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Problems of Development in Peru*

Published online by Cambridge University Press:  02 January 2018

Milton C. Taylor
Milton C. Taylor*
Affiliation:
Department of Economics, Michigan State University
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Extract

During the last national election in Peru, one of the candidates charged that the Indians probably lived better under the Inca rulers. Rather than being political hyperbole, this observation points up the stark reality which is the root cause of Peru's economic and social problems. With a relatively thin middle class, Peru's population of about 11.6 million is largely polarized into a small elite, whose wealth is conspicuous even by Latin American standards, and the larger proportion of the population living in the high sierra or in the slums surrounding each coastal city, which barely manages to exist under conditions of abject poverty. This skewed distribution of wealth and income, long apparent even to the most casual observer, has been confirmed by a recent study which indicates that the top 10 per cent of the spending units receive 60 per cent of the disposable income, and 8,760 spending units, representing only .25 per cent of the total, receive 35 per cent of the income.

Type
Research Article
Information
Journal of Inter-American Studies , Volume 9 , Issue 1 , January 1967 , pp. 85 - 94
Copyright
Copyright © University of Miami 1967

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Footnotes

*

In 1965 the author directed a fiscal survey of Peru for the Joint Tax Program of the Organization of American States and the Inter-American Development Bank, after having directed similar surveys in Panama (1962) and Colombia (1963). See Milton C. Taylor and Raymond L. Richman, “Public Finance and Development in Colombia,” Journal of Inter-American Studies, VIII, No. 1 (January 1966), 11-33.

References

1 Eugene A. Brady, “La distribución de la penta monetaria agregada en el Perú”, National Planning Institute, Lima, mimeographed, August 31, 1965.

2 See Ojha, P. D. and Bhatt, V. V., “Pattern of Income Distribution in an Underdeveloped Economy; A Case Study of India,” American Economic Review, September, 1964, pp. 714-15.Google Scholar

3 Within recent years, Peru has had two series of national income accounts, one developed by the Central Bank and the other by the National Planning Institute. Data used in this article are from a series revised by the Central Bank in 1965.

4 Census data are from the Boletín de Análisis Demográfico, Instituto Nacional de Planificación, noviembre, 1964, p. 57.

5 Cost-of-living indices are for Lima-Callao and are from Precios e indice de precios, Instituto Nacional de Planificación, enero, 1965, pp. 25-30.

6 Ibid.

7 Readers wishing to pursue the monetarist-structuralist debate on inflation in Latin America are referred to Hirschman, Albert O., Editor, Latin American Issues (New York: The Twentieth Century Fund, 1961)Google Scholar and Powelson, John P., Latin America: Today's Economic and Social Revolution (New York: McGraw-Hill, 1964).Google Scholar

8 Deficits rose from S/901.4 million in 1962 to S/2,154.4 million in 1964, and probably reached a level of S/3,000 million in 1965. These are calculations based on the Cuenta General of the Contraloria General de la República and Central Bank estimates.

9 See Project for the Inventory and Evaluation of the Natural Resources of Perú, National Planning Institute, Peru, July, 1963, and Ford, Thomas R., Man and Land in Peru (Gainesville: University of Florida Press, 1962).Google Scholar

10 For data on economic planning, see Análisis de la realidad socio-economica del Perú, Vol. VI, julio, 1963; Documento de trabajo del programa de inversiones públicas 1964-65, abril, 1964; and Programa de inversiones públicas 1964-65, Vol. I y II, junio 9, 1964. The “Committee of Nine” of the Organization of American States also reviewed the 1964-65 public investment program of the National Planning Institute. See Evaluación del programa de inversiones públicas 1964-65 del Perú, Comite de los Nueve, Washington, D. C , octubre, 1964.

11 Evaluación del programa de inversiones públicas 1964-65 del Perú, p. 14.

12 As of August, 1964, there were 246 autonomous agencies. The available evidence suggests that the aggregate receipts of the autonomous agencies are approximately two-thirds the size of central government revenues.