. MEF, on its part, intends
to fill this gap, but it does so without indicating incentives or reforms
that impact university quality; in its role as cashier, it complies with its
function and guarantees that spending is not executed with inadequate
purposes, but neither does it contribute to a discussion about the quality
of spending in general.
In what follows, this article presents evidence of the causes that
explain the law’s weak impact. However, first it is important to detail
how the law has changed over the past ten years, as well as to lay the
foundation in research explaining its weak impact on the state universi-
ties in general.
3 The Canon and State Universities: Amounts,

Relaxation, and Impact
Diverse debates about the distribution criteria established by the Canon
Act (Law 27506) passed in the year 2001, and the changes product of
a regionalization process in 2002, instigated that during the years 2002
and 2003, Congress received more than 20 projects proposing reforms to
the law. Four of these projects, all by congressmen from canon-benefiting
regions, mentioned the need to direct resources to state universities. The
product of these debates was approved in 2003 with Law No. 28077,
which contains the following modification in royalty distribution2:
Article 6. Section 2. (…) Regional governments will surrender 20%

(twenty per cent) of the total received in canon to state universities of its
constituency, allocating exclusively investment in scientific and technologi-
cal research that fosters regional development. The Oil Canon maintains
current conditions of execution.3
Thus, state universities in these regions became beneficiaries of con-

siderable sums, which incremented exponentially with the abrupt rise
in mineral prices in 2004 and onward. In accordance with a report
from the Commission of Science, Innovation, and Technology of the
Congress of the Republic, canon resources directed to state universi-
ties have increased more than 20 times in the last decade (Table 1). The
number of universities that receive resources has also increased, from 19
in 2005 to 49 in 2014, in part as a result of the creation of 16 more
state universities during the government of Alan Garcia (2006–2011)
(Fig. 1).
To begin, the law does not contemplate specifications about how to
use funds, which resulted in the University of Cajamarca budgeting for
2004 a series of research projects that include considerable salary sup-
plements for professors (Garfias 2011: 40–41). These projects gen-
erated fear in the MEF, which was attempting to avoid that resources
were broken up and distributed among university professors as a salary
contribution without guaranteeing quality research. Something similar
had already occurred in the 1980s with the Special Fund for University
Development (FEDU). This fund, supposedly intended for reinforcing
research, in practice converted into a salary supplement provided without
quality or impact evaluation, and remained that way for years (Garfias
2011: 19–26).
Table 1 Canon resources transferred to state universities, 2004–2013a
Canon resources transferred to state universities, 2004–2013a
2004 33.88
2005 79.71
2006 129.34
2007 175.12
2008 281.69
2009 333.81
2010 277.13
2011 373.08
2012 446.82
2013 828.5
Source Own formulation. Based on the final report of the CCTI, 2013 and correspondents, 2014
aIn millions of Peruvian Nuevos Soles
Fig. 1 Canon resources transferred to state universities, 2004–2013 (in mil-

lions of Peruvian Nuevos Soles). Source Own formulation. Based on the final
report of the Commission of Science, Technology, and Innovation of the
Congress of the Republic, 2013, pp. 9 and correspondents, 2014
In accordance with the MEF officials responsible for executing the

law in 2004, the Ministry attempted to negotiate with universities in
establishing criteria that would assure research quality. However, facing
requests from universities and the National Assembly of Academic Deans
(ANR) (the entity that represented until 2014 both public and private
Peruvian universities), the MEF turned to Congress to limit this possi-
bility (Interview with Arróspide 2014). Thus, Congress approved a law
that prohibits the use of canon resources for compensation or business
activities, security measures that are renewed every year in the Budget
Law. Additionally, from this moment, the MEF would apply public
spending laws to regulate these funds, which are not the best to deal
with research necessities and its expected elements. This progressively
has been relaxed to permit improved execution of spending, but contin-
ues to be a problem.
Facing a magnitude of resources and research spending difficulties
in universities, since 2005, the MEF has relaxed norms and detailed
where spending should specifically occur.4 A series of new rules were
approved, including Emergency Decrees and Supreme Decrees. Among
the main ones, the Budget Law of 2007 (Law 28927) authorized the
use of resources for public investment projects that would be conducive
to improving research, which is interpreted as fairly vague in applica-
tion. Currently, 50% of the total royalties received can be used in public
investment projects, under the condition that they do not have business
purposes.
Likewise, in the Budget Law of 2008, certain priorities for funds were
determined: “research in applied sciences related with public health and
prevention of endemic diseases; agriculture and livestock sanitation; bio-
diversity and ecosystem preservation where extractive economic activities
are taking place and the efficient use of renewable energies and produc-
tive processes.” Afterward, the Budget Law of 2013 authorized the use
of these funds for activities aimed at international accreditation. Since
2014, additionally, it authorized the use of a part of funds to hire per-
sonnel that could develop investment projects. This relaxation has per-
mitted universities to develop infrastructure projects, not always related
to research (auditoriums, computer laboratories, perimeter fencing,
among others).
Why does this chapter argue that the law has not complied with
its objective? A first conclusion is that a considerable proportion of
resources that enter budgets are not being executed. In accordance with
the Commission of Science, Technology, and Innovation, only 34.5%
of total resources of canon transferred between the years 2004 and
2012 have been executed. Two independent reports that have analyzed
Table 2 Use of resources from canon transfers 2004–2012a
Use of resources from canon transfers 2004–2012a
Executed 744 34.5%

Remaining 1410 65.4%
Total 2156 100%
Source Data from the final report of CCTI, 2013, pp. 9

aIn millions of Peruvian Nuevos Soles, 41 universities evaluated
this issue show similar results, estimating spending execution at about

25–30% (Portocarrero et al. 2013; INNOVA PUCP 2012) (Table 2).
Table 3 specifies the utilization of the canon in ten universities that
receive the largest quantity of resources. These calculations are based
on two financial sources where amounts are registered: Donations and
Transfers, and Determined Resources, and are compared with available
spending of the SIAF-SP (MEF) database. The majority of universities
have executed less than 30% of transferred resources, and three universi-
ties have executed more than 50%, two of which, the Peruvian Amazon
University and Piura University, receive oil canon (as already indicated,
they have different regulations that facilitate execution of funds).
A low execution would not be a problem if resources were being used
adequately to strengthen universities. However, also, the enormous major-
ity of these resources are being used on infrastructure, which no doubt is
necessary but not sufficient to strengthen quality in professor abilities and
research. In reference to Canon use, it is possible to identify the existence
of two large blocks of expenditures: scientific research and public invest-
ment projects. In the report “Panorama de la investigación de la universi-
dad peruana” of the National Assembly of Academic Deans (ANR 2012),
a disaggregated rubric was produced for the year 2011. Amounts have
been summarized in every one of the five existing Regional University
Advisory Boards (CRI): South, North, Central, Amazon, and Lima.
As Table 4 demonstrates, the execution of resources in research projects
is considerably less than in investment projects. In the South, Lima, and
Central CRIs, where the remaining amount not executed is around 90%,
there is a prioritization of investment projects. The Central CRI spends 10%
on investment projects and only 1% on research; the Lima CRI has a 7% ver-
sus 4% in research; and the South CRI executed 9% on investment projects
and only 0.1% on research. From this table, it is evident that the regions
Table 3 Ten universities with greater resource allocation of canon resources

2004–2012
Ten universities with greater resource allocation of Canon resources Investment

2004–2012 projectsb
University Resource Amount not Executed (%) Type of canon

allocationa executeda
UN San 355.76 270.76 24 Mining 128 (2007)

Antonio del canon, royal-
Abad del ties, and gas
Cuzco canon
UN Jorge 174.15 158.63 9 Mining 53 (2006)
Basadre de canon and
Tacna royalties
UN San 139.02 114.58 18 Mining 89 (2005)
Agustin de canon and
Arequipa royalties
UN de 136.41 127.21 7 Mining 24 (2009)
Moquegua canon and
royalties
UN de Piura 131.66 47.53 64 Canon and 158 (1999)
excess oil
canon
UN de 120.52 79.52 34 Mining 30 (2007)
Santa— canon and
Nuevo royalties
Chimbote
UN Antúnez 120.52 37.12 69 Mining 72 (2007)
de Mayolo— canon and
Ancash royalties
UN Daniel 101.42 76.97 22 Mining 24 (2007)
Alcides canon and
Carrión— royalties
Pasco
UN de la 96.62 5.31 98 Canon and 51 (1999)
Amazonía excess oil
Peruana— canon
Iquitos
UN de 94.03 88.27 6 Mining 11 (2007)
Cajamarca canon and
royalties
Source Own formulation based on the final report of CCTI, 2013 and the report of ANR, 2013. 41
universities evaluated
aIn millions of Peruvian Nuevos Soles
b1999–2012: With funds from canon, excess canon, mining royalties, and FOCAM. Included in rubrics
of donations and transfers, and determined resources

Table 4 Executed canon in 2011 in investment projects and research in state

universities by CRI
Executed canon in 2011 in investment projects and research in state universities # Research
by CRI projects
2013
CRI Transfer % Executed % Executed % Remaining %
research investment
Amazon 11,842,481 100 1,458,065 12 4,965,441 42 5,418,975 46 195

Central 58,215,272 100 548,132 1 5,917,041 10 51,750,099 89 1008
Lima 5,295,276 100 189,126 4 392,575 7 4,713,575 89 583
North 145,884,512 100 270,015 0.2 78,486,079 54 67,128,418 46 582
South 424,166,273 100 610,338 0.1 38,636,241 9 384,919,694 91 343
with canon and excess oil canon also prioritize investment projects. The
North CRI spends 54% of resources on investment projects and only 0.2%
on research, while the Amazon CRI executes 42% on investment projects
compared to 12% on research. This situation has not changed substantially.
The National Auditing Office of the Republic, in a 2013 report, notes that
only 14% of resources were executed in research, but additionally, it found
that some universities barely use these resources: 15 universities did not exe-
cute not even 1% of funds, and out of these, 13 did not even spend one sol.5
Investment projects have increased progressively. Of ten proposed pro-
jects in 2001 in four universities, the number has grown to 49 in 2005
with 19 universities receiving canon funds. In 2011, the number of pro-
jects rose to 225 in 40 universities, and in 2012, 298 in 49 universities
were registered, of which 176 received a level of execution spending.
Between 2001 and 2012, 1,822 investment projects have been proposed
and registered by state universities in the country, of which 1,289 have
funds of execution spending, according to MEF registers (ANR 2013a:
20–21). Thus, universities see funds as a financial source for infrastructure.
Despite this being a necessary expenditure in weak Peruvian state universi-
ties, it is insufficient in improving academic quality and increasing research.
Beyond low spending executed on research, what has been the impact
in incrementing research capacities? Well, it is possible that despite this
low execution, there has been an important impact in the invigoration of
research. It is difficult to specify this impact, however, because there are
differences in the types of universities that receive canon. With collected
information, previous evaluations that include case studies, and two field-
work experiences in two traditional universities in theory considered the
best consolidated to use resources, we can conclude that this invigora-
tion is not occurring.
First, despite greater resources, there is no observable substantial
increase in Peruvian universities’s academic publications, nor compara-
ble to the increase that has happened in other countries of the region in
recent years. Of course, this is not a direct reflection of canon use, given
that measurements include all types of universities; however, it does help
in having a general idea of change over the past decade in law applica-
tion. According to SCImago Journal & Country Rank, Peru occupies
the 77th spot in scientific production with 8963 published documents
between the years 1996 and 2007. In 2012, improvements are not
uplifting; Peru occupied the 74th place, with 1203 published documents
that year. Although there is a small increase in scientific production,
upon comparing Peruvian production with the increase of production in
neighboring countries, its increase was very modest.
More interesting for our topic, if we take an internal photograph
of the status of academic research in Peru, it is clear that the law has
not changed the trajectory of continuous problems for research within
regional state universities, especially those where canon concentrates.
Proof of this is the figures in research that contrast Lima with other
regions. In the year 2011, the total number of university scientific pub-
lications in Peru was 2,559. Of these, universities in Lima produced
1,991, that is, 77% (Universidad Coherente 2012: 6). Public and pri-
vate universities of the 23 other regions in Peru only produced 23% of
publications. As demonstrated by Asensio’s research (2014a, b), which
also confirms this productive concentration, there is a small increase in
production, more substantial in one of our cases, the San Antonio Abad
State University in Cuzco (UNSAA). However, the detailed analysis
offered by the author shows that an important proportion of growth
occurs in private institutions located in Lima.
Case studies included in reports about the use of the university canon
show this low impact of the law: There are no competitions to access
funds. Also, when bureaucratic problems arise, project execution delays
(Portocarrero et al. 2013; INNOVA PUCP 2012). Fieldwork com-
pleted in Arequipa and Cuzco shows a clear tendency: Research projects
have execution problems and they are few and far between (although in
Cuzco, more projects have begun than in Arequipa).
Universities receiving canon such as UNSAAC, for example, have cre-

ated vice-rectors for research with the purpose of reinforcing this aca-
demic activity, but published research reports show that publications are
not peer-reviewed or indexed. The unanimous commentary made by
research professors involved in ongoing projects from various disciplines
is that administrative problems make execution very difficult. This occurs
on such an intense level that there is little incentive to continue given
the time it takes, responsibilities assumed, and zero monetary incentive
because of prohibited supplementary salary (Interviews with Aguilar
2014; Quispe 2014; Urrunaga 2014; Warthon 2014; Zamalloa 2014).
These difficulties cause researchers to see canon financing as unattractive
(Interview with Bueno 2014).
The UNSA also has internal obstacles that make academic research
difficult, despite having research professors. The famous Línea UNSA—
extra bonus compensation financed with internal resources that is given
to professors and administrative personnel that complete research pro-
jects—does not have quality, validity, or plagiarism criteria, nor does it
demand results, permitting professors to receive the bonus presenting
quarterly reports that no office seriously reviews. Likewise, of 73 research
projects that have won canon financial resources since the first university
competition in 2010, none have received money for execution in 2014
because of bureaucratic hindrances within the university and decentral-
ized organisms of the MEF that evaluate project viability through SNIP.
In summary, all information shows that state universities have
adapted to the norm by increasing capacity to spend on investment pro-
jects, but not making substantial changes to improve research possibility
and capabilities (Garfias 2011: 11; Portocarrero et al. 2013; INNOVA
PUCP 2012). This is without mentioning the many off-record com-
plaints received about the selection committees of competitions that
researchers must pass to receive project approval. Committees are com-
posed of authorities without academic or research experience that give
resources to projects of dubious scientific value and in accordance with
criteria of internal politics. Although the improvement in infrastruc-
ture was a necessary demand in universities abandoned by the state,
the image that remains is one of continuity with few profound changes
in the capabilities of beneficiary universities. Likewise, researchers that
complete their projects in difficult conditions do not see these funds as
a solution for other numerous deficiencies in their institutions. What
explains this result?
4 Determinants of Failure: Voluntary Congress,

Weak University, and Rigid Technocrats
This article proposes that three state organizations have a responsibility
in the deficient execution of the law: Congress, the state universities, and
the MEF. First, there is Congress, which designed a symbolic law dif-
ficult to implement and afterward, not attending its implementation pro-
cess adequately. Second, the state universities for its legacy of institutional
weakness and incentives for those who occupy university government
that impedes internal reforms to adapt to the law. Finally, MEF, hav-
ing the capabilities and influence to redirect the process, limited itself by
avoiding spending and relaxing criteria to allow use in public investment
projects. This article will discuss these three elements in that order.
4.1 Congress of the Republic

Problems began in the Congress of the Republic. The most noteworthy
part of documents revised and debates associated with the approval of
amendments to the Canon Act is that central aspects considered, such as
to whether it should transfer resources to state universities, given ante-
cedents of the oil canon, public university weakness, and internal clien-
telism, were not discussed. Implementation was also absent from the
debate; the references that were made to implementation were about
desired results and favorable outcomes of the law, not about its probable
effects and enormous challenges.
As discussed previously, 2001 onward, proposals were presented to
Congress for reform of the Canon Act. Requests concentrated on mod-
ifying distribution rules that did not adequately benefit districts where
resources were extracted. Congress finally established a distribution
that improved the situation of producing districts, but also, distributed
resources to regional governments created in the recent regionalization
process.
In the framework of these debates, four projects about the law pro-
posed to direct resources to state universities. All of these projects
proposed to surrender funds to universities for the development of
infrastructure and acquisition of materials (similar to the oil canon law)
without making an exclusive mentioning of research. Of these four pro-
jects, only two were specifically about the topic, and only one presented
a brief analysis based on the reform. All the projects made reference
to regulations in favor of state universities regarding the oil canon. In

accordance with the oil canon, regulated by special laws for each ben-
eficiary region, 5% of resources would be directed to universities and
public institutions without specifying the use of these funds; two regions
were provided with an additional 3% for their regional research centers
(Instituto de la Amazonía). This serious project justified its proposal with
some reflections about the necessity of replacing these resources with
greater “education and technological level” (Proyecto 1498-2001-CR).
As demonstrated, in this case there is no punctual reference to a global
agenda in vogue. Sustainable development and the replacement of local
capacities with extractable resources were not even mentioned to justify
the reform’s necessity.
The Commission on Energy and Mining drafted a ruling based on the
diverse projects presented (June 2003) about the new canon distribu-
tion. The ruling proposed that universities should be direct recipients of
canon funds (5% of the total) and in a final disposition specifies that they
can only use these funds for “spending on physical, technological, and
informatics infrastructure, or the implementation of bibliographic mate-
rial or scientific laboratories (…).” Project justification also mentions the
oil canon law, noting that it allowed universities to receive funds for its
benefit and as evidence, referenced recent expenditures. However, in the
ruling, there is no discussion of how the law was applied or its impact on
the four beneficiary universities. It also did not discuss ability or internal
organization of state universities, which is a central topic in the moment
of law implementation.
In the first session debating the law project (August 21, 2003), these
topics were not mentioned either. The majority of interventions were
centered on other aspects associated with the territorial distribution
of resources. Regarding universities, it specifies that according to the
Constitution, funds are directed to instances of territorial government.
For this reason, it was necessary to include transfers to universities as part
of regional government spending, which was established in later versions
of the project. However, more interesting for this paper is to observe
from where the impulse to modify a project and direct funds exclusively
to research emerged. Two congressmen proposed to put more emphasis
in research. On the one hand, very superficially, Congressman Villanueva
Mansilla specified that the total of resources should be designated to
research and technological innovation, in addition to increasing propor-
tion for universities at 15% of the canon total. Upon arguing this, the
congressman’s interest was to foment technological local development,

a topic disregarded by the canon (Interview with Villanueva 2014). On
the other hand, Congressman Doris Sanchez, a member of the govern-
ment legislators and biology researcher at San Marcos State University,
indicated that the fostering of research should be permitted in spending.
In the following session, August 28, the law already had its content
approved, including the mention of spending “exclusive in scientific
and technological research” and eliminating the content of the previous
project that permitted other spending in infrastructure and materials.
This was arranged and approved in plenary session, with only two votes
in contrary during its first vote and none in the second (although with
low attendance, probably because the law had already been agreed and
approved).
It is unbelievable for observers informed about what high-level
research implies that millions of dollars have been assigned to weak insti-
tutions without exploring their capabilities to spend these amounts or
whether the money’s destination was the most appropriate. Although
one could argue that these amounts will only rise exponentially with the
increase in mineral prices in the following years, the 2003 prices were
already quite high. The idea of providing resources for local research
seems attractive and was approved by majority, not only for legislators of
mining regions, that saw the law with electoral interests (Garfias 2011:
39), but also legislators in general.
In the following years, Congress lost interest in implementing the law
despite its increase in funds and accumulation without being used. The
legislative supported MEF in regulating the way in which funds would
be utilized through special laws and the Budget Law, but basically it
lost direction in the process, leaving it in the hands of state universities
and MEF. An exception to this disinterest is the recent project of the
Commission of Science, Innovation, and Technology, which had com-
pleted a detailed report about the use of canon resources by beneficiary
universities. Its president in 2014, Jesús Hurtado, individually presented
diverse law projects looking to redirect parts of its resources to rein-
force research in public and private universities. In his opinion, the state
universities were overwhelmed by this responsibility and should find
alternatives to avoid losing resources (Interview with Hurtado 2014).
Beyond the inadequacy in insisting on using all funds for research, which
seems unrealistic, it is positive to observe a real concern about the cur-
rent situation.
4.2 State Universities: Between Institutional

Weakness and Cliques of Power
The situation of state universities also explains this result. On the one
hand, the Peruvian state universities’ legacy of bureaucratic and academic
weakness makes it difficult to take advantage of resources. However,
above all, university governments deserve special attention with their
strong incentives to maintain the status quo and avoid meritocratic
reforms that would allow a better use of resources. This environment
does not favor researchers that still work at the state universities, nor
does it attract new researchers that would strengthen the institution.
Weak state universities are unlikely to be able to take advantage of
the opportunity provided by resources. While we cannot extensively
speak on the topic, it is relevant to note that the causes of public uni-
versity weakness are diverse and with profound roots: governments and
political parties that respond to the demand to democratize higher edu-
cation in the mid-century without increasing their lean budgets nor
adopting development plans; the effects of the politicization and radi-
calism that impedes putting academic quality into the agenda; govern-
ments that see state universities as a problem more than a possibility;
political violence that directly hit universities in the eighties, taking
away their prestige in public opinion and causing quality professors and
students to leave; and, as this article will demonstrate, cliques that hold
power through clientelism and understand autonomy as a protection of
their interests (Lynch 1990; CVR 2003; MINEDU 2005; Degregori
and Sandoval 2009).
As a result of these processes of institutional debilitation, state uni-
versities have a limited capacity to research. Exceptions seem to occur in
Lima universities (Agricultural University, the Engineering University,
and San Fernando, the School of Medicine at UNMSM) and some
departments in regional universities where researchers have, with a lot
of effort, constructed international support networks for research. But
groups of professors trained in research and some specialized centers that
can conduct the type of projects that the Canon Act demands struggle
with bureaucratic impediments, administrative problems, and difficulties
to manage and process funds.
A general problem that shows this weakness, but at the same time is
the cause of maintaining the status quo, is that research lacks internal
meritocratic evaluation criteria. An example is the way in which research
is treated in state universities before the law was passed, and remains
this way. Research funds assigned in the 1990s to universities were used
as salary supplements with little or no auditing (Garfias 2011: 19–26).
Professors present research projects in generic topics that were approved
by their respective departments. Afterward, these professors informed
about the results. Overall, the entire process was overwhelmed by for-
mality, but auditing of quality or impact was nonexistent. In practice,
these funds served as salary supplements without an impact on univer-
sity research production. Research reports collected in UNSAAC for
this paper show similar deficiencies. Overall, the projects were not pub-
lished in specialized journals, with out-of-date bibliography, and topics
that were not original but rather some form of literature review. Types of
products were mixed in research without taking into consideration their
level or quality. This form of acting and the level of previous production
justified the MEF’s fear that royalties would be used for purposes differ-
ent from what the law states: It could convert itself into salary supple-
ments without impact in quality.
Another example of institutional weakness that impeded research in
state universities is the debt that UNSA had with professors who won
canon funds through a research project competition in 2010. As the
winning projects had a different format to investment projects approved
by SNIP, the Office of Scheduling and Investment of MEF (OPI) in
Arequipa designed a timeline of one year so that projects could adjust
to the approved format. According to interviews, winning professors
rewrote their documents up to four times during 2011 without receiv-
ing an answer from the Offices of Logistics and Planning and the Office
of Planning of UNSA. During 2012 and 2013, they were able to sched-
ule meetings with authorities that recognized the disconnection between
university offices, and a team of professors and students was formed spe-
cifically to adapt projects to SNIP format. Despite the fact that projects
had concluded, money had still not be reimbursed, and many profes-
sors had ceased their projects. These research professors recognized by
their departments preferred external funding compared to the universi-
ty’s funding. In departments of medicine of this university, international
networks helped equip a laboratory, and private companies financed
some research. Likewise, social science professors preferred to align
themselves with external research institutions or form their own like
CEDER-Arequipa.
However, it is important to emphasize another aspect that should be

evaluated. Resources were in theory an important incentive to adapt to
the law. Nevertheless, an internal problem, also historic, made this adap-
tion difficult: the behavior of university government in the majority of
state universities. Literature cited above also highlights the clientelist
management that characterizes university governments and the way in
which the concept of university autonomy was manipulated to be seen
as maintaining the status quo (Degregori and Sandoval 2009: 39–41;
MINEDU 2005).
In accordance with current regulations, student representatives
(1/3 of the vote) and professor counterparts (2/3 of the vote) chose
university authorities. It is important for the continuity of construct-
ing support coalitions that permit maintaining certain positions, guar-
anteeing thus access to limited institutional resources. Candidates do
not win these elections because of academic prestige or their admin-
istrative proposals, but rather because they guarantee continuity
of power in certain hands. There are no (or if there were, they have
relaxed considerably) evaluation, sanction, or auditing mechanisms of
titled professors. Given academic and research weakness of existing
human resources, there are strong incentives for things to not signifi-
cantly change: meritocracy, undertsood as transparent and predict-
able rules for promotion, would affect those benefiting currently by
the system. This evidently affects researchers who approve meritocratic
evaluation criteria.
In effect, research on the topic, as well as interviews completed for
this paper, highlights how a mix of pragmatism and clientelism that uses
internal resources to maintain cliques of power. This form of governing
makes modifying the inner rules to be costly (Lynch 1990; Villactorta
2012; Chávez 2014; Interviews with Mori and Sandoval 2014).
Research that has closely examined the functioning of the Peruvian state
universities highlights problems previously mentioned: control over the
election of professors (Villacorta 2012, 179–180), hiring of people close
to authorities and of low academic quality (Villacorta 2012: 181–182;
Lynch 1990), and corruption to achieve student support (Villacorta
2012: 181; Chávez 2014). The image that appears is one of unqualified
and critical students and professors that accept the situation because they
see little possibility of change (Nureña et al. 2014; Interview with Mori
2014).
These authorities benefiting from the current patrimonial system

will see their positions of power in jeopardy if they make meritocratic
changes in response to canon incentives. Although resources cannot be
used for salary improvements, ordinary resources can be directed toward
attracting better-trained professors to complete research that will have
the necessary funding. The organization, on the contrary, has been fairly
resistant to discussing these changes, prioritizing relaxation demands
regarding research spending and infrastructure over promoting an inter-
nal reengineering regarding professor quality and contracting. Even sal-
ary increases for professors in the past decade, which could have served
as an attraction for new professors to the university, have not produced
this result. On the other hand, the abundance of administrative resources
by university governments without auditing is breeding ground for acts
of corruption. Institutions such as Desco Sur and the Red Anticorrupción
de Arequipa suggest evidence of this in their research about canon exe-
cution in UNSA (Red Nacional Anticorrupción de Arequipa 2012; Pinto
2012: 41).
The diagnoses of sectors linked to state universities do not discuss
these problems of the internal organization as a central part of the prob-
lem. The already disappeared ANR completed a diagnosis and concluded
that the problem was in “the restriction of resource use for payment of
compensation or payment of any nature, the academic overload, lack of
adequate infrastructure, and little clarity of the Royalties Law for this
year (ANR 2013a, 5).” Limited impact of the law is attributed to MEF
rigidness and lecture overload of professors. In an interview with Rosa
Luz Pacheco, Director of the General Direction of Research at ANR,
this diagnosis was reiterated: There are researchers in the state universi-
ties but incentives are not in their favor (Interview with Pacheco 2014).6
These aspects are relevant, but do not address the problem’s core.
Effectively, the restriction of providing compensation and payments of
any nature functions as a disincentive for professor-researchers that invest
time in an activity, something normal in any university where research is
done. Regarding this, it is important to discuss the MEF’s limited flex-
ibility. However, as noted, something that is not mentioned in ANR
reports or documents is that the problem originates when universities
attempted to use funds in a way that research projects functioned in real-
ity as salary supplements, as had been done traditionally. Although many
alterations have made the canon legislation unclear, since 2006–2007
we know what the MEF expects from the state universities in order to
authorize budgets for research. Specifications have been more on the

side of investment projects, where there is greater spending. Thus, nor-
mative specifications are not a problem, but rather the weak research
capacity of Peruvian universities, and on top of this a lack of meritocratic
adaptation.7
Thus, there are internal responsibilities that extend beyond professor
overload, including a self-criticism of internal conditions that make adap-
tation to the law difficult. Returning to the previous point, it is clear that
antecedents show that implementation requires a system of incentives
that promotes meritocracy to avoid that resources reinforce clientelist
tendencies, or even direct resources toward other purposes that encour-
age this meritocracy. This did not happen.
4.3 MEF: Spending Control Without Alternatives

Diverse authors have noted the enormous power of technocracy in
Peru’s current MEF (Durand 2006; Vergara 2012; Dargent 2011,
2015). In part because of politician weakness, today MEF technocrats
are considered influential, as capable of pushing forward their agendas
and blocking projects that they oppose. This power arose with the eco-
nomic crisis of the 1980s, when market reforms were consolidated in the
first half of the 1990s and maintained themselves the rest of the decade
and after the democratic transition of 2000. This process marks the form
of action assumed by the organization: The MEF turns itself into a cash-
ier responsible for limiting the deficit and propelling market reforms, sus-
picious of state spending and projects that are considered statist.
These legacies explain to a great extent its approach to state univer-
sities and the canon. Its main concern was to avoid the possibility of
spending on salaries. The topic of salaries transcends this concrete case:
The MEF observed that a negative trend in budget increases of public
institutions was that these institutions will frequently use these resources
to boost salaries without considering administrative quality and citizen
service. That is, resources were feeding inefficiency without initiating
reforms. One of the former officials notes that without surveillance or
incentive mechanisms for change, increasing salaries would not guaran-
tee quality service, and this was the fear in salary increases with research
funds in state universities (Interview with Arróspide 2014).
As discussed, the evaluation of this article indicates that the MEF
should not be criticized for acting in limiting spending that would
have probably contorted the initial purpose of the law. The possibility of
directing spending for business activities, not research, was also of con-
cern. However, the main point was to attribute responsibility to the MEF
in this situation, that is, before the absence of a specific legal framework
for the execution of spending, which opted to put locks on spending
processes, assimilate spending to other processes of public spending very
different from contracting, and not find alternatives to achieve spending
with real impact. Infrastructure spending processes have become more
flexible, but less proactivity is found boosting research and even less so in
rethinking meritocratic incentives to strengthen state universities.
Of course, the MEF could note that it was not responsible for pro-
moting a change in laws or speeding up spending. This function cor-
responded to politicians or universities. The MEF already went beyond
its responsibilities by requesting universities and the ANR to evaluate
the topic. As mentioned by the functionary responsible for implement-
ing the MEF’s law, the ministry tried to find a solution since the pro-
cess’ beginning (Interview with Arróspide 2014). However, the MEF’s
power in the Peruvian state is considerable and has mechanisms to
negotiate and direct an adequate use of resources. It was able to, for
example, develop incentives to facilitate the execution of spending,
maintaining safeguards, or promoting forms of execution that collect
research particularities. As suggested in the conclusion of this article,
given the weakness of the political and bureaucratic sector, the MEF was
the only entity capable of redefining the law to impact state universities,
although it did not.
This article considers that there is another factor behind this problem
to explain disinterest, however tentative and without sufficient evidence.
MEF was the champion of market reforms in Peru, thus linked to several
reforms that opted for the privatization of public services, such as edu-
cation. The market option since the 1990s was to promote the private
university and not the public one, which was considered an institution
incapable of resolving the problem of higher education in Peru. In this
sense, there was no urgency about the topic and it was easy to disregard
the problem. Diverse business elites share this perception over the media:
State universities are not a priority. In general terms, ideology, and not
only pragmatism, played a role in this low interest in discussing the state
university reform in Peru.
5 Conclusion
This case demonstrates how the opportunity provided by abundant
resources to change the trajectory of institutional weakness is lost
because of a series of factors. These factors are common in countries in
the region: principally, precedent of state weakness and negative organi-
zation legacies (state universities), the formalist manner in designing
laws without evaluating implementation difficulties (Congress), and the
absence of institutional interest by MEF, a state actor that had the capac-
ity to prevent irresponsible expenditure but avoids involving itself in the
implementation process (MEF).
Diverse organizations involved in the use of this research canon have
failed in establishing proceedings or regulations that permit implement-
ing the law. For example, mechanisms were established so that prestig-
ious institutions could evaluate and approve research projects. Likewise,
they could evaluate how to provide benefits to the researcher (reduc-
ing lecture, salary increase, production bonuses, among others). At the
same time, reform regarding funds to develop real research skills instead
of relaxing use of funds was demanded. Also, resources could be used
to reinforce existing research centers that upon using assigned resources
could authorize the hiring of academic and specialized technical personal.
This concrete case, thus, exemplifies diverse processes of the state
when resources increase considerably and adequate use of them is dif-
ficult. More than talking about the “resource curse,” a term that insinu-
ates that the state is worse off having more resources, in the majority
of cases, it is correct to note that countries with weak institutions prob-
ably could not use these resources to invest in development and substan-
tial state strengthening (Paredes 2013; Kurtz 2013). Similar problems
are also common in local and regional governments that receive canon
resources.
Probably in Peru, where political parties have lost considerable rel-
evance and where politicians remain short times in positions of high
volatility, the situation is worse. Politicians with short-term timelines,
without organizations that survive them, have less interest in using such
resources to make reforms that will only have medium- or long-term
impact. These political elites are quick in adopting these distributive
institutions, but completely detach themselves from the implementation
of these rules. The general lesson, thus, is that weak political elites and a
state with limited capacities make it difficult to take advantage of these

optimal resource conditions.
This article concludes with a topic that captured our attention the
length of this research. It is surprising that if the objective were to rein-
force regional development through state universities, actors interviewed
would have noted that there were various possible actions in addition to
promoting research, yet they did not. The reason to approve this type
of law is that extractive regions require the fostering of human abilities
and productive diversity as a form of compensating the loss of nonrenew-
able resources (mining and oil). Research can contribute to this improve-
ment, without a doubt, but not only does it take time to see its fruits,
but also it is far from being the only possible measure. Consultancies and
reports cited recommend precisely a revision of the law to evaluate other
mechanisms with higher impact.
If what it intended was to improve local development, the objective
should have been also to improve the formation of professionals and
contribution to productive diversity. That is, funds could have been used
to promote a change in state universities: recruiting systems for quality
professors under competitive conditions, enforcing meritocratic rules,
reinforcing the competencies of studies, establishing incentives for aca-
demic and productive quality, among others (see conclusions and recom-
mendations of Portocarrero et al. 2013; INNOVA PUCP 2012). For
the rest, a better-trained teaching staff could probably indirectly improve
research. Before thinking about rushed purposes, the law should have
thought of how to strengthen the means to achieve them. Upon appear-
ance, the resource boom will end without seeing a substantial change in
an institution so essential for sustainable growth: the state university.
Notes
1.
The prolix work of Marco Garfias (2011) provides conclusions similar
to those presented in this article regarding institutional weakness in state
universities as a source of the problem of low law impact on research:
Limited academic capabilities, organizational weakness, poor administra-
tion, unmeritocratic networks, among others, impede universities from
overcoming the “academic and administrative setback of government that
initiated for multiple reasons in the decade 1960” (Garfias 2011, 6). In
addition to observing the phenomenon five years after Garfias’ work con-
cluded, this article provides a theoretical model more concentrated on the
university and research and more focused on other involved institutions.
2. The types of canons that are paid in Peru are: mining canon, hydropower
canon, gas canon, fisheries canon, forestry canon, and oil canon and excess
canon. The first five are regulated by Laws 27506, 28077, and 28322,
while the oil Canon and excess canon are regulated through special leg-
islation for each department. The oil Canon is distributed in regions of
Loreto, Ucayali, Piura, and Tumbes.
3. The exception in the case of oil Canon is that the universities already ben-
efiting from this resource have a more open system that does not limit
spending on research and also contains special clauses that permit them to
release funds to other higher education centers.
4. The complicated evolution of these amendments is found in Garfias
(2011, 38–42); ANR (2013, 10–16) and the Commission on Science,
Technology, and Innovation (2013, 2–4).
5. Press Note 133 of the National Auditing Office of the Republic “State
universities only executed 14.1% of royalty resources that should be des-
tined for scientific research.” 12/27/2013.
6. Similarly, a group of academics, one of which is from Moquegua
University, considers that the lack of stimulus in compensation explains the
low interest in using the canon (Blanco et al. 2012).
7. The ANR (2012) was right, rather, that other proposals directed to foment
research recognized the importance of strengthening human resources to
achieve quality research; however, these topics are not discussed in docu-
ments regarding canon spending.
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Eduardo Dargent Bocanegra is an associate professor of political science
at Pontificia Universidad Católica del Perú. His main teaching and research
interests are comparative public policy, political economy, and the state in the
developing world. He has published in Comparative Politics, the Journal of
Latin American Studies, the Journal of Democracy. His book Technocracy and
Democracy in Latin America (New York: CUP) was published in 2015. He
received a PhD in Political Science from University of Texas, Austin.
Noelia Chávez Ángeles has a degree in sociology from the Pontifical Catholic

University of Peru (PUCP). Her research focuses on issues of subnational poli-
tics, higher education, urban and youth’s social movements, and institutional
change. She coauthored Democracia y Territorio en Países Unitarios. Una Agenda
Pendiente (JNE 2016). Currently, she participates in two PUCP research pro-
jects and works for the Peruvian National Superintendence of Higher Education
(SUNEDU).
CHAPTER 4
Fragmented Layering: Building a Green

State for Mining in Peru
José Carlos Orihuela and Maritza Paredes
The social construction of environmental regulations for mining in Peru

can be used as another case for debunking the “discontinuous model” of
institutional change. According to Streeck and Thelen (2005), institu-
tions evolve continuously in an incremental manner, rather than abruptly
at “critical junctures” or “unsettled times” (Collier and Collier 1991;
Katznelson 2003). Years ago, Thelen (2003) had already criticized the
continuity view proposed by the path-dependence school of institutional
change by arguing a need to consider the significance of layering. At a
glance, the green state for mining in Peru is composed of institutional
layers of legal norms and state organizations established, upgraded, and
constantly evolving from 1992 onward.
Fitting complex reality into simplified concepts is never a simple task. To
begin with, there is the problem of definitions. With “institutions,” most
scholars refer to “the rules of the game” (North 1990). Thus, Thelen
(2003) and authors of the book edited by Streeck and Thelen (2005), in
particular, examine “formalized rules that may be enforced by calling a third
party” (p. 10). We argue two different views against this. First, we find the
J.C. Orihuela (*) · M. Paredes 


98 J.C. Orihuela and M. Paredes
focus on formalized rules too restrictive. The level of enforcement power a

formal rule can sustain differs significantly from context to context. In par-
ticular, there are significant differences between the contexts of advanced
capitalist economies, which are the subject of most institutionalism litera-
ture, and their Latin American counterparts. Peru’s formal rules are not
well enforced; additionally, Peru has one of the highest rates of mistrust in
legal institutions and the state in the characteristically informal region of
Latin America (Levinsky and Murillo 2009). Therefore, the study of institu-
tions should be not only about “norms with teeth” (Rueschemeyer 2009),
whether they are formal or informal, but also about norms in the process
of developing teeth. The key element of institutions for Rueschemeyer, and
for classical political sociologists, is the power “to regulate and sustain an
important area of social life”; thus, mechanisms of “support and enforce-
ment” are intrinsic to institutions (p. 210). Yet, such power and mecha-
nisms are subject to social construction, in which legal milestones and
formalized rules in general do not always have much to say other than sign-
aling the demands of certain societal segments for institutional change.
Secondly, and maybe largely because of the support and enforcement
gap characterizing formal rules in political economies of the developing
world, we are as much interested in the rules of the game being institu-
tionalized as in the state or societal organizations commonly acting in
the spectrum of such rules. We contend that to follow North (1990)
in using “institutions” only for rules misleads scholarship. In fact, it is
important to analytically distinguish rules from organizations, despite that
both types of social constructs are part of the same institutional environ-
ment or institutional regime (Greif 2006). However, the significance of
a particular set of rules cannot be well understood without considering
the organizations giving meaning to it. As we will show, organizations
play an important role in the institutionalization of formal rules; organi-
zations not only enforce, but also interpret or translate rules they are
meant to give life to. So important is their role that organizations may
end up embodying the rules—and more broadly the policy principles and
political values—they forge. Therefore, some organizations become insti-
tutions, and organizational dynamics are key to fully comprehend how
institutions evolve (Di Maggio and Powell 1983; Campbell 2004, 2010).
These differences aside, we find that the concepts, arguments, and
working hypotheses travel well from the study of formalized rules in
advanced capitalist economies to the study of in-the-making rules,
state, and societal organizations in developing ones. However, the
4 FRAGMENTED LAYERING: BUILDING A GREEN STATE FOR MINING IN PERU 99
incremental change with transformative results ideal type of institu-

tional change, different than the “big changes in respond to big shocks”
type (Streeck and Thelen 2005: 9), poses problems as a definition for
the case study we present here. Twenty-five years after green state build-
ing began, we observe as much discontinuity as continuity, given that it
is naive to expect that entrenched political economic behavior—such as
using rivers and lakes as dumping facilities—can be removed by decree
only. All too often, institutional change and its consequences for human
development are not clear-cut phenomena in weak-state contexts that
overwhelmingly characterize the developing world. So, the alleged trans-
formative results of incremental institutional change need to be evalu-
ated.
Why did Peru adopt green state institutions in first place? Dimensions
of the international political economy must be considered in order
to understand the process of institutional change. Peru’s green state
emerged at the post-Lost Decade juncture, also referred to as the “politi-
cal opportunity structure” (see Gruber and Orihuela in this book), which
was shaped by both international and domestic political processes and
events. The Peruvian state adopted and adapted globalized institutional
blueprints of environmental action helped by the coercive forces of inter-
national trade and mimicking foreign state experience. Epistemic com-
munities of forest engineers and conservation biologists, from the 1960s
onward, and environmental lawyers, from the 1980s onward, the two
of them crossing the state-and-society divide and well connected with
foreign peers, were fundamental for this national experience (Orihuela
2014b, c). However, diffusion always involves some adaptation to local
contingency and domestic historical patterns of institutional evolution.
Therefore, it is most accurate to refer to this phenomenon as translation
(Campbell 2004, 2010).
In particular, the green state diffused to a national political economy
system in which (i) the antecedent power distribution of state and society
was that of a weak state highly influenced by extractive interests in min-
ing and fisheries and (ii) there was no rooted repertoire of bureaucratic
regulatory autonomy. Thus, Orihuela (2014a, c) document that National
Commissions of the Environment and environmental quality rules
emerged in the early 1990s in Chile and Peru, but the green state manu-
factured in Santiago had higher autonomy than the one put together in
Lima. Peru translated internationally diffused institutions according to its
national practice(Orihuela 2014c).
In translation, therefore, compliance with the adopted international

norm can end up having little or no relevance. Rules can maintain their
value only formally. In particular, if no organizational capacity develops
to enforce and strictly interpret the adopted rules of the game, rules
may become “decoupled” from their original goals (Hironaka 2002).
Contrary to the popular academic view of institutions as rules repre-
senting functional equilibrium among actors before “the game” starts
(North 1990), the case of the Peruvian green state shows how formal
institutions develop after the game is defined. This occurs if and only
if there is effective state action. But there is more, regulators and those
regulated try to translate and remake over and over again legally estab-
lished constraints (see Gruber and Orihuela in this volume). Legal
history ends up telling little about how institutions evolve. Strictly
speaking, for instance, air quality standards for smelters regulation meant
nothing in practice for over a decade after its legalization (Orihuela
2014a).
The simple lesson we expose in this chapter is that without bureau-
cratic autonomy of state organizations, formal rules do not become
“constraints that shape human interaction” (North 1990: 3). The forg-
ing of bureaucratic autonomy (Carpenter 2001) is a self-reinforcing
process in which activism of institutional entrepreneurs within specific
organizations and crosscutting epistemic networks at particular junctures
and contingencies matters for the chances of future state activism. Layer
by layer, institutional entrepreneurs build bureaucratic autonomy, trans-
lating globalized blueprints and reinventing old state action, but only as
much as the respective national political economy permits.
In the rest of the chapter, we will show that the piecemeal insti-
tutional development under the 1992-established General Direction
of Environmental Affairs (Dirección General de Asuntos Ambientales,
DGAA) of the Ministry of Energy and Mining produced minor results
compared to what was achieved in the next two policy periods. In 2006,
the Supervising Organism for Energy Investment (Organismo Supervisor
de la Inversión en Energía, OSINERG), created to oversee energy pri-
vatization, became the Supervising Organism for Energy and Mining
Investment (OSINERGMIN), taking over most regulatory functions
previously held by the DGAA. As a result, more meaningful institu-
tional development occurred. In turn, the Organism of Environmental
Evaluation and Auditing (Organismo de Evaluación y Fiscalización
Ambiental, OEFA), established in 2008, has arguably achieved more in
less time than their predecessors combined. Yet, nowadays these three
state organizations coexist alongside other environmentally minded

state organizations, which tells a story of fragmented layering of green
bureaucratic autonomy. In the following section, we will expose the basic
facts in the form of an analytic narrative.
1 Legal Birth of the Green State at a Neoliberal

Juncture: DGAA and CONAM Layers
The legal history of environmental institutions for mining in Peru started
in 1992. Before the creation of the DGAA in the Vice-Ministry of
Mines, within the Ministry of Energy and Mining (MEM), there were
neither explicit norms nor state organizations dedicated to environmen-
tal regulation of mining. Mining was the first sector that produced new
era environmental regulation, 2 years before the national organization
was established, the National Environmental Council (Consejo Nacional
del Medio Ambiente, CONAM). Thus, formally, the Peruvian green state
was born within the mining sector.
Formally, yes, but new state action in one way or another always
builds on old state action. The environment as an institutional field is
not created from scratch, but rather on top of pre-existing legacies. By
the early 1960s, a fragile set of unarticulated rules, organizations, and
polices configured the institutional field for managing natural resources.
Within a developmental state mind frame, the National Office for the
Evaluation of Natural Resources (Oficina Nacional de Evaluación de
Recursos Naturales, ONERN) was created in 1962 to provide informa-
tion about the location, quantity, and quality of natural resources (Pulgar
Vidal 2008). However, major control over the management of natural
resources remained in the productive ministries, mainly interested in
forging economic activities of their respective sectors. Other forms of
sectorial state institutions that had environmental mandates also existed
previously to the green state for mining. According to an established law
before the DGAA and CONAM was created, in particular, mining con-
cessions could not be granted where protected areas had already been
established and mines had to observe environmental health standards for
their workers. Nevertheless, the applied importance of these rules of the
game was minimal. The first protected area in Peru was established in
1957. Although the Dirección General de Asuntos Forestales expanded
protected areas to almost 580 square kilometers by 1990, most of the
natural conservation territory was located in the Amazon, which affects
oil rather than mining (Orihuela 2014b). In turn, the state organization
for occupational health, CENSOPAS, was established in 1940 (previ-

ously known as the Institute of Occupational Health). However, the
health of neighboring peoples and ecosystems did not form part of this
mandate. The environment had so little importance for pre-1990s min-
ing regulation that the current census of abandoned mining facilities
with environmental impacts identifies over 8,600 cases, most of which
were attributed to pre-1990s mining (Orihuela 2014a).
In conclusion, there were some environmentally related regula-
tions and state organizations in place pre-1990s, yet they held minimal
importance in terms of providing support mechanisms and enforce-
ment to new institutions governing mining. Most tellingly is the fact
that before institutional reform with the creation of DGAA in the MEM,
there were no air or water quality standards in place (World Bank 2005).
Most likely, having such regulations would not have made the differ-
ence in the 1970s and 1980s, as other mining countries with stronger
states like Chile formally adopted them, but had done nothing to enforce
them (Orihuela 2014a). Nuances aside, the environmental policy dif-
fusion that followed Stockholm 1972, the United Nations Conference
on the Human Environment, brought the first ever air and water quality
national standards, first national environmental laws, and first ministries
of environment or national environmental commissions worldwide, yet
produced comparatively scarce legal effects in Peru, making Peru a lag-
gard among Latin American countries (Orihuela 2014c).1
In the 1990s, a new juncture emerged. The Peruvian state had to pass
environmental reforms, or it could be removed from the free trade game,
as the examples of Mexico and Chile trying to sign Free Trade agree-
ments with the USA showed. Most importantly, Rio 1992, the United
Nations Conference on Environment and Development or the Earth
Summit, was a shaping event for what could be seen as a regional criti-
cal juncture. After Rio, all Latin American economies either adopted a
national environmental commission or upgraded to a ministry of the
environment. Rio brought CONAM to Peru. The external international
event worked as a catalyst for internal processes (Orihuela 2014c).
International processes meet and influence domestic ones. In the early
1990s, Peru was experiencing structural adjustment under Fujimori.
It is important here to recall that there were two Fujimori phases: a
moderate one and a neoliberal one. The moderate phase, which lasted
less than 2 years, had a mix of right-wingers and left-wingers in the
Executive. Given such a political opportunity structure, in 1990, within
the first weeks of office, Fujimori used a delegation of legislative power

to approve a progressive—others would say interventionist—National
Code of the Environment and Natural Resources, lobbied by a network
of environmentalists that bridged state and society (Orihuela 2014c).
This Code established the first norms related to an obligatory use of
standards and instruments for environmental management and created
the legal figure of a national environmental authority within the National
Auditing Office (Contraloría General de la República) as a regulatory
body. Congress of the previous presidential period had not approved the
bill because domestic extractive interests opposed it (Granados 2016).
In conclusion, the change in government, with the rise of a moderate
Fujimori, was a window of opportunity for environmentalists. It was a
pyrrhic victory, nonetheless. A neoliberal phase took full shape in 1992
and—without eliminating it entirely—new law-making reduced the
legal implications of the Environmental Code to zero (Granados 2016;
Orihuela 2014c). Neoliberal decrees of 1992, the “Law of Promotion of
Investment in Mining Sector” (DL-708) and the “Law of Promotion of
Private Investment” (DL-757) empowered the role of sectorial ministries
in environmental management as they were given the power of imple-
menting their own standards and instruments. Sector-based regulations
emerged after these decrees.
Thus, Peruvian neoliberals believed the economy could live without
environmental rules and organizations, a “rational choice” since such
policy gave the national economy a comparative advantage of sorts;
however, realities of the global political economy system taught them
otherwise. International development banking institutions coerced insti-
tutional reform of the Peruvian state. Privatization and state downsiz-
ing had green state making as conditionality. The World Bank was very
important in the Ministry of Energy and Mining (with the Energy and
Mining Technical Assistance Loan, EMTAL) under a simple deal: loans
and technical assistance depended, among other things, on the pass-
ing of environmental institutions. Mining interests were key for this as
well, but this time in a supportive way: Some multinational corporations
requested basic environmental rules in order to invest in Peru. The IFC,
the financial branch of the World Bank, joined mining multinational
corporations in a number of projects in Latin America. Globalization
needed a “green rubber stamp”; thus, the Peruvian government was
softly coerced to make one (Orihuela 2014a, c; Paredes and De la
Puente in this book).
Had Peru experienced a different domestic process, a more autono-

mous green state would have emerged. However, the quality of the
critical juncture in the 1990s allowed for little more. Neoliberals seized
policy power and international development organizations drafted, or
funded the drafting of, regulations that had no domestic champion.
CONAM’s first chief Gonzalo Galdos was a businessman whose only
public office background had been his participation on a privatization
committee; he believed in a minimal state and market self-regulation.
Not surprisingly then, the proclaimed national environmental author-
ity CONAM funded exclusively by the Inter American Development
Bank, operated for 2 years in the business offices of its first chief, a metal-
mechanic firm (Orihuela 2014c). Without a high-ranking institutional
entrepreneur for environmental protection present, the strong Code of
1990, which proposed a national environmental authority, was replaced
by the “toothless” CONAM Law of 1994. The Vice-Ministry of Mining
was to regulate the environmental impact of mining.
This period of construction of the green state in Peru was character-
ized by the legal adoption of environmental management instruments,
such as the environmental impact assessment (EIA) , which was intro-
duced in the mining sector in 1993 (DS 016-93-EM). The EIA rule
was originally created in the 1960s in the USA (Hironaka 2002). Yet,
evidence again illustrates how adopted formal rules of the game do
not automatically transform into institutions. In a situation of an envi-
ronmental regulatory system without leadership, the EIA in Peru has
hardly ever fulfilled its institutional goal, lacking sufficient independ-
ence, standardization, field information, and recognition of community’s
perspectives (World Bank 2005: 29–30). Despite that the MEM passed
regulation after regulation guided by World Bank and Canadian govern-
ment experts, since Canadian mining companies became important play-
ers, such weak ownership of the environmental reform of mining existed
that only six bureaucrats controlled enforcement a decade after formal
institutional change began (World Bank 2005, 30–34). Not surprisingly,
local conflict boomed at the pace of mining expansion (Paredes and De
la Puente 2014). As the case of the EIA in Peru illustrates well, “decou-
pled” legal blueprints maintain their value with formality and interna-
tional prestige. However, they do not have the organizational capacity to
fulfill their proposed objectives.
Fujimori’s presidency collapsed in 2000, but his economic doctrines
persisted. The courting of foreign investment for mega projects in the
extractives industry survived as the cornerstone of economic policy in a

new democratic era. Environmental policy was subordinated to that prin-
ciple. Thus, a decade after CONAM was established, and after another
long battle in Congress that resembled resistance to the short-lived 1990
Code, the 2005 National Environmental Law did not remove the rule
of the game “each ministry is the authority of its sector-related environ-
ment.” Fifteen years later, the Vice-Ministry of Mining was to continue
being the environmental regulator of mining according to law. To expect
a champion of environmental protection to emerge at the DGAA under
the depicted policy context seems naïve. With so minimal regulatory
autonomy, little else than putting a green rubber stamp over EIAs could
be done. In fact, environmental enforcement was even more minimal
than what the handful of professional bureaucrats at the DGAA payroll
could deliver. A Mining Council within MEM was also created with the
early 1990s reform. It worked under a private regime funded by min-
ing companies, which paid directly “qualified environmental auditors”
for their reports.2 Then, during the DGAA–Mining Council years, there
were almost no fines paid by the industry: either the DGAA bureaucrats
or the higher level of Mining Council members ruled so.
Summarizing, cornerstone legal developments of the early 1990s cre-
ated an “environmental authority” for mining within the sectorial minis-
try. In a decade and a half as top ruler, the new environmental authority
DGAA passed plenty of new rules of the game: air quality standards,
effluent regulations, EIA approvals, environmental audits, plans of mine
closure, and so on.3 However, the extent to which these formal rules
became actual practice is a completely different issue. Within a pro-busi-
ness policy context, which included state capture in the form of a revolv-
ing door between the regulator and the regulated, the minimal size of
MEM bureaucratic resources kept power to regulate at a fairly low level.
2 Institutional Conversion at the

Socio-environmental Conflict Juncture:
The OSINERGMIN Layer
The opposite to the passing of formal regulations, rule enforcement is
difficult to document in a systematic manner. However, gathered evi-
dence leaves no doubt with respect to transparency and willingness to
enforce the law. While DGAA was the environmental authority of
mining (1992–2006), little information regarding environmental fines

was disclosed to the public. In our data collection, MEM responded
that such information was not available; thus, we decided that fight-
ing for a permit to review MEM archives was pointless. In fact, the
regulator that assumed the DGAA position did not receive substan-
tial archives and basic statistics regarding this matter (Dammert and
Mollinelli 2007).4 In contrast to DGAA, OSINERGMIN (2007–2008)
and OEFA (2009–today) established a policy of transparency from day
one for their respective mandates, in line with broader institutional prac-
tices. OSINERGMIN and OEFA systematically provide information on
fines, indicating a stronger bureaucratic autonomy developed from 2007
onward (see Fig. 1).
Once again, the complete political process has to be analyzed to
understand the possibilities for institutional change during this layer-
ing period. The first decade of the new century was dominated by a rise
of socio-environmental conflict related to extractive industries in Peru.
Favorable economic conditions produced a dramatic expansion of min-
ing concessions, which inevitably increased social tensions. The politi-
cal scenario was also different: Fujimori was gone and decentralization
politics shaped a new political arena. Thus, discontent populations
Fig. 1 Environmental fines to mining companies: The OSINERGMIN (2007–

2008) and OEFA (2009–2015) layers (current US$ millions). Source Self-
elaboration, based on OSINERGMIN and OEFA data
began to mobilize. Since 2004, the Ombudsman Office has counted

socio-environmental conflicts. With reports coming on a monthly basis,
the Lima-based national press started paying more attention to pro-
tests happening in the Andes. Emblematic cases of mobilization against
new open pit projects, Tambogrande, Cerro Quilish, and Majaz had
occurred, while the major Yanacocha gold project—which had the IFC
as a partner—was involved in a case of mercury contamination (Paredes
and De la Puente 2014; De Echave et al. 2009). As if there was need for
more trouble, La Oroya, an old smelter customs system in the Central
Andes and a major case of contamination, was on the national press
due to major controversies. After privatization, the MEM had approved
a full hand of initiatives for investments committed to reduce pollu-
tion and executed no fines (Bravo 2015; Orihuela 2014a). On top of
everything, the most important economic project of Toledo’s govern-
ment (2001–2006) was the extraction and export of natural gas from
Camisea (southern Amazon), which received intense criticism by trans-
national activist networks and put in jeopardy the funding of a second
phase. Eximbank ended up pulling out from the operation in 2003, but
returned again in 2007 (Lanegra 2008). In this context, strengthening
environmental regulation was not a government priority.
During the Toledo government, there had been an attempt, if shy, to
strengthen environmental regulation during the tenure of Energy and
Mining Minister Jaime Quijandría. An increasing coalition of civil society
members in Peru and worldwide pressured the government and inter-
national companies to improve environmental regulation. In 2006, the
Dialogue Group on Mining and Sustainable Development gathered 50
specialists, including members of the industry, to produce a report that
denounced the weakness of using DGAA as a model for environmental
regulation. Quijandría had also invited a World Bank team to assess the
sector’s quality of environmental institutional development. The final
report noted inadequate personnel at DGAA and little expertise on envi-
ronmental issues within the ministry’s leadership (World Bank 2005).
Nevertheless, Quijandría moved to head of the Ministry of Economy and
Finance. From then on, his single goal was to approve the second phase
of the Camisea gas project. Minister Quijandría was a centrist of progres-
sive persuasions, but not an environmentalist (Orihuela 2014a).
With political discontent on the rise, self-regulation of the MEM
model could not be defended much longer. An independent regulatory
body had to guarantee some basic rule enforcement, since the state had
adopted so many “best practices” of green regulations for over a dec-

ade. At the juncture, the case of La Oroya shaped the decision-making
process because of DGAA’s consecutive failure to enforce the smelter’s
environmental remediation plan. During privatization, the legal fig-
ure of “environmental remediation plans” was created for mining units
transferring from state-owned enterprises to private hands. Thus, the
main controversy of La Oroya was that new owner Doe Run had not
fulfilled investment commitments signed during privatization, including
the building of a sulfuric acid plant, which the company argued could
not afford without going out of business (Bravo 2015). The proposal
of Minister Quijandría’s team was to create a Supervising Organism for
Mining Investments (Organismo Supervisor de las Inversiones en Minería,
OSIMIN), as there was already one for energy, also created with the pri-
vatization (Organismo Supervisor de la Inversión en Energía, OSINERG).
The proposal did not function. Instead, in 2006, the new government
of García (2006–2011) transformed OSINERG into OSINERGMIN5
(Orihuela 2014a: 174–175).
OSINERGMIN inherited bureaucratic autonomy from OSINERG.
Moreover, old autonomy eased the way for acquiring new autonomy
down the road. As part of the wave of “islands of efficiency,” techno-
cratic bodies created special bureaucratic regimes (Morón and Sanborn
2007; Dargent 2014). When established in 1996, OSINERG was given
a private labor regimen and granted rents from the economic sectors it
was to regulate (not more than 1% of annual sales, according to law).
These rents meant resources for hiring its own corps of professionals or
short-term contracting external ones. This was quite a different institu-
tional arrangement from the cases of CONAM and DGAA that had no
financial autonomy. When DGAA was the environmental authority, min-
ing companies directly paid consulting companies that provided techni-
cal reports to regulate them.6 Such a practice ended with the change of
regulator. Strategically, OSINERMING added to its budget sources the
income coming from fines to mining companies, further increasing its
capacity for autonomous regulation (Article 4 of Law 28964).
This second layer of the green state building resembles a case of insti-
tutional conversion, when an institution designed with one set of goals in
mind is redirected to other ends (Thelen 2003: 228–230). The nuance,
in fact, is that it was not exactly a redirection, but rather an addition of a
regulatory scope. OSINERG was created in 1996 (Law 26734) to super-
vise electricity and oil companies with the following original functions
(Article 5 of the Law): (i) to enforce norms related to the quality and
efficiency of energy services; (ii) to supervise the fulfillment of legally
binding agreements made by electricity concessionaries; (iii) to super-
vise that electricity and oil activities observe the law; and (iv) to supervise
the fulfillment of regulations regarding the environment. Basically, the
OSINERGMIN law added “mining activities” to the third and fourth
function.
More specifically, new regulatory functions included the supervision of
security, occupational health, environmental protection, and conservation
norms. Months after the transfer of functions, OSINERGMIN established
that its “universe of mining supervision” was made up of 81 companies
operating a total of 139 mining units, 118 exploration projects, and 850
environmental liabilities (Dammert and Mollinelli 2007: 137–138).
With OSINERGMIN, the institutional environment to build up the
green state action and “piecemeal institutional change,” or to forge
bureaucratic autonomy in the lexicon of Carpenter (2001), became sub-
stantially different. DGAA is under the command of the Vice-Minister of
Mining, whose main goal is to promote mining investment and is sub-
ject to rotation in response to everyday political developments. Thus,
from day one, OSINERGMIN had much more bureaucratic autonomy,
including budget independence and a decade of technocratic practice,
than what DGAA ever had.
As could be expected, within a short period of operation,
OSINERGMIN imposed its first fine on Doe Run after a decade of bad
practices in La Oroya. Figure 1 shows how regulation increased with
the OSINERGMIN layer. However, the institutional upgrade was not
enough to face political realities: Mining conflicts continued to grow,
reaching a peak in 2008, because of a strong belief in the non-independ-
ent nature of the regulatory system and other structural and contingent
factors. There were facts that gave ground to the skeptics: Only a frac-
tion of regulatory functions moved from DGAA to OSINERGMIN.
Most importantly, while OSINERGMIN was given authority over ongo-
ing mining operations, the evaluation of environmental impact assess-
ments (EIAs) was still to be completed by DGAA, the regulator that
had only “about six professional staff” by 2010 (Orihuela 2014a: 173).
OSINERMING was the last effort of the state to carry out changes
under the sectorial model of environmental regulation; endowed with
greater financial and human resources, OSINERMING left a stronger
terrain upon which to build the OEFA layer.
3 The Free Trade Agreement Juncture: The Ministry

of Environment and OEFA Layers
The second government of Alan García brought not only

OSINERGMIN in 2006, but also the Ministry of Environment and
OEFA in 2008. Why? Not because of his regard for institution build-
ing or environmental regulation. García changed from a populist Messiah
(1985–1990) to a neoliberal acolyte (2006–2011); however, his disre-
gard for state building was an unparalleled continuity. Still, conditions
explain strategic political agency; some actors are strategic in particu-
lar ways. While not having a policy program for the environment, one
day President García announced the creation of such a ministry. The
Free Trade Agreement (FTA) with the USA was the number one eco-
nomic priority of García and shaped this decision-making process.
Nevertheless, institutional change is always intricate. At junctures,
change can or cannot take place, or can take place in multiple direc-
tions. Thus, a juncture is necessary but not sufficient to produce change.
Agency and capacity to take advantage of the “permissive conditions”
were crucial for the gradual construction of the green state’s new layer.
The signing and implementation of the FTA did not have to end with the
Ministry of Environment’s formation. Chapter 18 of the FTA with the
United States requested stronger environmental legislation but did not
mention the formation of a ministry. It seems that, with the FTA defining
the policy scenario, President García was finally convinced by negotiators
of the Camisea Gas Project’s second phase who argued that establishing
a ministry will be of help in Washington, in particularly with the IADB.7
One way or the other, international trade and finance demanded Peru to
look more civilized. As mentioned earlier, from a comparative perspec-
tive, Peru was a laggard in the adoption of the environmental model that
had been prevailing as the regional standard.
Once again, passing a law can mean anything to bureaucratic auton-
omy. The Ministry of Environment bill was commissioned to multisecto-
rial technical committee composed of a dozen experts, led by renowned
ecologist Antonio Brack, who later would become the first environ-
mental minister in Peru’s history.8 García understood the need to meet
international environmental standards, but his main policy purpose was
to increase private investment on extractive minerals in the Andes and
hydrocarbons in the Amazon. He explained his particular pro-business
and pro-investment with unusual candor in his much celebrated and
contested manifesto “The Dog in the Manger.”9 President García hardly

was asking for high green bureaucratic autonomy. Commissioned experts,
however, proposed a real change for environmental regulation from a sec-
torial model to a national authority model. For the fourth time (after the
scenarios set by the 1990 Code, 1994 CONAM law, and 2005 National
Law of the Environment), the legal figure of a national environmental
authority was in debate; this time, though, it occurred during a more
plausible juncture.
The new model granting higher bureaucratic autonomy to environ-
mental regulators would not be approved without a fight.10 The propos-
als of the expert commission were cut down in the final law approved
(DL1013-2008), especially regarding mining and hydrocarbon activi-
ties (Aldana 2013: 331). The mining and hydrocarbon business asso-
ciation strongly opposed an autonomous regulatory body for their
sectors (Huertas del Pino 2009). Brack accepted to be the minister of
the Ministry of Environment’s reduced version, not to forget that he
was a nature conservationist rather than a mining- and oil-related envi-
ronmentalist, which came along with a partially neutralized Organism of
Environmental Supervision and Assessment (Organismo de Evaluación
y Fiscalización Ambiental, OEFA). Despite legal constraints, institu-
tional entrepreneurship emerged from within the new regulatory system
to push state capacities forward. The work of the OEFA’s first execu-
tive board was crucial for this outcome, taking at least 2 years of inside
work. First, the National Environmental Control System (SINEFA) Law
was approved in 2009, declaring OEFA to be the governing technical
body in charge of regulation. Later, in 2010, the OEFA finally was to
receive the functions of OSINERGMIN, i.e., the mandate of enforcing
environmental standards in the mining sector (Law 30011). During the
newborn period 2008–2010, OEFA was a dramatic “house of cards”
with continuous rumors of an imminent backing down of functions to
OSINERMING.11 Nevertheless, the work of pro-OEFA institutional
entrepreneurs was subtle and determined.12
OEFA benefitted from the pre-existing rule that provided
OSINERMING with financial autonomy. Building on that, OEFA
increased its independence by creating a new formula for fines. Financial
autonomy occurred with larger capacity for enforcement: more per-
sonnel, decentralized offices, and more built-in capacity for field-
work analysis (Granados 2015). However, institutionalization is always
a political battle. In this case, it was a battle between the industry and
environment-minded civil society, with the state playing on both sides.

According to a former director of the OEFA, “the supervision to which
companies were accustomed was not the one the OEFA implemented
anymore.”13
A new attempt to weaken the newborn environmental system took place
in 2014, in the name of private investment promotion at a global eco-
nomic downturn juncture. The so-called paquetazo ambiental, Law 30230,
reduced OEFA’s enforcement capacity by cutting down its ability to impose
fines when the infraction was first identified. The OEFA could only impose
fines if designated corrective measures were not carried out. Thus, the year
2015 witnessed a dramatic fall of fines paid by mining companies—the
industry took legal procedures against them all (see Fig. 1). This was just
the last battle in a larger war, since the mining industry has contested the
constitutionality of OEFA rents, given that environmental fines were origi-
nally granted to OSINERMING. By fighting these legal measures and the
associated discourse that the industry promoted in public, regulatory state
organizations are crucial in the gradual evolution of institutions.
New institutions are built incrementally, without completely replacing
old ones, argues Thelen (2003). Our case study backs up this theory. New
environmental rules and regulatory organizations in Peru coexist with
the not so new ones. In the first years of the newest system, the Ministry
of Mining’s DGAA continued providing environmental licenses to min-
ing projects. This represented a contradiction within the regulatory sys-
tem led by the newborn Ministry of Environment. Only in the year 2012,
with the creation of the National Service for Environmental Certification
(SENACE), the sector-based system seems to be gradually ending. While
OEFA takes care of ongoing business operations, SENACE is supposed
to take care of the ex-ante (divide and rule, as skeptics say). Eventually,
all EIAs will effectively be in the regulatory scope of SENACE. For the
mining sector, this new process was legally set to start in December 2015.
SENACE’s operations, including the standardization of policies and pro-
cedures through a one-stop environmental certification, are still to be
seen. As in the case of OEFA, autonomy will not develop without fight.
4 Conclusion
The green state for mining in Peru is composed of institutional layers of
new types of legal norms and state organizations established, upgraded,
and constantly evolving from 1992 onward. Piecemeal institutional
development under the DGAA established in 1992 within the Ministry

of Energy and Mining produced minor results compared to what was
achieved under OSINERGMIN (2007–2008) and OEFA (from 2008
onward). In a nutshell, evidence shows that without the forging of
bureaucratic autonomy, formal rules do not become “institutions” as
defined by the canonical work of Douglass North. In countries with high
levels of formal institutional development, new rules enjoy the advantage
of counting on pre-existing state organizational capacities, which made
“institutionalization” an established, expected process. As we observed in
the Peruvian green state case, this is not true in countries with low levels
of institutionalization, where new legal norms and regulations need to be
complemented with the creation of novel organizational capacities within
the state in order for rules to become institutions.
State capacity does not happen without autonomy. The forging of
bureaucratic autonomy is a self-reinforcing process in which the activism
of institutional entrepreneurs within specific organizations and crosscut-
ting epistemic networks, and at particular junctures and contingencies,
matters for the chances of the state activism that follows. Layer by layer,
institutional entrepreneurs build bureaucratic autonomy, translating glo-
balized blueprints and reinventing old state action.
The consequences of green state institutional change in Peru are still
incipient, though. Outcomes are not so transformative because legal
norms and state organizational capacity to regulate the environmen-
tal behavior of extractives—or any other industry—waited until the
early 1990s to emerge and emerged toothless—the global process hav-
ing started in the late 1960s. Bureaucratic autonomy development has
indeed occurred, but significant upgrades took place only after major
political crises and/or international pressure. Twenty-five years after
the formal establishment of environmental institutions for mining, thus,
socio-environmental conflict is at its highest, according to Ombudsman’s
Office statistics. Moreover, the conflicts of Conga, Tintaya, Pichanaki,
and Tía María produced major national political crises during the Ollanta
Humala’s government (2011–2016). The disbelief in the fairness of the
regulatory system can be observed by comparing perceptions of water
pollution in mining areas from the Agrarian Censuses of 1994 and 2012
(Orihuela et al. 2014). Contrary to the narrative of incremental institu-
tion building presented here, there is a story of high and growing dis-
trust in extractive industries and green state institutions in the rural
Andes of Peru.
Notes
1. In contrast, conservation policy strengthened with Stockholm, thanks to a
network of forest scientists that moved into the state apparatus (Orihuela
2014b).
2. DL N° 25763.
3. Beginning with Supreme Decree No 016-93-EM of May 1, 1993,
amended by Supreme Decree No 059-93-EM of December 13, 1993.
4. Interview with Alfredo Dammert.
5. Law 28964 or Law of OSINERGMIN creation (no longer called
OSINERG).
6. Article 5, Law 27474.
7. Interview with Iván Lanegra.
8. Ministerial Resolution N° 025-2008-PCM.
9. “El Perro del Hortelano,” an op-ed published in the newspaper El
Comercio, October 28, 2007.
10. According to Hugo Gómez “it was the first time in Peru that such a powerful
union as mining, complained of excessive state control or regulation in envi-
ronmental matters.” Interview with Hugo Gómez, former director of OEFA.
11. Ricardo Giesecke, Ex-Minister of the Environment, official newspaper El
Peruano, March 17, 2012.
12. Interviews with former and current OEFA officials.
13. Interview with Hugo Gómez.
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University.
CHAPTER 5
The Social Construction of a Public

Problem: The Role of the Ombudsman
in Building Institutions for Extractive
Conflict
Maritza Paredes and Lorena de la Puente
1 Introduction
Socio-environmental conflict has been a critical cost of the recent cycle
of commodities (2004–2014).1 Institutions to prevent and manage the
costs produced by about 200 local points of contention a year, mainly
in areas of mineral extraction, have only emerged slowly. These institu-
tions constitute a diffused and still uncoordinated regulatory system,
which includes norms, roundtable negotiations, and the development of
specialized offices regarding the issue: first in the Ombudsman’ Office
(Defensoría del Pueblo, DP) and afterward in the Presidency of the
Council of Ministers (The Peruvian Office of National Dialogue and
The authors thank Alba Granados for her assistance on this research, which was
greatly valuable in the culmination of this project.
M. Paredes (*) · L. de la Puente 

120 PAREDES AND L. DE LA PUENTE
Sustainability, ONDS). The aim of the chapter is to examine how this

set of overlapping old and new formal and informal rules, organizations,
and devices of state action (Thelen 2003) came into play, and how these
institutions’ purpose became a legitimate public problem in the country.
The building of institutions implies a production process of “the rules of
the game” and “organizations” (North 1990), frequently formal (Thelen
2003; Streeck and Thelen 2005), but also informal, which ultimately
regulate and sustain a crucial areas of social life (Rueschemeyer 2009). If
we consider this construction process to be a continual and gradual his-
toric process, then it would be mistaken to place analytical weight exclu-
sively on institutional stability or change. On the contrary, in accordance
with Pierson (2004), we conceive of this process as a continuum that is
best defined as “institutional development.” At the beginning of this con-
tinuum, the legitimation of a public problem constitutes the initial insti-
tutional foundation (Bourdieu 2014). Rules and organizations that derive
from this process constitute a new institutional arrangement that crucially
impacts incentives and resources of involved actors (Pierson 2004).
The prevention and management of conflicts was not an accepted
“game in town” during the first half of the commodity boom cycle. In
the early years, governments reacted to local extractive conflicts almost
exclusively with a “strong hand,” involving special police forces and the
military to control these conflicts.2 Noticeably, the security and internal
order was the legitimized state function after two decades of political
violence in the country, and social protests were openly sanctioned and
social groups debilitated (Burt 2009). The construction of a legitimate
state function and institutions regarding unrest occurred gradually dur-
ing the extractive boom’s course with two main phases. First, it begins
as a contentious process between contradictory political visions over
state intervention in civil unrest in the context of extractive industries.
Second, it emerged as part of the “entrepreneur” action of state actors.
This chapter explains these two phases and argues that the acknowledge-
ment of conflict as a public problem and the development of state institu-
tions to deal with the conflict cost of the resource boom had to surpass an
impossible situation: on the one hand, the strong opposition of powerful eco-
nomic interest, and on the other hand, the weakness of grassroots and politi-
cal actors. Thus, the antecedent power distribution of state and society actors
was a large obstacle for the development of institutions through negotiation
or coalition building among political actors. Moreover, the poor record of
the Peruvian state in rural areas left actors in confrontation (communities,
5 THE SOCIAL CONSTRUCTION OF A PUBLIC PROBLEM: THE ROLE … 121
enterprises, and state actors) without historical repertoires of negotiation.

The terrains of conflict were empty of formal or informal negotiation “hab-
its,” and full of distrust. How in this impossible scenario institutions devel-
oped? This chapter explains that the “entrepreneur” role of the Ombudsman’
Office (Defensoría del Pueblo, DP) was central in the legitimation of social
environmental unrest as a public problem and the development of institu-
tions for the prevention and management of socio-environmental conflicts.
A rapidly growing set of literature shows that bureaucratic entrepre-
neurial actors play an important role in the development of state institu-
tions (Dezalay and Garth 2002). Pierson (2004) argues that literature
on institutional change often highlights the role of “institutional entre-
preneurs,” which are well-placed actors with creative abilities to play a
significant role in institutional change (p. 136). The first characteristic
of these actors refers to the source of their influence, while the latter
refers to their strategy (Pierson 2004). In this chapter, we examine both
the source of the DP’s influential agency and its strategy. In analyzing
the source of DP’s influential agency, we highlight the increasing con-
vergence of human right agendas, ideas, and global norms that pressure
over the transformation of domestic institutions.3 The DP is a “national
human rights institution” with a mandate that represents the increasing
influence of a new “human rights” paradigm within the state and the
impact of ideas and norms in international politics (Keck and Sikkink
1998; Adler 1987; Haas 1992; Hall 1989). But the ideas or beliefs do
not matter in a vacuum. They become influential only when they mobi-
lize actions and become institutionalized. Thus, the internationaliza-
tion of beliefs is also articulated through a connection between local and
international actors through networks of transnational activism (Keck
and Sikkink 1998; Rodríguez Garavito et al. 2007). In many crucial sec-
tors of the state, the influential agency of local bureaucratic actors comes
from the international prominence of these normative and epistemic net-
works (Haas 1992). Furthermore, in a context of weak politics and low
institutionalization (Levitsky and Murillo 2009, 2012), these ideational,
epistemic, and semi-informal sources of power and legitimacy can be as
relevant, or even more relevant than other political formal sources.
In analyzing the DP’s strategy, we highlight the DP’s institutional
robustness to undertake the systematic production of statistics about
conflicts, which placed the problem’s magnitude and urgency into pub-
lic debate.4 For Bourdieu (2014), statistics is, par excellence, the state’s
instrument for concentrating “informational capital.” The author explains
how the extraction and use of informational capital and statistics becomes
crucial in the way state actors can transform what is considered a “unique”
problem into a “universalistic” one, a private one into a public one.
Moreover, the process of becoming “universalistic” implies leaving “the
concealed,” or “the invisible” situation of a problem to become visible and
acknowledged (p. 49).5 Statistics, and the DP’s statistical reports, made
highly visible the significance of social environmental unrest in rural areas,
regarding both its massive scale and significant association with extractive
industry activity (which has proved crucial for the country’s political econ-
omy). Thus, the DP’s production of statistical periodic reports was decisive
in the legitimization of civil socio environmental unrest as a public prob-
lem and in the development of institutions that can deal with the conflict
cost of the commodity cycle.
This chapter is organized into five sections. The first is an introduc-
tory section. The second section describes growing civil unrest in Peru
during the natural resources boom. The third section describes previ-
ous institutional arrangements: from norms to regulatory agreements
between “private actors” to the dissemination of roundtables with infor-
mal state participation. The fourth section explains the greater legiti-
mation of the state role in the prevention and management of conflicts
first as a development of the DP and later as a reaction of the Executive
Power to the DP. The fifth section presents conclusions.
2 Socio-Environmental Conflicts and the Dispute

Over Territory
The growth of extractive industries brought a large and rapid economic
expansion and additional fiscal resources on the national and subnational
levels (Arce 2014; Orihuela et al. 2014; Thorp et al. 2012; Arellano-
Yanguas 2011a, b). However, the other face of this economic growth
was an increasing and dynamic local social environmental unrest (Paredes
2016; Li 2015; Paredes and De la Puente 2014; Echave et al. 2009).
In Peru, socio-environmental conflicts progressively emerged after
the beginning of the extractive boom with a peak in 2008.6 Across the
country, conflicts shared similar demands: better environmental regula-
tion, sanctions for environmental accidents, respect for communal land
and water rights, and a better redistribution of extractive income in local
areas of resource exploitation.7 The focus of this chapter is the govern-
ing of local socio-environmental conflict, which occurred between local
communities and actors that intended to invest in extractive industries.
These investments sought to take advantage of the commodity price

boom, mainly minerals (such as gold and copper), that characterized the
Peruvian economy over the past decade. The importance of this extrac-
tive activity for the Peruvian economy is central, as demonstrated by
this book’s introductory chapter. However, this occurred alongside an
increasing local social environmental unrest (Paredes 2016; Paredes and
De la Puente 2014; Bebbington et al. 2013; Arce 2014).
The magnitude of this unrest has not been paralleled in the region (Li
2015). Socio-environmental conflicts reached a critical level at the end
of 2000s. Toward the end of 2004, the DP only registered 109 socio-
environmental conflicts, where only 5% were related to mining. In 2009,
conflicts increased to 267, where 44% were related to mining. In the last
6 years, the number of total socio-environmental conflicts has been rela-
tively stable, however the percentage of mining conflicts has increased.
In 2015, there were 2108 socio-environmental conflicts, of which 67%
were related to mining. Conflicts that are not caused by mining are
mainly associated with hydrocarbons, forest rights, and energy resources.
In summary, socio environmental conflicts have constituted, along with
economic growth, one of the most surprising phenomena of the last dec-
ade.
There is a growing set of literature that explains the causes of these
conflicts and the mechanisms through which they activate.9 Some
authors put emphasis on redistributive causes and local bureaucratic
capacities (Ponce and McClintock 2014; Arce 2014; Arellano-Yanguas
2011a, b), while other authors extend beyond the subject of distribu-
tion and address more socio-environmental issues, the competition for
resources, and the absence of local coordinated economic arrangements
(Helwege 2014; Bebbington et al. 2008; Orihuela et al. 2014; Echave
et al. 2009). Other literature poses aggregation problems of conflicts
and their ability to escalate to the national level because of political party
weakness (Vergara and Melendez 2010) or lack of national social organi-
zations (Paredes 2014, 2016; Vergara 2011b). Even though the study of
local conflicts causes and fragmentation has generated a body of litera-
ture that continues to grow rapidly, the process of state construction that
governs these conflicts within the extractive boom context is less studied.
This chapter analyzes how this institutional process has occurred.
The rural areas with increased social environmental unrest faced
the lack of historical repertoires of state and society action to manage
the conflict cost of the commodity boom.10 Furthermore, the unequal
power distribution between extractive groups, who opposed meaningful

institutions of participation, and weak grassroots actors postponed any
institutional response.11 However, by the end of the commodity cycle,
we can observe an institutional development, which shows the transfor-
mation through which the Peruvian state has undergone while facing a
decade of social unrest linked to the extractive industry. The progres-
sive institutionalization of roundtable discussions, the creation of the
National Office of Dialogue and Sustainability, and the strengthening
of the Ombudsman’ Office’s role are evidence of state transformation
in relation to this problem. These new institutional developments have
limitations and are far from having coherent and effective and definitive
solution to extractive conflicts. However, it is clear that the state toward
the natural resource boom’s end is not the same state that began reforms
to promote the extractive sector in the early 1990s. The aim of this chap-
ter using the Peruvian case is to explain these institutional transforma-
tions. How did the need of conflict institutions become legitimate? And,
what factors or actors have influenced this process of institutional devel-
opment?
3 From Dialogue Between “Private Actors”

to Dissemination of RoundTable Discussions
3.1 The Paradigm of Dialogue “Between Private Actors”

The extractive boom began without the state having a clear function
over enterprise—community relationships upon giving mining conces-
sions (Arellano-Yanguas 2011a, b; Bebbington 2013). Moreover, in gen-
eral the lack of the presence of the state in rural areas left no formal or
informal habit of negotiation with the central government. The conces-
sions model (which was initiated before the take off of the boom, spe-
cifically at the beginning of Alberto Fujimori’s first government in 1990)
was focused on the enterprise—community relationship exclusively. This
model was one of “dialogue among private actors,” and the role of state
was reduced mainly to set a regulatory framework, which had to be
improved to international standards.
Thus, the central objective of the state was to modernize legisla-
tion to reach international standards, in particular in relation to the
Environmental Impact Assessment, EIA (Pulgar Vidal 2008; Lanegra 2008).
These improvements were supported by multilateral agencies like the World

Bank during the first few years of the 1990s. During those years, the Energy
and Mining Technical Assistant Project (PERCAN) was promoted with the
technical assistance of the Canadian Cooperation and with the support of
the World Bank (Pulgar Vidal 2008; World Bank 2005). This project helped
to modernize laws that regulated the concession and license system. Thus,
the Peruvian state established, during the 1990s12 and beginning of 2000s,
a series of regulations in the energy and mining sector that enterprises should
follow on the ground to initiate exploration, exploitation, and extraction
projects.
Until the mid-1990s, there were no participatory mechanisms in the
development of extraction projects for minerals and hydrocarbons. In
the first Environmental Code, approved in 199013 within the context of
Rio Summit, the EIA established parameters14 to promote the participa-
tion of diverse involved stakeholders, with the goal of making extraction
projects viable. However, a year after the Code was approved, many of
its elements were rejected by Legislative Decrees that made international
mechanisms flexible to favor the auditing of operations. Two were espe-
cially important: the Law of Promotion of Investment in Mining Sector
(DL 708, June 1991) and the Marco Law for the Growth of Private
Investment (DL 77, November 1991). Both had as a main characteris-
tic the delegation of responsibility to promote participation (without
making it obligatory) and obtaining a social license for enterprises, but
without involving the state. In addition, with both decrees, the state
paradoxically made the Ministry of Energy and Mining the responsible
agency to promote extractive investment and, at the same time, audit it
(Aldana 2013a, b; Lanegra 2008; Orihuela 2013).
Mechanisms for local participation began to be introduced since
1996. These mechanisms, however, were limited to be part of the EIA
elaboration. In 1996, the MEM proposed guidelines for participation
through EIA technical elaboration guide (World Bank 2005). Between
2000 and 2002, these guidelines became part of regulation for citizen
consultation and participation in the elaboration of EIA.15 Finally, the
2008 guidelines would improve previous versions, recommending that
enterprises (i) disseminate project information in a mandatory way; (ii)
do not only inform the public about the project, but also collect the
population’s opinion; (iii) convince the population of the extractive pro-
ject’s benefits; and (iv) strictly enforce participation protocols (Oxfam
2009).
This gradual construction of regulations for the energy and mining

sector was characterized by involving exclusively enterprises and local
populations. These enterprises and communities should follow regu-
lations and make agreements. In this scheme, state intervention was
reduced to maintaining the normative framework, expecting that enter-
prises and communities would successfully make contracts by their own,
in particular regarding terrain use. The actual exploitation of natural
resources was not in the discussion as the state keeps the rights for sub-
soil use and grants to companies these subsoil rights to explore/extract a
resource.16
These very limited formal rules were insufficient to counteract the
rapid expansion of local conflicts when they appeared even stronger in
mid-2000s.
This dynamic of “dialogue among private actors” became unsus-
tainable as conflicts continued to grow in numbers.17 The regulatory
framework was of international standards, but “on paper.” Rules were
“decoupled” from effective outcomes on the ground (Meyer et al.
1977).18 Communities and enterprises did not negotiate from sym-
metrical positions. “Without teeth” the implementation of modern-
ized rules rapidly confronted the profound asymmetries that existed
between enterprises and communities to negotiate over territory,
water, and other resources use for the extraction of minerals (Bury
2004). Agreements were signed without a satisfied local population
and often signed for a small group of the community in exchange of
“helps” given by the companies. These “helps” were contested in the
long-term driving resentments and division in the whole community
as illustrated by many cases.19 Companies failed to see the impacts of
the projects on a large scale of the territory and to work beyond the
directly impacted community and potential conflicts over the resources
in these territories.
The most important improvements underway regarding local popula-
tion participation and extraction projects were completed only in 2008,
just when socio-environmental conflicts reached their highest peak
(Paredes and De la Puente 2014). This was clearly related to the govern-
ment’s urgency to reduce the number of conflicts. However, regulatory
modernization that was made years ago was not accompanied by a mate-
rialized organizational capacity. There was a great disconnect between
high-level organizational decisions, plans, and environmental policies,
such as the approval of EIA, with the concrete implementation and

efficacious organizational outcomes on the ground. In the mid-2000s,
the General Direction of the Environment (DGMA), responsible for
approving the EIA, only had six professionals to review the documents
sent by companies and a very limited budget to adequately supervise ex
post implementation (World Bank 2005; Orihuela 2014a, b, c, d). That
is to say, mines contracted consulting companies to elaborated the EIA
reports, and state engineers from the DGMA revised these voluminous
reports mostly from “their desks” without field supervision. In this way,
it was impossible for the DGMA to guarantee that the population had
really participated in the EIA elaboration process.
Facing an increasing growth of conflicts, the central government was
obliged to respond to local demands in some form, but it lacked histori-
cal repertoires of dialogue and negotiation to strike up agreements with
the rural population. Moreover, the 1980s was the only decade in which
the country had anything similar to a system of programmatic parties
(Tanaka and Grompone 2009). From the 1990s, political parties became
“coalitions of independents,” politicians that moved from one political
group to another looking for greater political gain without represent-
ing collective demands (Zavaleta 2014). Thus, populations of influential
areas for extractive projects did not have political channels to negotiate
demands that arose concerning these projects.
3.2 The Institutional Legacy from Below, RoundTable Discussions

At a lack of better mechanisms to mediate the relationship between
extractive companies and the local population, the central government
decided to respond to the population’s mobilization through accepting
the installation of “roundtable discussions.” There were other secondary
dialogue mechanisms as “high-level commissions”; however, as Graphic
1 shows since 2008 these spaces for dialogue run in parallel with the
manifestation of conflicts (Fig. 1).
The establishment of these roundtable discussions illustrates how insti-
tutional development is a continuum, where institutional forms of the
past come to serve other objectives in the present (Mahoney and Thelen
2010, p. 17). Local roundtable discussions were an adaptation of regional
and national level blueprints of political elites negotiations (mayors, politi-
cians, civil society representatives, bureaucrats, union leaders) to a dialogue
with grassroots communities in rural areas. The roundtable discussion
Fig. 1 Civil unrest and dialogue processes (2008–2013). Own formulation.

Source Ombudsman’ Office. Civil Unrest Report N° 118, Dec. 2013
arose toward the end of the 1970s and was reproduced in the 2000s.
Roundtable discussions were originally forged when new regional political
actors looked to have protagonist roles in the country within a context of
extensive administrative centralization (Henriquez 1999).20 Regional gov-
ernments were not installed until 2002, a year in which there was the first
election to elect regional presidents. During the previous period, regions
had scarce governmental and administrative power. During the 1990s, this
dialogue model was reproduced facing the crisis of political parties and
organizations on the national and regional level (Tanaka and Grompone
2009). International organizations such as USAID, and civil society, began
to promote the formation of RoundTables for the Fight Against Poverty,
which intended to channel the regions’ social demands in a context of
political participation deterioration (Fischer 2012; Huamaní et al. 2012).
The central government looked to resolve disputes and demands of local
communities and populations against extractrive industries companies by
installing these roundtable discussions, in particular in the zones where con-
flict reached the highest levels of violence. Normally, for a roundtable to be
installed, the local population had previously requested the presence of high-
level state actors to represent the Presidency. Even though the normative
framework noted that the agreement should occur between the enterprise
and local population, communities demanded direct dialogue with high-level
functionaries to assure a more serious compromise would be reached (De
la Puente 2016; Echave et al. 2009; Echave and Keenan 2005). The search
for direct dialogue with central government authorities can be understood,

according to Ballard and Banks (2003), as a strategy of local communities to
diminish uncertainty of reaching the state effectively through more conven-
tional channels of communication. These channels are normally ineffective
and almost nonexistent, requiring a considerable amount of time and high
organizational costs.
The establishment of these roundtable discussions illustrates
the importance of historical repertoires of state and society action.
“Roundtables” were a legacy of the past. These mechanisms of regional
and national negotiation emerged in a context of extensive administra-
tive centralization and precarious party system. Roundtable discussions,
additionally, were always associated with the threat of regional protest.
In accordance with Helmke and Levitsky (2006), these roundtable dis-
cussions were formed as informal institutions, connecting civil regional
society and the central state to open spaces for negotiation with the par-
ticipation of political actors with high decision power. These institutions
are neither considered part of the formal rules that govern the devel-
opment of extractives, nor do they follow formal rules to regulate their
performance. However, because they are known repertoires, they are a
“known practice” expected and reproduced by state and society actors
(Hall and Taylor 1996).
However, the translation of the regional roundtable model to a model
for negotiation with grassroots communities in rural areas proved insuffi-
cient and did not resolve the problem of unrest. The use of these round-
tables as a representative channel contributed to impede the escalation
of violence in conflicts, but the solution was temporary. First, unlike the
regional roundtable discussions that had an agenda for political and fiscal
decentralization, these local roundtables did not guarantee the construc-
tion of stable and permanent institutions that can prevent problems and
discontent on the local level. These roundtables were not prepared to
attend to the multisector demands historically accumulated by rural com-
munities and the new problems that arise with the presence of extractive
projects. For this reason, in various cases, in spite of the conformation
of a roundtable, the conflict revives many times over the course of an
extractive project’s life (Orihuela and Paredes 2014).21 Second, local and
mainly rural roundtables are spaces that do not guarantee the equality
of conditions for negotiation among different actors, especially among
rural communal leaders and “experts” or “technicians” of the enterprise
and state (Li 2015; Orihuela and Paredes 2014). Regional roundtables
in the past counted on regional civil society organizations, experienced

leaders, and active domestic NGOs (Henriquez 1999). In the case of
local “roundtables” solving extractive conflicts, many agreements were
made under the pressure of the companies and certain agencies of the
state and accepted by communal leaders without being convinced or
entirely understanding the agreements (De la Puente 2016).22 This is
mainly the case concerning environmental issues where the problems and
proposed solutions are complex and discussed in a distrustful environ-
ment as communal leaders and company and state experts have unequal
level of expertise on the technical issues. Finally, roundtable discussions
do not have standardized protocols regarding participants, methodol-
ogy, or objectives. Despite all these problems, these tables have impeded
the escalation of violence in conflicts and without formally involving the
state. During the dialogue processes, state actors make compromises,
sign acts, and make promises in a “ritual” way, but without binding char-
acter (Huamaní 2015). Without many incentives for resolving the causes
of the conflict, the unfolding result is the resurgence of the conflict when
companies try to carry on with their operations.
4 The Formalization of the State Function

Regarding Socio-environmental Conflict
Our account of how institutions regulate emerging socio-environmental
conflicts highlights the crucial role of state actors as institutional entre-
preneurs in the 2000s. In a context of party weakness, state actors work
embedded in normative and epistemic networks and in fact, actually
have the possibility to trigger, shape, and defend institutional reform in
gradual ways (Vergara and Encinas 2016). Crucial in our explanation is
the way in which state actors have used their expertise and knowledge
to trigger reform and to keep it alive, despite the opposition of power-
ful economic interest and weak grassroots actors. Particularly, we argue
that the construction of the legitimized public function of managing civil
unrest in Peru had its impulse in the role of the Ombudsman’ Office.
First, the DP acted in a context of increasing legitimized global agenda
for local participation on extractives investments. Second, the DP with
an international recognition and solid influence counterbalanced the
opposition of powerful economic interest and created the impulse for
the translation of this agenda into the country. Third, DP’s statistical
strategy made socio-environmental conflicts and their association with

extractives sharply visible and public, and this statistical reporting marked
a tipping institutional point without reversal.
1. A global agenda for participation in the field of extractives

In the 1990s, when the government began to encourage the expan-
sion of extractive activities in Peru, the global debate regarding
enterprise—community relationships in the context of these indus-
tries was already very dynamic. The elaboration of new norms and
guidelines expressed a dynamic process of institutional isomorphism
(Di Maggio and Powell 1983) in the field of extractives (Orihuela
2013). International actors constructed a series of norms and
guidelines, as shown in Table 1 (see Table A3.1 in Annex 3), of best
practices of enterprise—community relationships that propose a
more active state role. This section explains how international agen-
cies and the extractive industry looked to regulate the relationship
of multinational enterprises with local populations by institution-
alizing practices in the direction of increasing compatibility across
countries.
Although it was widely recognized that mining and hydrocar-
bon industry was capable of significantly reducing environmen-
tal and social impacts with the use of new technology and the new
organizational models, the limits of the implementation of this
technologies and organizational models also became evident with
the internationalization of cases of environmental conflict with
local communities, such as Oki Tedi in Papua New Guinea (Kirsh
2014).23 With this case, for the first time, a transnational network
of activists in this topic emerged (Kirsch 2014). Transnational net-
works of activism was formed toward the end of the 1990s as an
intermingled of international organizations coordinating “across
borders” in relation to the local impacts of extractive industries.24
The amount of income that these industries give to the state in
an unregulated context produced another important international
opportunity for the action of international activist networks over the
extractive issue. African cases were characterized more so by gener-
ating significant problems of corruption and political violence (Le
Billon 2008). International actors began a campaign to commit
states to providing transparent information about the source and use
of resources coming from extractive industries, “Extractive Industries
Transparency Initiative” (EITI) (Morgandi 2008). These develop-

ments coincided with the time multinational extractive companies
expanded their borders toward the Pacific and, in particular, Latin
America at the beginning of the 1980s (Ballard and Banks 2003).
As it become evident that extractive industries had a conflictive
relationship with local communities, a global agenda toward strict
norms that should be established to decrease these conflicts was ris-
ing. This process went hand in hand with the environmental crisis
toward the end of the 1980s (Kirsch 2014),25 which authors call
the “resource wars” (Gedicks 1993 cited by Kirsch 2014) and inter-
national recognition of indigenous rights. A demonstration of this
was the Operational Manual Statement (OMS 2.34), of the World
Bank, titled “Tribal People in Bank-Financed Projects”: the World
Bank was the first multilateral financing institution that adopted
protective policy for indigenous peoples, considering their informed
participation, an important element in the development of plans
for every financed project that would affect them (Sawyer 2004).
Previously, since 1974, the United Nations produced in 1983 and
1990 the “Guidelines for Multinational Enterprises,” where they
looked to establish international standards for multinational enter-
prises (Sawyer 2004). Thus, in the 1990s, a crisis of trust toward
enterprises emerged (Kirsch 2014) and, on the other hand, an
empowerment of the indigenous and environmental movement on
the transnational level (Sawyer 2004).26 The result of environmental
and indigenous activism brought various parts of the world to con-
struct diverse figures of citizen participation that intended to avoid
conflict between local communities and extractive enterprises.27
The consolidation of Global Compact, a leading organism on
the international level for establishing norms and responsibilities
of enterprises regarding human rights, marked a moment in the
global agenda. The necessity for multinational enterprises (includ-
ing extractives) of having communication mechanisms of “ebb and
flow” with stakeholders in a preventative and proactive way became
evident (United Nations 2003). Given the experiences in Africa
and Asia, this process also disseminated the need for states on the
global level to be recognized as key agents for the prevention
and management of conflicts generated by the presence of mul-
tinational enterprises (Ballard and Banks 2003). For Howitt
et al. (1996, cited in Ballard and Banks 2003), the “three-legged
stakeholder model” had been widely diffused; this model consists of

the state, enterprise, and community as central agents in the insti-
tutionalization of mechanisms to slow down impacts of large-scale
extractive activities.
This debate was brought to Peru through networks of transna-
tional activism and also, but to a lesser degree, by the same inter-
national enterprises through its plans for community relations and
social responsibility (Bebbington 2004; Himley 2013). Various
NGOs working with communities suffering the impacts of min-
ing (Tambogrande, Espinar, La Oroya) began to meet informally
in Lima to share experiences about extractive industry expansion,
in particular mining within Andean highland communities (Scurrah
2008). Toward the end of the 1990s, these Lima-based NGOs
opened contact with international organizations, thus building sig-
nificant transnational connections and networks (Scurrah 2008).
These organizations included Oxfam International, Mineral Policy
Center, which later became Earthworks, and The Environmental
Mining Council of British Colombia (Vancouver), among others.
The connection of these networks significantly brought specialized
information of international environmental standards and participa-
tion practices elsewhere to the national debate.
Despite the existence of this global agenda, the developments
of mechanisms of local participation in extractive operation were
slow. The Executive insisted that formal rules governing extractives
were high in international standards and appropriate for an optimal
agreement among “private parties” (communities and enterprises).
However, the escalation of conflicts against important extractive
projects showed the opposite. Emblematic cases in the country
were Tambogrande, Cerro Quilish, Conga, and Espinar (Echave
et al. 2009; Bebbington 2013; Paredes and De la Puente 2014).
The Ombudsman’ Office, well linked with the international cooper-
ation, multilateral agencies, human rights groups, and activist com-
munities, enjoyed an influential position to drive the translation of
global agendas of participation and consultation in the country.28
2. The influential position of the Ombudsman’ Office
The Peruvian bureaucracy is by no means characterized by its
Weberian capacity. The Ombudsman’ Office remains an exceptional
actor in Peru for its excellence (Goodman and Pegram 2012).
The DP is a “national human rights institution” (NHRI), and its
mandate represents the increasing influence of a new human rights

paradigm within the state and the impact of ideas and norms in
international politics (Risse and Sikkink 1999; Adler 1987; Haas
1992; Hall 1989). Since its creation in 1993, the DP has had an
autonomous position within the Peruvian state apparatus to com-
plete its functions.29 When the DP was designed, it was conceived
as an organism independent of other state powers (Executive,
Legislative, and Judicial). With time, this autonomy (especially from
the Executive) would permit the DP to earn a reputation as one of
the state agencies with greatest liberty to act and credibility of the
general population. This credibility was crucial for officials of the
DP to gain the trust of the people and access.30
Our argument is that the “entrepreneur” role of the DP was
central in the formalization of state involvement in the preven-
tion and management of conflicts. The DP had influence and an
effective strategy to achieve the legitimization of social unrest as a
public problem. First, the Ombudsman’ Office inserted itself into
a network of transnational activism for human rights, defending
indigenous people’s rights and communities in zones of influence
on extractive projects.31 With this strategic positioning in the net-
work, and an inner knowledge of the state and international rec-
ognition, the DP became involved every time a little more and
with greater frequency in the policy of preventing and managing
civil unrest. In a process of unique institutional expansion for the
region, the DP in Peru ended up playing roles of registration,
auditing, and civil unrest mediation. Second, the DP put in place
an effective strategy of registration and statistical monitoring,
which was crucial to create awareness on civil unrest as a public
problem.
The Ombudsman’ Office is a unique institution. It was cre-
ated formally with the Constitution of 1993 and was a space
where diverse political actors met looking to resist Fujimori’s
authoritarianism during the 1990s. Paradoxically, its creation was
related to the need of Fujimori’s government to legitimize itself
before the international community that had seriously ques-
tioned its treatment of human rights within the country (Pegram
2008; Burt 2009). Fujimori did not see the DP as a threat to his
regime, and ended up letting lawyer specialists in human rights
rewrite its regulations (Goodman and Pegram 2012). Thus, by
constitutional mandate, the Ombudsman’ Office has an autono-

mous budget; also, the election of the Ombudsman, the institu-
tion’s head, requires majority approval of Congress. With the
passing of time, the DP became an alternative for significant audit-
ing of Fujimori’s government, given that the press and judicial
power were co-opted (Goodman and Pegram 2012). During this
period, the DP won legitimacy of the population by receiving com-
plaints and publicly denouncing the government’s abuses of human
rights and regime’s growing corruption. As Abad remembers: “The
Ombudsman’ Office is the state, but not a traditional state (…)
beyond supervising the state apparatus, it has a human rights per-
spective that is different (…).”32
A key aspect of the capacity of the DP is that with a modest but
autonomous budget, and with an unusual bureaucratic development
in Peru, the DP was able to construct and strengthen a decentral-
ized administrative apparatus. Much of this construction was prod-
uct of the first Ombudsman’ leadership, Jorge Santisteban, a man
who had international cooperation experience and an enormous
expertise in human rights affairs and diplomacy. As Abad remem-
bers: “the head is really important, because it holds and guides
the institution.”33 According to Rolando Luque, former official
of the DP, Santisteban recruited many human rights lawyers from
the Truth and Reconciliation Commission formed after the fall of
the Fujimori authoritarian regime. These lawyers learned about the
truth of the armed conflict from testimonies coming from the most
remote rural areas. They also understood the importance of the
DP presence and contact with local organizations that can sustain
the flow of information in order to prevent or react rapidly against
human right abuses in these areas.34 Thus, in order to adequately
complete its functions, the Ombudsman’ Office deployed 38 decen-
tralized offices from very early in the new century. According to
Lanegra, former DP official and Vice-Ministry of Intercultural
Affairs, DP’s autonomy allowed it to take initiatives in issues in
which other entities of the state apparatus were paralyzed.35
3. Statistical Registration and the Construction of a Public Problem
The Ombudsman’s mandate, since its creation in 1993, is to reg-
ister occurrences or situations that can threaten human rights and
social peace of the country.36 Thus, between 2003 and 2004, the
DP thought it necessary to alert civil society and the state regarding
increasing socio-environmental conflicts. Between 2004 and

2006, the DP began to produce a monthly report of civil unrest
in Peru (Ombudsman, 2012). In late 2006, a special Civil Unrest
Unit within the DP was created, reaching maturity between 2008
and 2009.37 Finally, in 2009, the Unit for the Prevention of Civil
Unrest and Governance was created as a permanent office regard-
ing this issue.38 Today, the Ombudsman’ Office has a more effec-
tive institutional apparatus for the prevention, mediation, and
registration of civil unrest. In addition, it is a mandatory reference
to approach the problem of civil unrest in the country for academia
as well as civil society.
As we mentioned before, the organizational strength of the
Ombudsman’ Office is a key part for efficiency and high level of
bureaucratic performance. Thirty-eight decentralized offices were
fully functioning many years before the extractive boom began
and thus way before the emergence of civil unrest.39 In this way,
the decentralization process provided the DP with capacity to begin
and sustain statistical registration when the context demanded it. In
words of Luque: “we realized that the centres of power were com-
pletely uninformed about the national context, and also, that new
conflicts could occur anywhere, anytime.”40 In the search to sys-
tematize social unrest, decentralized offices were a key for statistical
information within the country. It was also a key for the collection
of information that DP functionaries, the majority being lawyers
associated with human rights issues, used to reconstruct social net-
works of information that were important for the human rights
movement during the times of armed conflict.41 These networks
included NGOs, church communities, and professionals dedicated
to gathering this information.42
The DP’s statistical registration rapidly had a public effect. There
is vast media evidence that DP statistics caused a crucial impact in
public debate.43 The initial diffusion of reports was done through
the DP’s institutional platforms and slowly captured the media’s
attention. It showed the magnitude and escalating number of con-
flicts, as well as violence indexes in every one of them. The DP
produced a series of reports with these statistics, with the goal of
understanding in a more systematic way the causes, characteristics,
and frequency of civil unrest in Peru. Later, the DP developed a
typology through which it characterized conflicts and started to sys-
tematically report them monthly.44 As Gusfield (1981) states, the
construction of the public problem tends to be associated with the

“statistical” presentation of the problem as a situation of a general
character and associated with the nation’s interests.
The Ombudsman’ Office does not only play a role of registra-
tion and monitoring. While it was being called by the population to
serve as guarantor in conflict zones, it specialized in the mediation
of conflicts.45 Upon making systematic use of roundtable discus-
sions with the central government (which conceded with an explicit
request of local populations), the Ombudsman’ Office intends
to support the development of these mechanisms. By 2012, the
Ombudsman’ Office had intervened as a mediating agent in 2031
opportunities (Defensoría del Pueblo 2013). By 2013, of these 83
dialogue processes registered with 170 conflicts in this year, the
Ombudsman’ Office participated in half of these created roundtable
discussions (Defensoría del Pueblo 2014). These represented 68%
of the mentioned dialogue mechanisms for 2013.
As a consequence, the DP obtained an unusual level of support
from the population during this period. In 2009, in the context
of culminating social unrest, the 5th Annual Confidence Survey of
Institutions (Lima University 2009) revealed that almost 50% of
those surveyed responded that they trusted the DP’s work. This put
it way above municipalities, Public Ministry, police, Constitutional
Tribunal, National Auditing Office, Executive Power, Judicial
Branch, and Congress. Over the years, the tendency does not seem
to change. In 2013, IPSOS Apoyo completed a survey to measure
trust in institutions and 45% of the population followed suit, giving
this high level of approval to the DP once again. In a country where
the Executive only has 17% approval and Congress is disapproved
by 83% of the population, these popularity levels give to the DP a
high level of legitimacy and backing by the population.46
The DP, as we have already pointed out, is a state entity autono-
mous from the Executive. Its innovative and pioneer role regarding
civil unrest obliged the Executive to react. Information about civil
unrest presented by the DP in its monthly reports showed the govern-
ment as useless and inactive while facing a problem of great magnitude
each time larger and with higher levels of violence. Facing the magni-
tude of the problem presented by DP information, the new govern-
ment of Ollanta Humala in 2011 looked to generate its own sources
of information and statistics. The Executive’s first attempts to confront
conflict were minimal and had to undergo changes over time.
Fig. 2 National office of dialogue and sustainability and previous attempts.

Source Presidencia del Consejo de Ministros. “Institucionalizando el diálogo.
Experiencias y aportes de la ONDS—PCM 2012–2013” (p. 16)
Thus, in 2012, the Presidency of the Council of Ministers created

the National Office of Dialogue and Sustainability (Oficina Nacional
de Diálogo y Sostenibilidad, ONDS).47 As shown in Fig. 2, the initi-
atives of the Executive to have an office responding to conflicts were
initiated by the Alejandro Toledo’s (2001–2006) government as well
as that of Alan Garcia (2006–2011). However, these initiatives never
developed a sufficient capacity. The Strategic Unit of Analysis and
Prevention of Civil Unrest of the PCM (2004), as well as the Unit
of Analysis of Conflicts of CEPLAN (2005–2006), and the Secretary
of Coordination of the PCM (2008) were institutional experiments
that failed (see Graphic 1). The consequence of this failure explains
the weak capacity to anticipate and mediate in major conflicts: el
Arequipazo (2002), Tambogrande (2003) el Quilish (2004), Majaz
(2005), and Espinar (2005), among others (PCM, 2013).
4. The formation of ONDS and the future institutions to manage the
conflict cost of resource booms
With the creation of ONDS, the dispute for which institution
(the DP or the ONDS) had the correct statistics began. The first
director of the ONDS was Vladimiro Huaroc, former regional
president of the Department of Junín and functionary of the Inter-
American Commission on Human Rights.48 Under his leadership,
the ONDS produced a new report (Report Willaqniki)49 differ-
ent than the DP’s. For the elaboration of this report, the ONDS
established their own methodology of counting conflicts and con-
structed its own definition and categorization of conflicts. The
result was a smaller number of registered conflicts than those reg-
istered by the DP. For example, in November 2012, the number of
registered conflicts by ONDS was 66 with 30 cases of prevention,
while as the DP registered close to 200. The ONDS, similar to the
DP, participated in roundtable discussions looking to be an official

mediator between the state and communities. It had participated in
50 roundtable discussions by December 2013.
The difference in figures between the reports of the Ombudsman
and the Willaqniki Report generated a heated public debate in the
media, which echoed into national academia dialogue. Some mem-
bers of civil society and personalities of the church praised the cre-
ation of ONDC and the Willaqniki Report as a demonstration of
state willingness to dialogue. For Monsignor Cabrejos, one of the
discussion facilitators in Cajamarca alongside Father Gaston Garatea
in 2012, the creation of ONDS was a “transcendental gesture of
the Peruvian government.”50 However, this was not so simple for
other members of civil society. The public wondered why social
unrest had declined so dramatically in such a short period of time.
The main inquiry made of the Willaqniki Report was a distortion of
its methodology for government political reasons with the objective
of reducing the number of active conflicts.51 Even the press associ-
ated with the conservative right-wing questioned the numbers and
methodology utilized by ONDS to produce Willaqniki. For Juan
Arroyo, CSR director at the Centrum Católica, with the Willaqniki
Report and the differences with DP results “the compass of how
much civil unrest exists in Peru” was lost.52
The authorities of both institutions (ONDS and DP) did not
delay in publicly addressing the controversy. For the Executive,
with Huaroc as head, the smaller number of conflicts registered
by the ONDS was an indicator that the magnitude of the problem
was exaggerated in the DP’s counts. On the other hand, Rolando
Luque, of the DP, opened debate with the government over
media regarding the elaboration of statistics and classifications.53
The result of this debate was that the state, for first time, openly
adopted a new role intervening in socio-environmental conflicts.
In sum, with the creation of the ONDS and open discussion over
the problem’s magnitude, the state made official its role of pre-
vention and management of conflicts within the Executive.54 This
occurred as a reaction to the DP’s enterprising work (statistical
elaboration, participation in roundtable discussions, etc.), which
stated that upon facing the escalating magnitude and violence of
conflicts, the Executive was absent and silent. For Rolando Luque:
“The Ombudsman became an island of dignity, even though we did
received external pressure and even treats, we kept doing our job.”55
However, the ONDS located in the PCM was unable to construct

the bureaucratic capacity that the DP consolidated in the last dec-
ade to make its own statistics. Thus, the ONDS was incapable of
sustaining the production of periodic statistics on the national level.
The office produced only 38 reports of conflicts, while the DP had
produced 142 by December 2015. The DP continued to be the
official and most legitimate source for measuring the level of unrest
in the country, with its reports constituting the foundation of state
political analysis, enterprises, and academia. Even if the ONDS con-
tinues to produce Willaqniki reports, the main reference (for aca-
demia and civil society) is still the Ombudsman’ Office. To date,
the DP not only monitors, but also mediates and prevents conflict,
while the Executive continues to intervene through the system of
roundtable discussions.
5 Conclusions
In Peru, the last decade was characterized by the spectacular growth in
exports from extractive industries. The other face of this growth was
high local civil unrest. However, as observed throughout this chapter,
the state has passed from a “hands-off” approach to civil unrest to an
active one. This chapter constitutes an effort to understand how the state
transformed itself to address this problem.
After a first phase, in which the state limited its action to providing
formal rules, basically laws, so that disputes could be arranged in a “dia-
logue among private actors,” a new institutional framework was slowly
developing for the management of social unrest. The rapid growth of
conflicts between 2004 and 2008 instigated different phases of insti-
tutional building to address this new social phenomenon that directly
affects political economy and governance of the country. The institution-
alization of roundtable discussions, the reporting of the DP regarding
social unrest and the creation of a public problem, and the creation of
ONDS are evidences of gradual institutional change.
However, the building of institutions does not arise out of nothing.
Public problems are social constructions that legitimized and regulated
state action. This chapter argues that the DP’s role as institutional entre-
preneur was to make civil unrest a public problem and to translate a global
agenda of participation and consultation toward the solution of these con-
flicts. After the public acknowledgment of socio-environmental conflicts as
a public problem, an entire set of institutional transformations developed

alongside. The DP’s strategic positioning within a transnational activist
network, its links with international cooperation, and alliance with inter-
national human rights groups placed the DP into a privileged situation
within the state to promote reforms.
In addition, the ability to collect statistics on the national ground and
produce monthly reports on civil unrest showed robustness as an excel-
lent bureaucratic institution. Facing this, the Executive had to react and
undertake a certain number of actions to consolidate its own organiza-
tional capacity for the management of conflicts. The creation of ONDS
and publications of the Walliqniki Report (which is now on report num-
ber 42) are proof of this. An important indicator of how socio-envi-
ronmental conflicts became a legitimate public problem was the debate
regarding the methodology for the counting of conflicts. After the many
reports published by the DP, no one questioned the state’s role in alle-
viating civil unrest, but the question was on how to define and count it.
Little by little, extractive conflict became recognized as a public problem
that requires state intervention, and today, practically no one questions
state action and the development of institutions regarding social unrest.
This chapter concludes that state constructions and institutional
transformations are nonlinear processes. They are gradual processes that
involve conflict among many different actors. The institutional corpus to
deal with the cost of the commodity cycle that was formed during the
extractive boom decade continues to be fragmented, overlapped, and still
insufficient. However, state transformation (although imperfect) is unde-
niable. Even though the construction of the governance of civil unrest
has been late and disorganized, it was the result of the impulse of insti-
tutional entrepreneurial actors embedded in transnational networks of
advocacy.
Notes
1. The last natural resource boom in Peru includes the period between 2004
and 2014. However, the transition to modern mining and large private
investment began with the first government of Alberto Fujimori (1990–
1995). For further analysis and research, see Fabianna Li (2015), Thorp
et al. (2012), Arce (2014).
2. For further research and literature on civil unrest and conflict manage-
ment, see Echave et al. (2009).
3. Institutional isomorphism has been increasingly the outcome of organi-

zational networks operating in a “field” of action (Powell and Dimaggio
1983). Nonetheless, institutional isomorphism do not guarantee the
building of meaningful and effective institution (Hironaka and Schofer
2002).
4. Since March 2004, the Ombudsman’ Office began a systematic project
to monitor and register conflicts within the country. For greater detail of
this history, see Defensoría del Pueblo (2014): “Violencia en los conflic-
tos sociales- Informe Defensorial N° 156.”
5. In studying how the lack of housing became legitimized as a public prob-
lem in nineteenth-century England, Gusfield (1981) states that statistics
provide “scientific,” “logical,” and “universal” backing to what was previ-
ously only a private problem or particular political position.
6. The importance of extractive industries for the Peruvian economy is a key.
However, this activity has coexisted since 2004 with an increase in civil
unrest. Today, 210 civil unrest are active in Peru. Out of this number,
67% are related to mining. Conflicts that are not due to mining are asso-
ciated with oil, forest, and energy activities (Defensoría del Pueblo 2014).
Socio-environmental conflicts and economic growth have constituted one
of the more interesting social phenomena within the last decade in Peru.
7. To guide further research over the causes of civil unrest, see Paredes and
De la Puente (2014) for a summary of this literature.
8. The reduction in the number of conflicts is in part related to the effort
made in the second part of Humala’s government after initial failures.
This point will be discussed in further detail in the following sections of
this book.
9. For a summary of these explanations, see Paredes and De la Puente
(2014).
10. Interview with Rolando Luque, former DP official (2014).
11. Interview with former DP, Samuel Abad (2014) and official Alicia Abanto
(2013).
12. Changes made in mining legislation during the beginning of Alberto
Fujimori’s first government (1990–1995) were driven as part of a pack-
age of measures linked to structural adjustment with the Washington
Consensus and the demands of multilateral organizations like the World
Bank and International Monetary Fund (Pulgar Vidal 2008; Lanegra
2008).
13. Codigo del Medio Ambiente y de los Recursos Naturales-DL 613-90-
CMA.
14. Additionally (Banco Mundial), the tools established under this decree
included: (i) Environmental Management and Adaptation Plans (Planes
de Adecuación y Manejo Ambiental—PAMA); (ii) Environmental Audits
to monitor and supervise the adequate implementation of PAMA; and
(iii) Environmental Impact Assessments (these instruments will be ana-

lyzed in further detail below). Supervision of these instruments was
assigned to the General Directorate of Environmental Affairs (DGAA—
established in 1992) and to the General Directorate of Mines in MEM42.
15. Resolución Ministerial N° 728-1999-EM/DM del 30 de Dic (entró en
vigencia en el 2000) y la Resolución Ministerial N° 596-2002-EM/DM,
“Reglamento de Consulta y Participación Ciudadana en el Procedimiento
de Aprobación de los Estudios Ambientales en el Sector Energía y Minas”
[Quieren que yo traduzca esto?].
16. Artículo 66 de la Constitución del Perú. [Quieren que yo traduzca esto?].
17. The increase in civil unrest has been registered not only in Ombudsman’
Office reports. The press (El Comercio, La República) and the update of
news by the National Mining, Oil, and Energy Society show an increase
in cases of socio-environmental conflict in the country as well as the
need for more concrete state action. See http://www.snmpe.org.pe/
busqueda-avanzada.html?searchword=defensoría%20pueblo&ordering=o
ldest&searchphrase=all&limit=0 (consulted February 17, 2016).
18. Decoupling refers to the disconnect between high-level organizational
decisions, plans, and policies with concrete implementation and effica-
cious organizational outcomes “on the ground.”
19. See, for instance, the case of Tambogrande (Paredes 2008).
20. Henriquez (1999) recognizes that this process was clearer in urban zones
through the formation of class organizations (such as labor unions).
However, she emphasizes the role of regional agencies as well.
21. One of the most emblematic cases in which more than one roundtable dis-
cussion was installed, where despite agreements conflict remains latent to
date, is Tintaya, Espinar. The press recognized the roundtable’s accom-
plishments between BHP Billington and the communities in 2005; how-
ever, these agreements were not honored and new roundtable discussions
were held, but still unable to eliminate the conflict. See “Expectativas de la
población frente a las mineras se han incrementado. Minera Tintaya logra
acuerdo con población vecina mediante mesa de diálogo” El Comercio,
printed version, March 25, 2005. “Mesa de Diálogo en la provincia de
Espinar Cuzco 2013-2014” Oxfam, CooperAcción September 2014.
22. De la Puente forthcoming.
23. For almost 20 years, since 1984, BHP Billinton had spilled 90 tons of
mining residue in the river of Oki Tedi, impacting the health of close to
50,000 people.
24. For Keck and Sikkink (1998), these networks exercised pressure over the
nation-states by acting over other nation-states that could exercise condi-
tionalities and multilateral organisms. The most important networks iden-
tified by the authors are those of human rights, environmental activists,
and gender.
25. Among the most important agreements are ILO Convention 169

“Indigenous Peoples and Tribes” and the Rio Treaty where it defines pre-
cepts as: “the environmental issues are best handled with participation of
all concerned citizens […] each individual shall have appropriate access to
information […] and the opportunity to participate in decision-making
processes. States shall facilitate and encourage public awareness and par-
ticipation.”
26. Here it is important to note how enterprises are complex actors, but at
the same time rarely studied in this process. Authors such as Ballard and
Banks (2003) show that multinational mining enterprises possess inter-
nal and institutional dynamics that impact their relationship with the state
and communities. Beyond literature of “corporate culture” and “manage-
ment,” today it is important to consider: “the effects of the new share-
holder-driven capitalism on organizational behaviour (Emel 2002) and
the role of institutions and individual investors in shaping corporate deci-
sions (Evans 2004).”
27. Some examples of best practices include: Land Councils in Australia
(Altman and Levitus 1991), Land Groups in Papua New Guinea
(Weiner 2001 in Ballard and Banks 2003), and Community Foundations
in Indonesia (Ballard and Banks 2003). Among its main character-
istics is direct dialogue between enterprises and affected communi-
ties. For Ballard and Bates (2003), the development of agreements
with communities is a practice “almost already standardized” in North
America, Australia, and Papua New Guinea (see Howitt et al. 1996; O’
Faircheallaigh 2002 in Ballard and Banks 2003). However, it is not a
lineal process, and states such as Australia and Canada have limited the
rights of indigenous communities to negotiate the terms for extraction
(Ballard and Banks 2003).
28. Interview with Alicia Abanto (2013) and Ivan Lanegra (2008).
29. Interview with former DP, Samuel Abad (2014).
30. Interview with Alicia Abanto (2013).
31. Interview with Rolando Luque (2014), Hernán Coronado (2015), and
Alicia Abanto (2014).
34. Interview with Ruth Luque (2014).
35. Interview with Ivan Lanegra (2008).
36. Interview with former official Rolando Luque (2014).
37. Through the Law of Organization and Functions approved on September
30, 2006.
38. Through the Defensorial Resolution N° 019-2009/DP, published in the
newspaper El Peruano on April 30, 2009, which modified the ROF of
the institution.
39. Interview with Samuel Abad (2014).

40. Interview with Rolando Luque.
41. Interview with Miguel Jugo (2015), Hernán Coronado (2015), and
Samuel Abad (2014).
42. Interview with Ruth Luque (2014) and Francisco Soberón (2015).
43. The written press also began to eco the Ombudsman’ work: “Primer
Balance de la Defensoría del Pueblo en el año” El Comercio, Printed ver-
sion on March 7, 2005.
44. See: http://www.defensoria.gob.pe/conflictos-sociales/home.php.
45. Interview with Rolando Luque (2014).
46. IPSOS Survey February, 2016.
47. The creation of the National Office of Dialogue and Sustainability, under
the auspice of PCM, on October 25, 2012, obeys a clear intention of
Ollanta Humala’s government to take a different focus in action regard-
ing social unrest in the country (Moscozo et al. 2014). His first two
ministry cabinets had to step aside when premiers (Lerner and Valdez)
presented resignations given that the crisis of socio-environmental con-
flicts reached high levels of violence.
48. Interview with Vladimiro Huaroc.
49. Popularizado por la prensa como el “Informe Huaroc.” See: http://
diario16.pe/columnista/6/javiertorres/2185/el-informe-huaroc-
willaqniki.
50. See http://larepublica.pe/01-08-2012/monsenor-cabrejos-creacion-de-
oficina-nacional-de-dialogo-y-sostenibilidad-es-trascendental.
51. See http://larepublica.pe/15-11-2012/huaroc-gobierno-tendra-observa-
torio-de-conflictos.
52. See http://www.defensoria.gob.pe/blog/el-monitoreo-de-conflic-
tos-diferencias-entre-los-reportes-de-la-defensoria-y-de-la-pcm-2/
Article published in the newspaper El Comercio (24 de abril del
2013).
53. See http://diario16.pe/columnista/6/javiertorres/2267/el-con-
flicto-no-es-un-juego-de-palabras and https://redaccion.lamula.
pe/2013/01/19/y-huaroc-como-lo-hizo-por-carlin/jorgepaucar/.
54. See http://gestion.pe/politica/centrum-se-ha-perdido-brujula-sobre-
cuantos-conflictos-sociales-hay-peru-2058344.
55. See http://www.defensoria.gob.pe/blog/el-monitoreo-de-conflictos-
diferencias-entre-los-reportes-de-la-defensoria-y-de-la-pcm-2/ Article
published in the newspaper El Comercio (April 24, 2013).
56. See http://larepublica.pe/01-08-2012/monsenor-cabrejos-creacion-de-
oficina-nacional-de-dialogo-y-sostenibilidad-es-trascendental.
57. Interview with Rolando Luque, former official of the DP.
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University.
Lorena de la Puente is a sociologist from the Pontificia Universidad Católica

del Perú. She has a master degree from Oxford University (St. Antony’s
College). Her research focuses on the governance of extractive industries, social
conflicts, and political-institutional studies. She coauthored “Protestas y nego-
ciaciones socio-ambientales: el caso de las industrias extractivas” in CISEPA-
PUCP 2014) and most recently authored “Un Avance Transformador: La
Ampliación del Aeropuerto Internacional Jorge Chávez y el Reasentamiento del
Asentamiento Humano El Ayllu” in Debates en Sociología. Currently, she works
for the Natural Resource Governance Institute in Peru.
CHAPTER 6
Ethnicity Claims and Prior Consultation

in the Peruvian Andes
Ximena Málaga Sabogal and María Eugenia Ulfe
In this chapter, we explore the ways in which people not only adapt to
state institutions’ requirements, but also act strategically to bend the
limits established by those institutions. The institutions of the extractive
state tend to build on certain assumptions about the nature of actors,
but those assumptions are often misguided. As anthropologists, we are
Research conducted for this paper was funded by the Research Management
Department at the Pontifical Catholic University of Peru (Dirección de Gestión
de la Investigación of the Pontificia Universidad Católica del Perú) and was
completed as part of the Interdisciplinary Group for Qualitative Research on
Politics (GIECEP). We would like to thank Paola Porcel Caballero, Verónica
Bravo, and Sebastian Arguelles for their assistance on this paper. We would also
like to thank the people from Espinar for their time and patience during this
research.
X. Málaga Sabogal (*) 
Department of Anthropology, New York University, New York, USA
e-mail: ximena.malaga@nyu.edu
M.E. Ulfe 
Departamento de Ciencias Sociales, Pontificia Universidad Católica del Peru,
Lima, Peru

154 X. MÁLAGA SABOGAL AND M.E. ULFE
interested in the ways in which Espinar, a territory and a population,

decided to respond creatively to the prior consultation regulations by
reinventing their cultural identity claims.
We propose that studying the process of institutional construction
from a single resource cycle is a problematic and an erroneous enterprise.
New historical repertoires of state and society action emerge as a result of
the conjunction of new state institutions and people’s own adaptations
of these institutions based on their identity dynamics and their previous
relation with the state. In this case, the construction of K’ana indigenous
identity in Espinar is recreated in relation to a process related to the
management of costs and benefits of boom: the prior consultation.
As we discuss, participatory institutions can be traced to the 1970s
when they were introduced as part of a critical global discourse against
top-down recipes for local development which had an impact in Peru. The
neoliberal state translated participation in its own terms. As opposite, prior
consultation emerged more recently as a global agenda when commod-
ity booms impacted local indigenous communities. In the current boom
cycle, indigenous communities have recreated their political identities in
order to engage with the impact of both the commodity boom and the
new agendas proposing new rights at the local level. As a result, we argue,
new boom cycles will be shaped by these repertoires, which will be dif-
ficult to be ignored as they will resound within local and global agendas.
This case illustrates the richness of political ecology and how many
dimensions are at play, rejecting easy causal stories that do not take into
account this complex political process. In Vibrant Matter: A Political
Ecology of Things, Bennett (2010) shows how matter must be reconfigured
as an affective and active part of any political process. From a political sci-
entist emphasis, Bennet suggests strongly that politics is much more than
institutions, political parties, governmental systems, and states. She uses
the term “political ecology” to describe different forms of political delib-
eration and recognition in which people are not the only significant actors.
She argues that things—in a general way meaning natural resources—act
and make people act upon themselves, not always following the laws in the
way state agents expect them to. There are multiple and creative ways of
political response toward intended-to-be extractive states.
When Antonio1 began his talk about the K’ana nation’s history, he
could not hide his passion. He became louder, his speech replete with
gestures, and even props were brought into action. He used quotes from
books to make his arguments stronger. Antonio is a gifted schoolteacher
and has had many opportunities to perform his abilities over the years. As
6 ETHNICITY CLAIMS AND PRIOR CONSULTATION … 155
a self-claimed indigenous leader, Antonio has participated in international

conferences and congresses on indigenous peoples and indigeneity. He
learned to speak in public as a young student involved in leftist political
debates at the San Antonio de Abad State University in Cuzco. Unlike his
classmates, he felt trapped in a vacuum: He did not see himself as fully
Cusqueño. For him, it was not appropriate to claim that identity, as he was
someone from the “provincias altas” (highland provinces). “Chuto!”—he
was called by this term more than once in the university’s corridors. Chuto
is a pejorative term, which refers to those who migrate from the Andean
highlands or punas to the cities. Chuto refers to those who have “just
come down” or “recién bajados.” These references remained in Antonio’s
memory, even as he returned to Espinar and became involved in the inter-
national indigenous movement. Even though Antonio participated in the
academic Quechua movement while in Cuzco, he did not think of himself
as possessing a Quechua identity. For him, “Quechua is a language, not an
ethnicity” (Antonio, Espinar, 24/08/14). So, when Antonio speaks about
ethnicity and ethnic groups, he uses the term K’ana, not Quechua.
In “Vida símbolos y batallas,” Glave (1992) analyzes the multiple
transformations that pre-Columbian K’ana ayllus underwent to become
the communities they are today. Glave completed a longitudinal study,
which allowed him to observe how certain patterns of power relation-
ships were repeated under new forms. This approach is useful to observe
how K’ana society is very dynamic, able to adapt to new conditions and
external pressures. Its changing narrations of the past provide ideological
content that shapes the contours of defining “K’ana”—or, what being
K’ana means. As Glave writes, “the intersection between the real historic
evolution of their lives and an ideological form or image of this history
[had as a result] a world that has been constructed to confront changes
regarding their lives”2 (Glave 1992: 237). In this sense, actual history
does not matter as much as reinterpretations and multiple local versions
that are used and re-created in everyday life. Legendary heroes in K’ana
history become historical leaders in the process of formation of K’ana
identity narrative. It is through relationships among themselves and with
other peoples—state officers, transnational companies, and indigenous
leaders—that K’ana identity emerges and is imagined. Through an inter-
mingling of dense, racialized, and historical relationships, both colonial
and republican, the debate on K’ana identity occurs. What is at stake
in the K’ana people’s political agenda regarding identity? What are the
debates of ethnicity, participation, and citizenship among K'ana people?
Who are the agents and subjects that operate in this political arena, and
how do they operate? How do transnational ideas about indigeneity and

indigenous rights are brought to life in current and daily events among
the people from Espinar?
This paper revolves around the quest and longing for ethnic identity
recognition in Espinar as it emerges in discussions regarding participa-
tion, conflicts with local mining and irrigation projects, and indigenous
rights as a specific form of human rights. This is what Jean and John
Comaroff (2009) mean when they refer to ethnicity as a claim that is
both unique and diverse—it is the object of choice and self-construction.
Its discussion emerges in peculiar contexts of late capitalism; these con-
texts also become important factors in the fabrication of texture, con-
tents, and images of ethnic identification. Although it may not always be
explicit, identity becomes an important strategy and discourse in claims
for indigeneity, as well as the relationship Espinar’s people have formed
with state institutions and officers. On the other hand, participation
emerges as a cultural mandate in the neoliberal state (one that requires
efficiency, efficacy, and evidence, as proposed by McKenzie 2001 and
Cánepa 2013). In a liberal democratic system, participation requires the
subject to be visible and public, intervening and/or participating in the
public sphere. If the basis for a particular right and aspect of participation
is this subject’s indigeneity, then it has to be publicly performed.
The claim for prior consultation comes from a broader context of
international legislation on indigenous citizenship and collective human
rights. It draws also from the global discourse and demand for partic-
ipation. These aspects, accompanied by a description of Espinar’s con-
text and the nature of its claims toward the state, will be the axes of this
paper.
What does participation imply and who participates? For Chambers
(2007), this question can be analyzed from two angles: (1) Who are the
active agents that generate statistics, namely those that measure who
participate? and (2) who are those that really are interested in participa-
tion (according to topics of interest and geographic location)? Although
Chambers is one of the authors that have extensively studied participa-
tion as action-research methodology in development projects, his criti-
cal eye requires us to reflect upon the limitations and challenges of its
overuse as a strategy in state work with local populations. Participation
is a term frequently cited in state political vocabulary—that, as we will
see, comes from development projects; it is a hodgepodge that for many
functionaries, local leaders, and academics has lost its meaning. In any
case, it is advisable to problematize the concept of participation, since it

does not seem to have the same meaning for everyone. The day-to-day
disagreement on the meaning of participation follows Jacques Ránciere’s
understanding of the problem, it “is not the conflict between one who
says white and another who says black. It is the conflict between one
who says white and another who also says white but does not understand
the same thing by it or does not understand that the other is saying the
same thing in the name of whiteness” (1998: x).
Much has been done and said “in name of participation.” While a
concept that had been used initially to denote agency, it has become—
at least in practice—equivalent to just informing participants about the
scope of a project that concerns them. This has become a norm especially
in the case of vulnerable populations—as indigenous peoples—that are
not in a good position to negotiate the terms of their participation. In
this respect, it is easy to identify two main groups in “participation pro-
cesses”: a “we”—state, company, power group—and a “they”/“others.”
“Others” are included in the process only by grace of the first group.
The pressure for participation comes with a clear top–bottom direction.
The question of who is consulted or forces participation upon whom
does not arise as topic of debate, at least not at the top.
The patriarchy and idea of a monocultural state have predominated
historically, yet during recent decades, a questioning of this comprehen-
sion of reality has begun. States are slowly transforming and adopting
new challenges: promoting gender equality and trying to eliminate racial
and ethnic discrimination. This implies a fight for state self-transforma-
tion, which should abandon a patriarchal and monocultural discourse
and institutionalism, and even more so a patriarchal and monocultural
practice, in order to transform society. Thus, it is not possible to trans-
form society without the state transforming itself in the process. The
Prior Consultation Law undermines, in the Peruvian case, the founda-
tion of this patriarchal and monocultural state, which is based on the
appreciation that Peruvian citizens are all of the same cultural heritage.
Espinar is a clear example of this, and its demands for a culturally differ-
ent citizenship should be recognized as such and should be consulted for
any exploration project or intervention in its territory.
The conceptual framework in which “participation” emerges as a
methodology is the failure of policy and development projects of dec-
ades 1950 and 1960. It was toward 1970 that debates began over
“more democratic” forms to include populations in decisions about
development in their communities in order to make sustainable pro-

jects both approved and used by the local population. However, this
proposal required a rethinking of the way in which state and democracy
are understood (Cooke and Kothari 2001). Participation can be trans-
lated into umbrellas under which processes operate and develop. From
the hegemonic centers of power, a series of practices and manuals are
developed (mainly methodological) about how and whether popula-
tions should be involved in development projects—what strategies to
implement, and under which modalities and forms. The group work
of entities such as the World Bank, International Monetary Fund, and
Inter-American Development Bank promotes the use of participation
in methodology, discourse, and policy. A universe of initials that stand
for standardized methodological processes paraded through the world
alongside development projects, as Ferguson (1994) and Gupta (2013)
had shown, populating the field with reforms to alleviate poverty, con-
struct political institutionalism, and bring improvements to populations.
Participation has been seen more so as a proposal to depoliticize
policy (Cooke and Kothari 2001), given that its internal exercise limits
access for great parts of the population. In practice, exercise and control
of participation is a manifestation of centralized and hegemonic political
power that always extends from one side toward another (“that who has
less”). Authors such as Williams (2004: 559) seek to rescue this idea of
participation as a new form of political subjectivity that promotes new
opportunities among social subjects. However, the limits and echoes of
this discourse are permeable, as well as their consequences.
When we arrived to Espinar in May 2014, we wanted to see the
scope of this discourse in a concrete example. Why Espinar? For many
Peruvians, this question has an obvious answer. Although Espinar
jumped to public attention in 2012 because of an intensifying conflict
against mining companies that worked in the area, this situation was only
the tip of the iceberg in a cycle of conflict that has more profound roots.
Mining in Espinar is not a new phenomenon—the zone has been the
site of mineral exploitation since at least the colonial era—but recently
in 1985, with the mining company Tintaya, exploitation expanded on a
greater scale and affected the general local population and its daily life.
As Cáceres (2013) notes, conflicts in Espinar seem to follow a vis-
ible pattern. Since 1985, the relationship between residents and min-
ing reaches its culmination point approximately every 5 years, after
which there is a calm period. The conflict’s roots come from more
than 2000 ha expropriated by the state to begin mining in the 1980s.

Tensions are a reflection, on the one hand, of state lethargy to deal with
the growing problem and, on the other hand, the mining’s inability to
build stable relationships with the local community. Over the years, there
have been many recurring demands from the local population to state
officials and the mining company. For instance, the local population
wanted more jobs for its residents, while the mining company wanted to
hire trained labor that could keep up with the rigorous rhythm of mod-
ern industry. Espinar residents wanted more engagement with livestock,
the local area’s main activity, but the great terrain expansion that live-
stock requires does not coincide with mining objectives.
It appears that not much could be done to resolve the situation, given
that both involved parties had different objectives. However, Espinar
learned coexistence, although in conflict with mining. Call it a love–
hate relationship, or however you like, but for a while, Espinar residents
resigned from the fight against mining in their area. Perhaps, “resigna-
tion” is still a strong word. To survive and reproduce their community,
Espinar residents learned to take advantage of mining and complain
when its advantages were delayed. These complaints, sometimes, resulted
in stronger conflicts.
The year 2012 was a complicated moment in time in many aspects for
the Espinar population. Organizations, institutions, and local federations
that for a long time had been the resistant’s bastion against mining, had
began to weaken. An inevitable generational adjustment and approach-
ing political turn, a leader that had been present in other peaks of con-
flict, and a state that for a long time—if not since always—had stopped
listening to local populations: these and other factors combined gave
birth to the largest conflict that Espinar had seen. Even the occupation
of the mine in 1990 and riots regarding privatization of the company in
1994 were not comparable to the discontent that accompanied negotia-
tions for the Framework Agreement (Convenio Marco), an official agree-
ment between the parties reached in 2012.
The Convenio Marco had been the product of institutional nego-
tiations between state officials, mining representatives, and the Espinar
community. Negotiated in the first half of the 2000s, this agreement
stipulated the granting of 3% of Tintaya profits to the local popula-
tion. However, as seems to occur in these types of agreements, admin-
istrative reality did not correspond with the population’s expectations.
Additionally, the famous 3% was only a part of the agreement established
by the Convenio. One of the aspects that recently would receive more
importance was the responsibility assumed by the mining company to
comply with regular obligations of environmental impact monitoring and
a quota of local labor in its operations. Local populations complained
against the failure to follow through on both agreements. The topic of
contamination that appeared as tangential in previous inflicts reached a
culminating point in 2012 that would convert it into the main topic of
complaints. Why now? What had changed?
What is really the level of contamination in Espinar? It is difficult to
understand the topic of environmental contamination from a “techni-
cal” perspective. Poole (2012) calls attention to the strong discourse
that accompanies technical reports in Peruvian Andes bureaucracy.
“Technical” stands in the bureaucratic vocabulary for “incorruptible
and apolitical.” However, laboratory results about the level of water
contamination in Espinar differ depending on which institution ana-
lyzes the sample; thus, the topic becomes complicated. In 2012—and
even today—each result of technical analysis does not coincide with
the previous one. As anthropologists, asking about the “real levels” of
water contamination in Espinar did not make sense, because percep-
tions regarding contamination are more concerning than the levels that
may exist according to an “objective” viewpoint. Finally, if the people
are convinced that water is contaminated, they will act accordingly. And
these are the acts and consequences that social scientists should observe.
“Before, nobody thought that we were going to run out of water,
because we save water. But people from the north and coast come and
take showers everyday. Everyday, Miss! Of course water runs out.”
Espinar’s main streets are full of restaurants and hostels of all types that
evidently consume large amounts of water. Many of the businesses’ big-
gest clients come from the mining company. Some of these places do
not even serve a regular menu, but rather one to satisfy the demands of
mining workers. Plates served span the entire culinary spectrum of Peru,
with menus as diverse as their guests. Chiclayo, Trujillo, Piura, Lima, but
also close cities of Arequipa and Cuzco are represented with their typical
dishes. Espinar, which had been an important place because of its loca-
tion in the route Cuzco–Arequipa, is today the eatery for mining work-
ers. Since man does not only live on bread, there is also an abundance of
nocturnal entertainment—especially karaoke bars.
So, why Espinar? Marked by a recent conflict, but also by a large coex-
istence with mining, Espinar is a place where the idea of participation
occurs in practice. Whether it is regarding demands for greater participa-

tion in mining profits, a larger influx of local labor, or participating in
decisions that should not—according to the locals—be taken from top-
down, Espinar takes its right to participate very seriously. The demand
for the Right to Prior Consultation is a clear example of this. But the
Right to Prior Consultation is pertinent for indigenous peoples, and
until now, in all the negotiations with the mine and the state in Espinar,
the word “indigenous” did not even came up.
1 The Boom of K’ana Federations

and the Building of Identity
Probably, international specialists would call Espinar’s people indigenous

without much doubt: They speak Quechua (the most spoken indigenous
language in the Andes), most of them can trace their ascendance—some-
times even very directly—to highland communities, and most of them
keep practicing some aspects of Andean “tradition,” as chicha brewing
or ritual endeavors, in their daily lives. But not until recently they started
to use the word “indigenous” in their self-description, something that
is crucial in all international notions of indigeneity. The media cover-
age of 2012 conflict in Espinar results symptomatic of this issue: While
Peruvian media always referred to the actors of the conflict as “espina-
renses,” Espinar residents (when referring to the inhabitants of the town),
or peasants (when referring to the inhabitants of Espinar’s highland com-
munities, mostly shepherds or small stock farmers), international media
almost unanimously characterized the conflict as one between an interna-
tional company and the local indigenous population.3
When we first arrived in Espinar, we were interested in other forms
of participation and the indigenous issue did not even cross our mind.
Analyzing the participatory budgeting process, we realized that most
of the organizations involved as official “participating agents” (accord-
ing to the terminology proposed by the government) were going
through a shift in their orientation: from specific goals—for example
the construction of a new market place, or the improvement of school’s
infrastructure—toward a most general identification as indigenous organi-
zations. The most important of them, FUCAE (Federación Unificada
de Campesinos de Espinar—Unified Federation of Espinar’s Peasants)
is a clear example of this shift. Even though FUCAE exists under
this denomination only since 1988, it has direct roots in the peasant
mobilizations of the 1960s and 1970s and was constituted as a left-

ist base. After years of being an important voice in the leftist spectrum,
FUCAE is changing its tendency, adopting a discourse of ethnic identi-
fication close to the K’ana heritage. Other organizations also followed
this pattern. In the most evident cases, it can even appear in its name:
K’ana Youth Federation (Federación de Jóvenes K’ana, FEJUK) and K’ana
Women Federation (Federación de Mujeres K’ana, FEMUK) have formally
adopted the K’ana identity in its definition and vocabulary.
Upon further inquiring, we were able to see through the FUCAE
case how a shift was occurring in Espinar, a shift that corresponded to
global changes. Identifying oneself as a peasant became something of
the past,4 whereas the use of indigenous references for identification
entered the scene in discussions of K’ana identity in Espinar. As stated
at the beginning of this article, K’ana identity is complex and has many
setbacks. Discourse about K’ana identification, although always present
in some way in Espinar political life, recreated itself in these moments
with a strength given by a global context. The international indigenous
movement put indigenous and aboriginal peoples’ rights into the politi-
cal agenda, which mobilized people all over the globe.
For this reason, it is necessary to locate the discussion about this phe-
nomenon in a greater context. There are two international conventions
that are important in this case. While Convention 169 of the International
Labor Organization is the best known and quoted, its direct precedent is
ILO’s Convention 107 (1957), which recognizes the right of indigenous
and tribal peoples to special measures of protection because of their condi-
tion as a “less developed” population, with the goal of “its progressive inte-
gration” into their respective countries. Indigenous organizations opposed
the convention’s goal of assimilation for years, which is why in 1989 the
ILO Convention 169 was approved (1989) to promote the respect of cul-
tures, forms of life, traditions, and customs of indigenous and tribal peoples.
ILO Convention 169 grants economic and social rights through
the Right of Self-Determination; however, this does not translate as a
demand for autonomy of indigenous territories; the term “self-deter-
mination” is quite problematic itself. The Peruvian state ratified this
international treaty through the Legislative Resolution No. 26253 on
December 5, 1993. It was implemented in Peru on February 2, 1995
(Art. 38° of Convention 169-ILO). This Convention establishes the
right to prior consultation of indigenous peoples in the case of legislation
and productive projects (including extractive activity) that directly affect
them. This is how conversations over prior consultation began in Peru.
The Signature of the Prior Consultation Law was approved in

May 2010 after a process of revision; this signature approval eventu-
ally became Law No. 29785, Law of the Right to Prior Consultation.
This law recognizes the existence of indigenous and aboriginal peo-
ples in Peru and establishes the objective and subjective criteria appli-
cable to identify them. According to the Law, the Vice Minister of
Interculturality is responsible for defining whether a group is indig-
enous or not, and elaborating a database of indigenous groups in
Peru.
There were a lot of debates about this law, because, according to
indigenous activists and their circles, the law actually undermines the
ILO Convention 169. Having been signed by the Peruvian state,
the convention occupies legally a constitutional level, and the Prior
Consultation Law is seen by some as a way of going over the conven-
tion by reducing some of the rights that this convention specifies. But,
with its problems and all, as soon as the Law became official, many local
communities started claiming their indigenousness in order to obtain the
right to Prior Consultation. Espinar was not an exception. The problem-
atic aspect of their claims, especially those regarding mining, is that it
has to be prior consultation. What about the places where indigenous
peoples have coexisted—in many cases, not quite pacifically—with min-
ing for decades and even centuries?
Espinar was unable to demand prior consultation to address the prob-
lems that it has with mining. But the thing is that although Espinar is
mostly known in the regional and national scene for this conflict, there
is another conflict as strong and as important that has been brewing for
a time. This project complicates Espinar’s scenario and adds a new factor
to the game. According to SOCIETAS (2014), the main socio-environ-
mental conflict in the Espinar Province is linked to the Majes Siguas II
project, which involves the creation of a water reservoir and brings reper-
cussions regarding resource distribution.
The Majes Siguas II project is an agricultural megaproject that would
derive enormous quantities of water from the upper basin of river
Apurímac to irrigate 38,500 hectares in the Siguas Pampas (Arequipa
region) for agricultural use. Socio-environmental conflict arises with the
Espinar population’s denial of the development project, arguing that the
implementation of a reservoir in the upper basin of River Apurímac will
reduce the river flow that supplies the Espinar Province, thus causing
water risk for more than 50 irrigation projects and the potable water sup-
ply for Espinar’s population. The Espinar population’s unease worsened
with the project’s public presentation, where they confirmed that it did
not have an environmental impact study, nor a study of water evaluation,
nor the approval of the river Apurímac basin’s assembly. After many legal
battles, the project was suspended, but the Peruvian government (and the
authorities of Arequipa, the region that would directly benefit from the
project) has been very clear about this being only a temporary measure.
“Majes Siguas II is happening” was one of the most repeated government
slogans in the last couple of years. Whomever opposes the project is char-
acterized by the government as a “negative element” contrary to Peru’s
development.
Espinar residents decided to find another exit to this problem: Prior
Consultation. In this case, since the project has not started yet, the law
should apply. But the Prior Consultation Law applies only to indig-
enous peoples, and Espinar’s “indigenousness” has not been addressed
so far. After filing a request for a process of prior consultation,
Espinar’s residents heard from the Vice ministry of Interculturality
that they are not indigenous, and therefore, the Prior Consultation
Law does not apply to their case. The fact that in the long con-
flict with the mine, indigenousness was never a topic, did not help.
Espinar, after years of fighting the mine, has a reputation of being
conflictive and of obstructing any state actions regarding development
interventions in the region. In this context, the rebirth of K’ana fed-
erations and groups that we observed during fieldwork does not seem
to be a coincidence.
2 Participation and Indigenous Politics

When we enter the room, everyone stops talking. Antonio comes out
to greet us and asks us to wait just a moment outside, since they are not
ready yet to receive us. Before turning my back, I see with the corner of
my eye just part of the scene: nine men are sitting around the table, drink-
ing beer, and talking animatedly in Spanish. There is a radio playing and
the table is full of documents being examined by the men. When we come
back five minutes later, a lot has changed. The documents on the table
were replaced with coca leaves. The men are not drinking beer anymore
but chicha (a fermented corn beverage). Conversation between them is in
Quechua. Some of them put on chullos and ponchos and hurriedly sit back
around the table.
Field notes, Espinar (Cuzco, Peru), August 22, 2014.
Espinar’s case is just one among many in which being recognized as

indigenous and making a claim for certain rights comes with baggage.
Antonio and his friends are ideologists of the recently born K’ana move-
ment that fights for Espinar’s right to prior consultation. They do what
they can with the provided tools and expectations that must be met. If
the state will only recognize them as indigenous if they speak Quechua
and practice some “traditions” that are long associated with indigene-
ity—as coca chewing and drinking chicha—then they will do it. And if
the person that comes to see them is an anthropologist, more the reason
to preserve this performance. It is no secret that for a long time anthro-
pology has served as the discipline that provided (directly or indirectly)
the definition of Andean cultural difference for the Peruvian state. Why
can’t the state adjust its expectations to the reality of a dynamic cultural
construct?
FUCAE held a special event in August 2014. Espinar organizations
decided to rise above the squabbles and quarrels that divide them day
to day and unite in light of a common goal: the recognition of Espinar
population as indigenous people K’ana. With this end, FUCAE led a list
of actions. It disseminated the initiative and contacted relevant actors
of the indigenous movement on the national level and institutions that
could support them. Letters were sent, pronouncements were written,
and discourses were given. The event of August 23, 2014, was the ice-
berg’s tipping point of an initiative that represented many interests and
negotiating efforts.
One day before the event, FUCAE’s main actors and authorities
met in the federation’s local to make a pago (payment to the earth, an
Andean propitiatory ritual) for the enterprise’s success. Upon arriving a
little before the planned hour, we encountered the situation described
above: Before making the pago, the leaders (all men) used the oppor-
tunity to adjust final details of the next day’s presentation and prepare
documents that attendees would sign. My arrival interrupted these pro-
ceedings and what followed was the proper pago. Each step was done in
a deliberate way, taking their time. They told me before beginning that
because it was such an important enterprise—their self-recognition as
K’ana people—the payment had to be special. It drew my attention see-
ing coca leafs and other elements of pago dispersed on a wooden desk
that originally houses a couple of computers—now cast aside in a little
corner to make space for the ceremony. I felt that my presence was very
disruptive in this masculine space in which women only entered to serve
food. At least it was like this until, a little late, a female Bolivian leader
arrived, apparently someone very known in the Latin American indige-
nous movement. The pago concluded almost at dawn, and all those who
were present at its start had to stay until the end to not disrupt the com-
munitarian energy of the ceremony.
This was only the beginning. The following day was dedicated to a
self-recognition ceremony. Participants arrived to the municipal theater
in small groups and delegations. During the event—which took the
entire day—many entered and exited the room, while in the theater’s
back area, there were permanent groups of discussion and conversation.
It was very interesting to see how the event’s organization corresponded
to a specific conceptualization of what it implies to be an indigenous
people. A good part of the morning was dedicated to historic presenta-
tions about the continuity of the K’ana people. The book Vida, símbo-
los y batallas, by Luis Miguel Glave, which was quoted at the beginning
of this paper, was summarized entirely in Quechua by Antonio—who
was one of the first presenters—putting special emphasis on the group’s
precolonial, and especially pre-Inca, history. This rapid historical review
highlighted more than anything the cultural characteristics (“traditions”)
and the continuity of territorial occupation by the K’ana people.
The goal of this emphasis on K’ana indigenous history made itself
known quickly, when in the event’s following part one of AIDESEP’s
advisors (Asociación Interétnica de Desarrollo de la Selva Peruana/
Interethnic Association for the Development of the Peruvian Jungle)—
who were ironically from Espinar—presented to attendees a lesson about
indigenous peoples’ rights, the ILO’s Convention 169, and the right to
prior consultation. Upon emphasizing the definition of indigenous peo-
ple that Convention 169 proposes, the presenter established a parallel
between the ILO’s enumerated characteristics and the reality of Espinar
residents. The questions “Are we K’anas?” and “Don’t K’anas do this?”,
with which he closed every part of his presentation, were responded
unanimously by an engaged public.
The day continued in this spirit, followed by dances and songs on
stage. Among the invited presenters was also the Bolivian leader that we
had met the previous day. While the topic of prior consultation was men-
tioned a few times, emphasis was put on the K’ana identity and indige-
neity itself: what does it mean to be K’ana, what are K’ana values, and
what are K’ana cultural manifestations. Another point that was stressed
throughout the day was the solidarity needed to establish a joint agenda
with other indigenous peoples. Thus, the presence of Amazonian leaders

and the neighboring country Bolivia was very important. Comparisons
with the “traditions” of other indigenous peoples were also present all
the time.
Toward the end of the day, attendees were invited to sign the
Declaration of the K’ana People. Many attendees, especially those that
had come from communities adjacent to the city of Espinar, signed or
gave their digital fingerprint. However, Espinar city-dwellers—at least
some of them—hesitated before approaching the table where signatures
were being collected. Upon asking Felipe, an Espinar journalist with
whom we had conversed a lot in past days, why he did not sign the dec-
laration, he responded without hesitation: “Well, I am not K’ana. My
parents were, but me? I am from the city.”
Felipe’s reasoning did not come as a surprise in a country in which
indigeneity is not necessarily viewed as ethnic identification. Being indig-
enous in Peru goes through a cultural definition, marked especially by
changes in rural areas and twentieth-century migrations. In this context,
the self-recognition of K’ana people is an action that reunited many fluid
aspects of its identity: It speaks of history, of culture, of tradition, and
of “what is ours.” Is this a strategic use of identity? Definitely. Is this
bad? The answer to this is another question: Why would it have to be?
Identities are always constructed, the only thing that changes are the ele-
ments that get put into the mix.
3 Where Do We Go from Here?
This chapter within this book aims to show the relevance of local actors’
perspective in the construction and reshaping of old and new institu-
tions. By doing so, we encounter a narrative that evidences the complex-
ity of the translation of global agendas at the local level and the fluidity
of cultural and political identities. These processes can be too easily sim-
plified missing the diverse dynamics at play. A view to the complexity of
the local can sometimes blur more general dynamics, but at the same
time is essential to fully caution us about the missing processes in the big
picture. We want to conclude by further discussing how these transfor-
mations reshape institutional building at the local level, the open-ended
dynamics these processes are opening, and how this reshaping creates
new repertoires of state and society action that will bound the agency of
the state in a new boom cycle.
Like Antonio and his friends in Espinar, many others are strategically
using this “otherness” expected from them. But they are walking on
thin ice. The process of self-essentialization comes with many dangers.
In the first place, it can end up excluding big groups of more “accultur-
ated” people from the collective claim. For example, in the now classic
Saramaka versus Suriname case that Richard Price recounts in Rainforest
Warriors, the state of Suriname does not seem to accept people that live
in cities and are bilingual as “real Saramakas.” The author is accused of
idealizing the Saramakas with his explanation of their history as an expert
witness. State attorneys argue for cultural change among the Saramaka;
however, a cultural change would automatically exclude any possibility of
maintaining their Saramaka identity (Price 2011). The state, in an almost
proverbial fashion, accuses the anthropologist of essentialization, while
at the same time arguing an essentialist vision of culture. It is almost as if
“tribal” actually meant “without history.”
Peru has a long history of transformations, especially in its migration
aspect, during the twentieth century. Migration came with a de-indian-
ization of the country, consequence of the search for a new “modern
subject.” As Drinot states, modernity comes from the hand of technol-
ogy, salaried work, and the worker. In this sense, the mining worker also
exemplifies this spirit and sense of modernity. Modernity comes with
its own system of classifications and hierarchical organization of social
subjects (Drinot 2011). Some participate more actively in its construc-
tion, while others long for it or migrate to achieve it. Thus, some stud-
ies understand migration from more intimate motivations of personal
achievements, such as education or personal mobilization (Degregori
1986). The beginning of the twentieth century is clearly marked by a
discourse of progress/development, and in Peru, it will be marked by
migrations that bring dramatic geopolitical transformations to the coun-
try. Who is indigenous now? Who is mestizo? In a country that made
such a strong effort to de-indianize its subjects, the concept of indig-
enous rights turns out to be revolutionary.
In a discussion of cultural rights that emerges in the debate of human
rights, there is a confrontation between the ways of looking and think-
ing of culture from different points of view. First, there is the way of
how “culture” is considered an impediment to progress in the sense
that equates it with talking about customs, traditions, and practices that
have a long history, especially those that concern women rights (Poole
1994). In the year 1995, there was a request from the United Nations
for governments to avoid cultural justifications in legitimizing violence

against women. Here, culture emerges not only as a retrograde, but
also as a practice that helps to justify why violence continues operat-
ing over certain social subjects (Riles 2006). In this dilemma, cultural
aspects emerge as something that subordinates women, while modernity
or modern discourse liberates them (Merry 2006)—and in some way,
democratizes relationships between genders. However, it is even more
complex when we consider De la Cadena (2008), Latour (1994), and
other author’s arguments, because we see that modernity is an imperative
category that differs organisms and requires the constitution of certain
organisms as social subjects, whether citizens, people, or humans.
A great part of this debate has its beginning in what Ránciere (1999)
calls disagreement. There is a disagreement on what indigenous means,
but this comes from a more profound one: What does culture mean?
What it is? From the narrative of Human Rights, there is no clear under-
standing of this and it seems more as an encyclopedia definition (from
the last century, that is for sure) that sees culture as a totality. Human
Rights, parting from a universalist background, work with a universal-
ist conception of culture, one that puts tags on peoples and does not
leave space for change and dynamic identity transfigurations. There is an
intrinsic disagreement in the way in which culture is not associated with
policy and other spheres of social life, which makes it impossible to see
that indigenous populations should be taken into account for policy mak-
ing. There is a global pressure for participation, but indigenous participa-
tion escapes the scope of policy-designers. They cannot wrap their mind
around a differentiated right of participation—not only because they are
citizens, but also because they are indigenous—if the subjects are not
clearly defined. The repercussions of this idea operate on different levels.
We see how certain topics—the idea of participation, on the one
hand, and the idea of indigenous rights, on the other—that come from
great ideas assumed as global agendas circulate from transnational organ-
izations to local populations, operating with its own logics and their own
conceptualizations. But in the case of participation, it is an idea that ends
up favoring culturally homogeneous populations. The Prior Consultation
Law was received in the urban areas of Peru as a contradiction: Why
would indigenous peoples have more rights than the rest of the citizen-
ship does? “We all descend from indigenous ancestors, if we are going to
play like that, I will also put on my poncho and go around making pagos
and singing in Quechua”—told me a man in Lima.
But why do we associate indigenousness in Peru only with Quechua,

ponchos, and pagos? Indigenous populations are still perceived as exotic,
rare, and different by state institutions and its policy makers. Moreover,
these mandates operate over those who are indigenous and still felt as
“others,” who should assimilate or adhere (even seeing how the Law of
Prior Consultation in Peru functions). The state, following past defini-
tions of a static culture, assumes that culture functions as an organism
in itself, without changes nor agencies nor histories. Contemporary indi-
geneities, as proposed by De la Cadena and Starn (2010), do not find a
place in the official approaches of the Peruvian state to its population and
indigenous peoples.
It is in discourses of interculturality and multiculturalism and respect
for cultural tolerance, cultural rights, and human rights that the twenty-
first century shows us how “others” (indigenous peoples, women, peas-
ants, LGTB, etc.) affirm their place in culture, economy, and global
policy. Clifford (in De la Cadena and Starn 2010) shows that indigenous
experiences go from autochthonous (we are here and we have been here
always) to the diaspora (we long for native land). These are processes
that describe diverse itineraries, but from which “cultural citizenship” is
interpreted as a lived practice and is converted into a battlefield (Clifford
in De la Cadena and Starn 2010).
It is critical to be cautious in not simplifying the analysis of this complex
process. Prior consultation does not have a simple genealogy. The impera-
tive of participation mixes with the problematic definition of indigene-
ity and an international indigenous movement fighting for their rights. If
Espinar accedes to prior consultation in the Majes Siguas II case, the case
would become a model for the desired effects from official recognition of
the Espinar population as K’ana people. Being indigenous has other conse-
quences in international law and the K’ana movement ideologists are very
aware of these. Being K’ana, thus, provides access to other mechanisms of
participation, closed off to common and ordinary citizens of Peru.
It turns out ironic to think of the consequences of K’ana recognition
for “other” residents of Espinar those that are not recognized as K’anas.
Will we see a sudden interest in recovering the self-identification K’ana?
Or rather an attempt to point out the mixed quality of the Espinar city-
dweller identity? How will the central government react to this process
of self-identification? What are the following steps? As in all anthropo-
logical research, we end up with more questions than those for which we
have answers.
Notes
1. Unless otherwise indicated, all names have been changed to maintain ano-
nymity of those interviewed.
2. Translated from the original in Spanish: “la intersección entre el devenir
histórico real de sus vidas y una forma ideológica o imagen de esa historia
y del mundo que ellos se habían hecho para enfrentar los cambios en sus
existencias” (Glave 1992: 237).
3. For example: “Trying to ward off threats to their survival, the pov-
erty-stricken, indigenous people of Espinar contend with rich and
powerful forces.” In: http://peoplesworld.org/peru-mine-conflict-pits-
david-against-goliath/.
4. There is a long history of “peasantization” that has its roots in the agrarian
reform of the 1960s in Peru. Back then, the word “Indian” was replaced
by peasant in the official vocabulary of the state.
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Ximena Málaga Sabogal is a Ph.D. student in the Anthropology Department
at New York University. She holds a BA in anthropology and an MA in history,
both from Pontificia Universidad Católica del Perú (PUCP). She has conducted
ethnographic and archival research in Puno, Ayacucho, and Cusco (Peruvian
Andean region). Her current research projects include “Reparing citizenships,”
an inquiry into the policies and politics of economic compensations in the
postwar Ayacucho, and “Global agendas, local translations,” a study on the links
between the global discourse on indigenous peoples and the “Consulta Previa”
law in Espinar. She is participating on the work of the book, “Reparando ciu-
dadanías: estrategias y sentidos de reconocimiento en Ayacucho post CVR.”

CHAPTER 7
Conclusions

This book collectively proposes that three dimensions help to explain insti-
tutional development in resource-abundant Peru: (a) preceding power dis-
tribution of state and society actors, (b) historical repertoires of state and
society action, and (c) the institutional entrepreneurship of actors embed-
ded in transnational networks. These three dimensions taken together help
toward an understanding of why benefit-managing institutions such as the
mining canon, which governs the regional redistribution of income, devel-
oped earlier but have severe implementation problems; and why cost-man-
agement institutions, such as autonomous environmental regulations, were
more contested in both their adoption and implementation.
E. Dargent (*) · J.C. Orihuela · M. Paredes · M.E. Ulfe 

J.C. Orihuela
M. Paredes
M.E. Ulfe

Our findings clearly show that states constitute both agents and arenas
of institutional change and dispute. Institutional development depends
on a continuum of layers of states that are not monolithic and are influ-
enced by plural social forces which include business actors, political par-
ties, local organizations, and transnational activists with agendas and
networks that are either in alliance with or in opposition to these social
forces. Peru’s institutional pathway is to be understood within analytical
frameworks that embrace such complexity.
The book gives an overview of the general pattern of state action in
Peru during the resource boom: a state directing considerable funds
to public works, such as roads and buildings, what we call the “cement
state,” while facing serious constraints for investing in plans, policies,
and agencies to manage abundance and foster development effectively.
Peru emerges from the resource boom with greater territorial scope
through public works and social programs, but still considerably lim-
ited in its capacity to regulate the actions of society, especially in its con-
trol over local conflict and its ability to bring under control those in the
private sector who are the winners in market reforms and the resource
boom. To use a catchy phrase: more of the state but still the same state.
It remains to be seen how these patterns will play out in the context of
the resource bust, when less funds are available for public works and
redistribution across communities.
We conclude this book by highlighting three general considerations
that emerge from our work: the need to embrace the complexity of insti-
tutional development; the call for developing a comparative political
economy research agenda of resource-dependent institutional develop-
ment; and a brief mention of the practical relevance of the book.
1 The Complexity of Institutional Development

First, we invite the scholarly community to further open the black box of
state institutional development. With economists rediscovering that insti-
tutions matter, political scientists defying the rational-choice paradigm,
sociologists claiming that the economy and the polity are embedded in
society, and anthropologists using their methods to study “the others” as
much as “us,” eager to carry out the ethnography of the state in particu-
lar, there are plenty of space and ways for researching about and reflecting
on institutional change, and state change in particular (e.g., Granovetter
1985; Sharma and Gupta 2006; Luna et al. 2014; Hodgson 2014). We
firmly believe that the nature of the task calls for interdisciplinary dialogue.
7 CONCLUSIONS 177
Although methodologically varied and driven by different disciplinary tra-

ditions, the chapters all attempt to provide a thorough historical analysis of
social phenomena and to demonstrate that theoretical frameworks and meth-
ods effectively travel across social sciences disciplines. The research methods
used in this collection include archival work, historical analysis, political econ-
omy case study, and ethnographic work. Our contributions draw on and dia-
logue with current scholarship on how institutions evolve in the disciplines of
anthropology, economics, sociology, and political science. There have been
plenty of cross-pollination and translation, as this book shows with the use of
concepts across chapters such as “discourse,” “agency,” “political economy,”
“strategic behavior,” and “social construction.”
Our line of analysis and methodology dialogues with and enriches the
literature highlighting the complex relationship between resource devel-
opment and institutional change. We share an attempt with scholars
across the social sciences to provide nuanced, contextually rich cultural,
economic, and political analysis to the question of how institutions evolve
in resource dependence contexts. As shown throughout the chapters, his-
torical specificity and contingency are part of the explanation.
We challenge over-simplification in mainstream accounts of the rela-
tionship between institutions and natural resources (Sachs and Warner
1997; Robinson et al. 2006). Institutions matter, yes, but (i) having
“good institutions” does not equate to property rights and minimal
state; (ii) institutional legacy matters, however the quality of institu-
tions today is not the sole consequence of some pre-colonial, colonial,
or early-republican “good”/“bad” institutional setting; and (iii) study-
ing the influence of economic development on institutions is also critical
(Ballard and Bank 2003; Rodrik et al. 2003; Kurtz and Schrank 2007;
Thorp et al. 2012; Orihuela 2013; Paredes 2013). If the social sciences
are to fully engage with the possibilities and shortcomings of real-world
institutional development, and development itself, the time of the one-
size-fits-all model (i.e., the most simple rational-choice explanation
applied to every single case of institutional development over space and
time) is antiquated (e.g., Acemoglu and Robinson 2012).
In opening the black box of institutional development, the case stud-
ies show the contentious nature of this development and their gray areas.
There is a diversity of agents giving form to “the state,” even within the
group classifications that the social scientist or non-disciplined observer
inevitably makes while classifying. There is much difference and disagree-
ment within and among the state, political elites, elite policy networks,
interest groups, and indigenous communities. All social constructs evolve
and have to be explained over time. Hence, the rational-choice assump-

tion of the homogeneous political agent, borrowed from the homo-
economicus, is misplaced if one is to provide proper micro-foundations
for social change analysis. Unbounded selfish political actors are but one
possible micro-level configuration, and the chapters have certainly illus-
trated some peculiar cases, such as how the patrimonial practice in public
universities reproduces academic rent-seeking. However, other chapters
have shown professionals acting according to standards geared to the
public good.
Given that context matters and interests are not homogeneous, the
role of institutional entrepreneurs emerged as key. Cases so dissimilar as
the mining canon enactment and amendments, the rise of the function
of the conflict-management state, and the ethnic entrepreneurship of the
K’ana people in resource-rich Espinar show the importance of leader-
ship and discursive exchanges. Legacy and contingency mattered for the
development of the mining canon. In particular, this is a story of a black
box that mutates in meaning over time, thanks to institutional entre-
preneurs. There is never a start-from-scratch, but rather a conscious or
unconscious use of the material and subjective legacy of old institutions.
Contingency, in turn, provides windows of opportunity of diverse sizes.
State formation commonly takes place as a reaction to critical events,
contentious collective action in particular. With the state as a political
arena, institutional entrepreneurs work in different directions: The law-
yers of the Ombudsman’s Office have an agenda compatible with those
of the environmental regulation system, while opposed to those promot-
ing the criminalization of violence; public university cliques oppose econ-
omy and finance technocrats; and so on.
Another important point is that the evidence shows that the study
of institutions does not end with the study of formal laws and regula-
tions. There is an enforcement gap and actors struggle to translate over
and over again legal meanings into new state practice, as the evidence
marshaled shows. In education, representatives of Congress seemed
to design law genuinely believing that law creates reality. In environ-
mental regulation and conflict management, one thing is what law
declares and another is what the state is able—or willing—to enforce.
Organizations give meaning (and again meaning evolves) to rules, and
so it is better to study institutional environments than to focus on for-
mal regulation in developing countries where the state is weak. Laws
only become institutions in the proper sense of the scholarly definition
7 CONCLUSIONS 179
when state actors and/or social forces put their power and weight
behind them.
As is clear from our analysis, legacy and timing are also important, so
each country will have idiosyncratic pathways of institutional develop-
ment during resource booms. Our aim was to show the need to embrace
such complexity to fully understand institutional change; otherwise, the
shortcut of over-simplification obscures rather than clarifying the grasp
on real-world processes.
2 Comparative Political Economy

To acknowledge, complexity is not to neglect building more general,
comparative frameworks. On the contrary, we believe the three dimen-
sions we classify contribute to a research agenda of comparative analysis
of institutional development in resource-dependent political economies.
They help to approximate the extent and quality of institutional diver-
gences as much as convergences, first but not exclusively in Latin
America. New cases, of course, may show blank areas in our framework
and help to better understand the weight of each dimension.
Our first dimension, preceding power distribution of state and soci-
ety actors, is a good place to start understanding the main dynamics in a
resource boom, and the configuration of likely winners and losers. These
power configurations vary significantly across Latin American countries
and predispose different institutional outcomes. Stronger or weaker busi-
ness actors, institutionalized and articulated political parties on the left
and right, different configuration of power across state agencies and state
enterprises, and the presence and territorial reach of civil society groups,
unions and social movements in particular, will shape distinct patterns of
institutional development.
Countries with stronger left-wing parties and unions, for example,
are expected to put more redistributive policies under debate, as well as
more implementations of those policies approved. Strong business actors
that benefit from the resource boom will constitute stronger limits to
the development of new regulatory institutions. States that conducted
more comprehensive decentralization processes before the boom or that
did not dismantle developmental state institutions as fully as did Peru
between 1990–1993 could have better prospects or balancing interests
during the resource boom and building (or maintaining) more stable
institutional frameworks. Strong clientelist parties may push for further

redistribution but with little effect on long-term development.
The example of contemporary Bolivia, for example, where social
actors demanded more redistributive institutions and mining activities
were re-nationalized, may only be understood by looking at the power
and articulation of social movements, traditional political parties, and pri-
vate actors before the boom. These antecedents explain how and why
a new left-wing party government was able to gain power just when
mineral and gas prices started to climb. The Movimiento al Socialismo
(MAS), led by indigenous leader Evo Morales, used these resources to
reshape considerably redistributive rules in the country. At the same
time, strong political actors led their implementation in directions not
always compatible with the reinforcement of independent, professional,
state agencies.
Or consider Colombia, where even though private mining and oil
actors grew stronger in the nineties and have been at the forefront of
debates, environmental and participative institutions had developed
before the boom, enabling the Colombian state to bring in stronger reg-
ulations for private activities. In Ecuador, a poor history of decentraliza-
tion also explains how and why a left-wing party government was able
to retain central control of fiscal income when oil prices started to rise.
Power configurations are crucial for understanding the different roads
taken or not taken, and comparative analysis allows us to fully grasp the
weight of these actors in the outcomes.
Similarly, our second dimension, historical repertoires of state and
society action, further contributes to the comprehension of how institu-
tions evolve during booms. State and society repertoires provide men-
tal-maps, blueprints, and imagery for actors to advance institutional
development. As mentioned above, they never start from scratch. Past
experiences, existing institutions, even if used for different purposes,
will shape the ways in which benefit and cost-bearing institutions are
debated, adopted, and enforced. In Bolivia, the old “cooperative” was
adopted as the proper institutional form for new and numerous associa-
tions of gold miners that had little to do with traditional cooperatives.
Such cooperatives are unlikely to emerge in Chile or Brazil, where that
type of social organization has never existed in the extractive industry.
Or consider the case of legal institutions for indigenous peoples. In
Colombia, half a century ago, the “resguardos” were embraced as the
legitimate territorial and political organization of indigenous peoples
7 CONCLUSIONS 181
under the jurisdiction of the old Ministry of the Interior. Neither Ecuador
nor Peru has resguardos, despite sharing the Amazon basin. Peru has
“native communities,” established in the law in the 1970s. Four decades
later, in the context of the politics of prior consultation, pro-extractive
industry interests want to equate “indigenous peoples” with “Amazonian
peoples living in native communities.” Andean indigenous communities
(formerly “Indian communities”) were legally re-baptized as “peasant
communities” in the 1970s land reform. The Ministry of the Interior was
not part of this story, because it is a historically weak state sector, with a
limited scope of action.
Finally, our third dimension, the entrepreneurship of actors embed-
ded in transnational networks, helps understand the different ways in
which institutions evolve. In Colombia as in Peru, the strong reach of
the human rights civil society developed a critical source of institutional
entrepreneurship. In Bolivia and Ecuador, social movements were rela-
tively more independent of transnational activist networks but were fairly
dependent on the financial support of the state. Different political econ-
omies emerge from such settings.
We have extensively argued that the presence of transnational net-
works is a key element to understand the possibilities of institutional
change. Even though Peru looks more papist than the Pope, the fact that
the Ministry of Economy and Finance technocrats have little imagination
for building up new developmental state institutions can be understood
as a logical consequence of the conventional wisdom still reigning in the
economics profession.
Given the downturn in commodity prices, a tempting and obvious
future project would be to study the different institutional pathways
in times of resource bust. This research agenda may start from within-
case comparison and move to regional comparative studies. Regarding
within-case studies, several questions emerge that could be answered
using longitudinal analysis. Will the annotated institutional developments
persist, or decay? Which social groups and policy agendas will be suffi-
ciently strong to survive the downturn, and which will not? And how
and why has the state changed in comparison with its pre-boom nature?
And with regard to comparative analysis, case comparisons will provide
us with answers to questions such as which countries benefited more
from the boom cycle and what new problems emerged out of legacies of
the boom. We hope our framework can contribute to these analyses and
at the same time be enriched by them.
3 Practical Relevance
Besides its academic orientation, our research also aims to be of inter-
est to the concerned citizen by proposing a critical and comprehensive
picture of how institutional development takes place. This collabora-
tive research project came into being at the end of a cycle of high eco-
nomic growth rates and intense socio-political discontent, as presented
in the Introduction. Related to this, the idea that national institutions
are a failure is an opinion widely shared among Peruvians. Similar nar-
ratives can be heard around the developing world with different tones:
Not everybody is happy with resource-based growth, and there is much
concern over the negative influence of resource dependence on institu-
tions. Others, on the contrary, celebrate economic growth and equate it
with national development, believing that a resource bonanza will end up
bringing “good institutions” to the country.
We hope the general public will welcome new evidence and fresh per-
spectives on how institutions evolve with resource boom-and-bust cycles.
The conclusion we offer is not the kind that assigns either absolute losses
or huge and self-evident benefits to the resource boom, as uncritical or
manipulative political actors tend to do in Peru and elsewhere. Quite fre-
quently the positive effects of economic growth are equated with strong
and effective institutions, not considering the problems of our current
institutions for enhancing long-term, fairer, and more environmentally
friendly economic development. We aim to provide the public with a
more accurate diagnosis of the difficulties of building institutions which
are to the benefit of all, and how positive institutional development
requires much more than economic growth.
Throughout our analysis, we point to some interesting and democra-
tizing institutional developments resulting from a bonanza, such as state
capacity to provide new public works and services, efforts to strengthen
state agencies, new processes of decentralization, and the struggle to
enable local communities and indigenous peoples to exercise more
rights. Nonetheless, we share a sense of dissatisfaction with the institu-
tional and developmental results of the boom. This sense of dissatisfac-
tion is based on the strong continuities that the process has shown with
regard to institutional development.
Peru exemplifies a weak neoliberal state. As we have shown, in addi-
tion to a historical legacy of state failure and absence, the Lost Decade
of the 1980s and the structural reform of the 1990s ended up shaping
7 CONCLUSIONS 183
a particular variety of neoliberal state-making. Past state failure, the cri-

sis of political violence and hyperinflation opened the way to a further
contraction of state action in the decade of structural reform. It was the
birth of the “cement state,” a state in which economic growth and infra-
structure provision mattered above anything else. State capacities to edu-
cate or diversify the regional economy were of much lesser concern, and
regulating the environment or strengthening indigenous peoples’ rights
was not high priorities in the public debate. Corruption, to talk about
historical continuities, kept growing and now flourishes decentralized
and—compared with the guano age—democratized.
For the last twenty-five years, Peru has epitomized how economic
growth does not itself bring institutional development different from
that which follows the existing economic growth pattern. We hope
our work contributes to nurture a much absent public debate on
the centrality of institutions. Our evidence suggests that given the
intricate and conflictive processes during a boom, it may be that the
best time to rethink deeply rooted state and society action is during
a bust, like the one now starting. We hope that the next economic
boom will find Peru better institutionally prepared to face the ten-
sions and challenges that come with windfalls, to make the best of
these opportunities, and to break the historical pattern of state failure
because behind state failure there has to be the failure of its embed-
ding society.
References
Acemoglu, Daron, and James Robinson. 2012. Why Nations Fail: The Origins of
Power, Prosperity, and Poverty. New York: Crown Publishers.
Ballard, Chris, and Glenn Banks. 2003. Resource Wars: The Anthropology of
Mining. Annual Review of Anthropology 32: 287–313.
Granovetter, Mark. 1985. Economic Action and Social Structure: The Problem
of Embeddedness. American Journal of Sociology 91 (3): 481–510.
Hodgson, Geoffrey. 2014. On Fuzzy Frontiers and Fragmented Foundations:
Some Reflections on the Original and New Institutional Economics. Journal
of Institutional Economics 10 (4): 591–611.
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Measures, and Mechanisms. Journal of Politics 69 (2): 538–554.
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America Political Economy: Making Sense of a New Reality. Latin American
Politics and Society 56 (1): 1–33.
Paredes, Maritza. 2013. Shaping State Capacity: A Comparative Historical Analysis

of Mining Dependence in the Andes, 1840s–1920s. PhD thesis, Department of
International Development, University of Oxford.
Robinson, James, Ragnar Trovik, and Thierry Verdier. 2006. Political Foundations
of the Resource Curse. Journal of Development Economics 79: 447–468.
Rodrik, Dani, Arvind Subramanian, and Francesco Trebbi. 2003. Institutions
Rule: The Primacy of Institutions Over Geography and Integration in
Economic Development. Journal of Economic Growth 9 (2): 131–165.
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Reader. Oxford: Blackwell.
Maritza Paredes. 2012. The Developmental Challenges of Mining and Oil:
Lessons from Africa and Latin America. Basingstoke, UK: Palgrave Macmillan.
Orihuela, José Carlos. 2013. How do ‘Mineral-States’ Learn? Path-dependence,
Eduardo Dargent is an associate professor of political science at Pontificia
Universidad Católica del Perú. His main teaching and research interests are
comparative public policy, political economy, and the state in the developing
world. He has published inComparative Politics, the Journal of Latin American
Studies, the Journal of Democracy. His book Technocracy and Democracy in
Latin America (New York: CUP) was published in 2015. He received a PhD in
Political Science from University of Texas, Austin.

in Comparative International Development, World Development, the Journal
of Institutional Economics and the Journal of Latin American Studies, among
other outlets. Two of his articles were awarded by the Economics and Politics
Section of LASA. He co-authored The Developmental Challenges of Mining and
Oil: Lessons from Africa and Latin America (Palgrave 2012) and has contributed
to various edited volumes. He received a PhD from Columbia University, New
York.

7 CONCLUSIONS 185
University.

ANNEXES
Annex 1
See Tables A1.1 and A1.2.
Table A1.1 The Canon legislation 1969–2002
Law Definition of the canon Criteria, percentage,

and base
1969 This canon does not have a strict 1.5% of F.O.B. value
D.L 18076 canon form, because it is not of each export. It was
Fisheries Canon geographically circumscribed. increased to 3% and after
Velasco’s Military However, it is relevant because a crisis in the sector is
Government this nationalist use of the canon lowered to 2%
tax was later translated to the
regionalist one
1976 First Canon. The geographical 10% ad-valorem on
D.L. 21678 circumscription is justified by the total production of
The oil canon for Loreto the particular situation of Loreto oil for ten years. The
Morales Bermudez’s department, which has been payment is completed by
Military Government historically left behind PETROPERÚ, a state-
owned oil company
1979 Defined as a fair share for the No percentage is speci-
Article 121 of the Peruvian producing region of income cre- fied. Only indicates that
Political Constitution ated by exploitation of resources. it should be a “fair
Constitutional Assembly The processing of resources share”
should take place, by preference,
in the producing zone
(continued)
© The Editor(s) (if applicable) and The Author(s) 2017 187

Latin American Political Economy, DOI 10.1007/978-3-319-53532-6
188 Annexes
Table A1.1 (continued)

and base
1980 It was not named Canon, but Ad-valorem tax, a 3%
D.L. 22916 it had the same canon-form of applied to the price of
Gold Canon for Madre de the Loreto’s oil canon. It was gold that the Banco
Dios justified by the particular and dif- Minero acquired from
Morales Bermudez’s ficult situation of Madre de Dios, Madre de Dios miners
Military Government which contrasts with the gold
resources this department gives
to the whole country
1982 Emphasizes that canon money Changed from “until ten
Law N° 23538 is solely for investments in the years” to “until deple-
Modification of Oil Royalty development of Loreto tion resources”
1980–1985 Congress
1983 It is the first development of 10% of rent, which was
Law N° 23630 Article 121 of the Constitution, increased the follow-
Piura and Tumbes Oil which uses the word “rent” to ing year to 12.5%. This
Canon refer to what is shared between participation of “rent” is
1980–1985 Congress the state and regions defined similarly as the
ad-valorem tax of the
Loreto’s canon
1985 Rent is interpreted as the totality No less than 20% of
Law N° 24300 of direct taxes received by the “rent.” The govern-
Specification of state from extractive opera- ment is responsible for
Constitutional Article 121 tions. But this specification is fixing the particular
1980–1985 Congress only applicable to future canon, percentage for each case
because there is a clause, which and resource through
protects the regulations of the Supreme Decree
gold and oil canon
1992 It is defined as a specification of 20% of the Income Tax
D.S. Nº 014-92-EM Article 121 in terms of redistri- received from mines
Reform of Mining Law bution of income tax received
Fujimori’s Government by the state
1993 A fair share in income tax result- No specific percentage;
Article 77 of the Peruvian ing from exploitation of the redistributed income is
Political Constitution royalty resources. Changes with the income tax
Democratic Constituent the last Constitution include:
Congress (1992–1995) the article is now in the Budget
section, not in the Natural
Resources section; income is
changed to income tax; and there
is no longer any clause about the
processing of resources
(continued)
Annexes 189

and base
1994 The future sum of canon money There is no percentage
Law Nº 26390 is protected with the regulation specified, but it indicated
About canon sum that it cannot be less than the a minimum limit. At the
Democratic Constituent 1994 sum. If the sum is not cre- same time, it empha-
Congress (1992–1995) ated by tax recollection, then the sized that the State is in
state pays it (renta ficta) charge of paying royal-
ties to regions, not the
companies
D.S. Nº 88-95-EF 1995 Resources resulting from canon 20% of the Income Tax
Supreme decree which can only be used in investment
develops Article 77 expenses
Fujimori’s Government
1995 Income tax as the base for canon
Law Nº 26472 redistribution is changed for the
Reform of Article 77 of the “total of incomes and rents”
Constitution received by the state for the
extraction of resources
2001 Regulates the already established 50% of the total of
Law Nº 27506 mining canon, and also creates incomes and rents
Canon Act the Gas, Forest, and Fishery received by the State from
2000–2001 Congress Canon. The Oil Canon is unaf- extractive activity. This
fected by this new regulation, as canon is unaffected by tax
it happened in 1985 breaks for income tax
2002 Suspends the regulation where the
Emergency Decree Nº1 canon is established as unaffected
Amends the Canon Act by tax breaks, reaffirming that the
Toledo’s Government canon is a responsibility of the state
and does not affect companies
Source Peruvian Congress
Table A1.2 Variation in Canon distribution indexes 2001–2004
27506 Law (2001) 28077 Law (2004) 28332 Law (2004)
Valentin Paniagua’s Alejandro Toledo’s Alejandro Toledo’s

Government Government Government
Criteria: Rural population Criteria: Size of the popula- Criteria: Size of the popula-
and density tion, basic needs, and infra- tion and basic needs
structure deficit
(continued)
190 Annexes

27506 Law (2001) 28077 Law (2004) 28332 Law (2004)
Distribution: Distribution: Distribution:
20% for District councils of 10% only for mining 10% only for mining district.
mining provinces. district 5% for state universities of
60% for district and province 5% for state universities of the region
councils of mining regions. the region 25% for the District coun-
20% for regional government 25% for the District councils of mining provinces
cils of mining provinces without excluding mining
excluding mining districts districts
40% for district and prov- 40% for district and province
ince councils of mining councils of mining regions,
regions, without excluding without excluding mining
mining provinces. provinces.
20% for regional govern- 20% for regional govern-
ment ment
Adapted from Barrantes et al. (2010)
Annex 2
See Tables A2.1 and A2.2.
Table A2.1 Oil Canon (in thousands US Dollars)

Year Canon distributed Variation
1989 19,658
1990 75,853 2.86
1991 56,918 −0.25
1992 56,153 −0.01
1993 53,493 −0.05
1994 72,851 0.36
1995 77,114 0.06
1996 98,498 0.28
1997 86,480 −0.12
1998 51,596 −0.40
1999 70,138 0.36
2000 116,985 0.67
2001 95,093 −0.19
2002 104,113 0.09
2003 115,075 0.11
(continued)
Annexes 191

2004 128,829 0.12
2005 181,216 0.41
2006 218,258 0.20
2007 242,438 0.11
2008 331,605 0.37
2009 202,725 −0.39
2010 271,193 0.34
2011 360,335 0.33
2012 531,096 0.47
2013 468,481 −0.12
Source INEI, Anuario Estadístico de Hidrocarburos del Minsterio de Energía y Minas, Perúpetro
Table A2.2 Mining
Canon (in thousands of
Peruvian Nuevos Soles) 1996 15,375 ????
1997 110,937 6.215
1998 169,428 0.527
1999 86,514 −0.489
2000 55,361 −0.360
2001 81,278 0.468
2002 135,933 0.672
2003 285,826 1.103
2004 451,289 0.579
2005 888,140 0.968
2006 1,746,378 0.966
2007 5,157,001 1.953
2008 4,435,674 −0.140
2009 3,434,452 −0.226
2010 3,086,988 −0.101
2011 4,156,857 0.347
2012 5,097,315 0.226
2013 3,800,819 −0.254
Source SUNAT
192 Annexes
Annex 3
See Table A3.1.
Table A3.1 Norms and international guides for enterprise-community relation-

ships
Year Actor Institution/Project/Norms
1976 Organization for Economic Guidelines for Multinational Enterprises

Co-Operation (I)
Co-Operation (II)
1982 World Bank Operational Manual Statement (OMS
2.34)
1984 Office of the United Nations—Centre Draft UN Code for Transnational
for Transnational Corporations Corporations
Co-Operation (III)
1989 International Labor Organization (ILO) Convention 169
Co-Operation (IV)
1992 Office of the United Nations Rio Declaration on Environment and
Development
1999 Office of the United Nations Global Compact Project
Co-Operation (V)
2000 Institute for Environmental and Mining Mineral and Sustainable
Development Development Project
2003 Office of the United Nations Norms on the Responsibilities of
Transnational Corporations and Other
Business Enterprises with Regard to
Human Rights
Source ¿dónde está la fuente?

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Index
A Clientelism, 72, 82, 85, 87

Adaptation, 99 Commodity boom, 2, 4, 11, 12, 19,
Agency, 41–43, 48, 50, 63 24, 25, 27
Amazon, 42, 46 Conflict, 1–4, 8, 9, 11–13, 19, 23,
Andes, 107, 110, 113 24, 27
Arequipa, 70, 78, 86, 88 conflict management, 120–122,
132, 134, 139, 141
conflict prevention, 120–122, 132,
B 134, 139
Benefit management institution, 2, 3, socio environmental conflict, 119,
10, 15, 16, 19, 21, 25 121–123, 126, 130, 131, 136,
Bureaucratic autonomy, 100, 101, 139–141
106, 108–111, 113 Conflict management, 3, 12, 23, 27
Bureaucratic entrepreneurial ac tors, Congress, 43, 52, 54, 55, 57–59, 61
121 Constitution, 42, 49–55, 57, 60
Consultation, 3, 12, 20, 24, 25, 27,
28
C Contingency, 41–43, 47, 48, 52, 58,
CONAM, National Commission of 62, 63
the Environment, 97, 99, 100, Contraloría General de la República,
102, 103, 106, 109 101
Canon, 3, 5–8, 10, 19–22, 25, 27 Cost management institutions, 2, 3,
Canon funds 10–12, 15, 16, 19–21, 21, 27
research funds, 69, 70, 81, 84, 86, Critical juncture, 97, 102, 104
88, 89 Culture
Canon minero, 41 interculturality, 166

204 Index
Cuzco, 70, 80 Hydrocarbons, 2, 3, 6, 7, 9–11, 18,

25
D
Decentralization, 42–47, 51, 52, 54, I
55 Identification, 156, 161, 162, 167
Decoupling, 100, 104 Incremental, 97, 99, 113
De-indianization, 168 Indigenous
Diffusion, 99, 102 indigenous politics, 154
Dirección General de Asuntos indigenous rights, 154, 156, 162,
Ambientales (DGAA), 100–102, 163, 165, 166, 168–170
105–109, 112 Institutional
institutional development, 175–177,
179, 180, 182, 183
E institutional entrepreneurship, 175
Economic crises Institutional change, 3, 23, 24, 27
financial crisis, 42, 62 Institutional development, 2–4, 10,
oil crisis, 42, 48, 52, 62 11, 14, 16, 20, 21, 24
EIA, 104, 105, 109, 112 Institutional entrepreneurs, 43, 44, 50
Embeddedness, 175, 176, 181, 183 Institutional regime, 41
Enforcement, 96, 102, 104, 105, 107, Institutions, 1, 3, 4, 8–16, 18–21,
111, 112 23–28, 41, 54, 63
Environmental impact assessment institutional blueprints, 99
(Estudio de Impacto Ambienal institutional evolution, 99, 112
EIA), 124–127 institutional layers, 97, 112
Environmental regulation, 3, 11, 24, Interethnic Association for the
27 Development of the Peruvian
Espinar, 154–168, 170 Jungle (AIDESEP), 166
Extractive industries, 2, 3, 5, 9, 10,
12, 14, 16, 18, 21, 24, 27
K
K’ana nation, 154
F
Free Trade Agreement, 102, 110
Fujimori, 42, 47, 52, 54, 56, 57, 59, L
60, 62 Law impact, 92
Legacy, 41–43, 45–47, 60–63
Loreto, 46–51, 54, 56
H
Historical events, 42
Historical repertoires of state and
society action, 175, 180
Index 205
M The Peruvian Office of National

Meaning, 43, 50, 55, 58, 60, 62, 63, Dialogue and Sustainability,
98 ONDS, 119, 138–141
Ministerio de Energía y Minas Peruvian state, 2, 5, 10, 11, 21
(MEM), 125 Political economy, 99, 100, 103, 176
Ministry of Economics and Finance Comparative Political Economy,
(MEF), 71–74, 76, 77, 79, 81, 176, 179
82, 84, 88–91 Political opportunity, 42, 43, 51, 62
Ministry of Energy and Mining, Political opportunity structure, 99,
100–107, 113 102
Power distribution of state and society
actors, 175, 179
N Prior consultation, 154, 156, 157,
National Assembly of Academic Deans 161–166, 169, 170
(ANR), 75, 88, 90 Public university, 82, 85
National Code of the Environment
and Natural Resources, 103
National Law of the Environment, R
111 Regionalism, 43, 47, 48, 50, 52
National congress, 68 Regulation, 95, 100–105, 107–111,
Natural disasters 113
El Niño, 42, 51, 52 Resource boom, 176, 179, 182
earthquake, 46 Resource curse, 2, 4, 13
Natural resources, 41, 42, 44, 47, 50, Resource use in research, 70, 76, 77,
52, 55 79, 80, 83, 84, 88, 91
Round tables, 129
Rules, 97–101, 103–105, 105,
O 111–113
OEFA, 100, 106, 109–113
OSINERG, 100, 108
OSINERGMIN, 100, 106, 108–111, S
113 San Antonio Abad State University,
Ombusmand (Defensoría del Pueblo), 70, 80
115, 117, 133 Spending control, 71, 72, 89
Organizations, 97, 98, 100, 104, 112, State, 97–105, 107–113
113 cement state, 176, 183
state action, 176, 183
P
Paniagua, 42, 58, 59 T
Participation, 154–158, 160, 161, Tax, 41, 43–45, 48, 51–63
169, 170 Technocrats
economic technocrats, 89
206 Index
Rigid Technocrats, 82 W
Translation, 99, 100, 104 Weak political actors
Transnational networks, 4, 16, 19, 23, national actors, 70
24, 169, 175 regional actors, 70
Weak universities, 70–72, 82, 85
World Bank, 103, 104, 107
V
Velasco, 47, 50, 54

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Translation and proofreading: Evelyn Frances Brickfield McCoy and

1 Cycle of Abundance and Institutional Pathways  1

2 Deeply Rooted Grievance, Varying Meaning:

3 Extracting to Educate? The Commodities Boom, State

4 Fragmented Layering: Building a Green State

5 The Social Construction of a Public Problem:

6 Ethnicity Claims and Prior Consultation in the

About the Editors

co-authored The Developmental Challenges of Mining and Oil: Lessons

Noelia Chávez Ángeles Pontificia Universidad Católica del Perú, Lima,

José Carlos Orihuela Pontificia Universidad Católica del Perú, Lima,

1 Cycle of Abundance and Institutional Pathways

3 Extracting to Educate? The Commodities Boom,

4 Fragmented Layering: Building a Green State

5 The Social Construction of a Public Problem:

1 Cycle of Abundance and Institutional Pathways

3 Extracting to Educate? The Commodities Boom,

Cycle of Abundance and Institutional

Eduardo Dargent, José Carlos Orihuela, Maritza Paredes

E. Dargent (*) · J.C. Orihuela · M. Paredes · M.E. Ulfe

© The Author(s) 2017 1

literature has been particularly eloquent about the challenges of growth

Fig. 1 History of mineral exports in Peru (1890–2010). Source Elaboration of

Table 1 Type of institutional regimes and cases

Benefits management Costs management

Canon Environmental regulation

6% annually), based on the exportation of minerals (gold and copper) and

of benefits, by creating institutions to decide over the canon and non-

1 Economic Abundance and Social Unrest

Fig. 4 Canon budget by government (includes SobreCanon, Royalties, and

at different levels (regions, provinces and districts), the canon contributed

Fig. 5 Increase of socio-environmental conflicts in Peru (2004–2012) (in num-

The other face of economic growth based on natural resources has

p. 13). Indigenous communities of the highlands and Amazon have been

2 Institutional Developments in the Cycle

This book studies diverse institutional state developments propelled by

Table 2 Different types of canona

Type of canon How much does it constitute?

producing provincial governments (25%), producing district govern-

offices in the Prime Minister’s office. All of these institutional transforma-

resulting institutional regimes in a cycle of abundance include changes as

3 Literature and Research Questions

Other literature highlights the role of institutions, but without see-

the implementation of institutions aimed to manage the benefits and cost

of this book, we aspire to contribute to a comparative dialogue that can

4 Arguments of the Book

4.1 Preceding Power Distribution of State and Society Actors

Table 3 Shaping the arena for institution building

Explanatory dimensions Institutions to manage

boom: the strength of business, of state agents, of political parties, and of

At the same time, political parties were weak and disarticulated

this way, political actors strengthened by the circumstances took advan-

organizations also did not help to advance the enforcement of these

4.2 Historical Repertoires of State and Society Action

power interests are behind law-making; the observation is that there is

4.3 The Entrepreneurship of Actors in Transnational Networks

1 Cycle of Abundance and Institutional Pathways 1

2 Deeply Rooted Grievance, Varying Meaning:

3 Extracting to Educate? The Commodities Boom, State

4 Fragmented Layering: Building a Green State

5 The Social Construction of a Public Problem:

6 Ethnicity Claims and Prior Consultation in the

1 Cycle of Abundance and Institutional Pathways

1 Cycle of Abundance and Institutional Pathways

3 Extracting to Educate? The Commodities Boom,

Cycle of Abundance and Institutional

E. Dargent (*) · J.C. Orihuela · M. Paredes · M.E. Ulfe 

Fig. 1 History of mineral exports in Peru (1890–2010). Source Elaboration of

Table 1 Type of institutional regimes and cases

1 Economic Abundance and Social Unrest

Fig. 4 Canon budget by government (includes SobreCanon, Royalties, and

Fig. 5 Increase of socio-environmental conflicts in Peru (2004–2012) (in num-

2 Institutional Developments in the Cycle

Table 2 Different types of canona

3 Literature and Research Questions

4 Arguments of the Book

4.1 Preceding Power Distribution of State and Society Actors

Table 3 Shaping the arena for institution building

4.2 Historical Repertoires of State and Society Action

4.3 The Entrepreneurship of Actors in Transnational Networks

5 Book Methodology and Chapters

4. Toward 2006, private investment in mining was 8,308 million, and

S. Gruber · J.C. Orihuela (*) 

1 Notes for a History of the Canon’s Pre-history

2 1971–1983: From Nationalism to Regionalism

2.2 The 1979 Constitution and Return to Democracy

3.1 The First Law on Canon

3.2 The New Policy Context of Structural Adjustment

4 1994–2014: Back to Canon Struggle, New Policy

4.1 Piura and Tumbes Mobilized, Constitution Amended

8. See Diario de Debates de la Comisión de la Asamblea Constituyente de

Extracting to Educate? The Commodities

E. Dargent Bocanegra (*) · N. Chávez Ángeles 

2 Commodity Boom, State Construction, and the

3 The Canon and State Universities: Amounts,

Article 6. Section 2. (…) Regional governments will surrender 20%

Table 1 Canon resources transferred to state universities, 2004–2013a

Fig. 1 Canon resources transferred to state universities, 2004–2013 (in mil-

Table 2 Use of resources from canon transfers 2004–2012a

Table 3 Ten universities with greater resource allocation of canon resources

Table 4 Executed canon in 2011 in investment projects and research in state

4 Determinants of Failure: Voluntary Congress,

4.1 Congress of the Republic