Anti-Corruption Windows of Opportunity in Peru

As a part of its ongoing efforts to find quick solutions to specific corruption challenges, the Center for International Private Enterprise’s Rapid Response Community of Practice focused on Peru in its latest quarterly gathering. The event was a private one, with speakers granted anonymity to encourage a frank and insightful discussion. The three speakers have also allowed us to share an unattributed summary of their collected remarks, which are presented below. Speakers included Samuel Rotta, Executive Director of Proética, the Peruvian chapter of Transparency International; Diana Chavez, an expert on anti-corruption at Transparencia; and Julio Guzman Caceres, Reagan-Fascell Fellow of the National Endowment for Democracy,  former Secretary General of the Peruvian Prime Minister’s office, and two-time presidential candidate.

 The Rapid Response Community of Practice is a quarterly convening of anti-corruption activists, practitioners, donors, and academics to discuss breaking anti-corruption news. The Community of Practice serves as a space for candid, insightful discussion on opportunities for anti-corruption, making connections with thought leaders, and coordinating rapid response interventions among multiple stakeholders.

Is there a window for anti-corruption reform in Peru?

Opinions diverge on the presence of a window of opportunity. As trust in the national government and Peruvian Congress is extremely low, there may be opportunities for reform at sub-national levels of government. Reforms at the local level, including increasing access to information and training citizens to use existing transparency tools, can catalyze a bottom-up movement for anti-corruption reform in the country. Others suggested that reform must come at the national level first, although many experts are skeptical of national level reform. Some responses emphasized the need to enforce and implement existing legislation instead of developing new mechanisms, as Peru’s anti-corruption legal framework generally meets international standards. The discussion then led to the reasons for corruption, areas requiring major reform, and how these reforms might be achieved.

It Starts in the Legislature

While Peru leads Latin America in anti-corruption legislation and regulation passed, enforcement is lacking, to the extent that panelists consider its absence the main barrier to combating corruption. The problem is rooted in a constitutional framework that provides significant powers to the national Congress, including presidential impeachment, but requires few qualifications to stand for office. For example, more than half of its members from 2016 to 2021 were under investigation for bribery, money laundering, and other crimes. Other rules for the legislature favor wealthy candidates, such as single-term limits and open-list proportional representation. Political parties can earn official recognition within the legislature after winning just five percent of votes cast. The result, as one speaker suggested, is that “many political parties are created as essentially start-ups for corruption, and party leaders typically barter their loyalties to special-interest groups of all kinds, including illegal mining and fronts for narcotrafficking.”

These challenges in the legislature create significant public mistrust of national political parties, and constrain the ability of the executive and judicial branches of government to combat corruption. Community of Practice participants recommended legislative reforms such as increasing the requirements for political parties to remain registered and eligible to participate in elections, reforming the preferential-voting system and addressing a divergence between representation in Peru’s congress based on first-round voting and the second-round vote’s actual results. In general, it is necessary to design an electoral system that incentivizes candidates to tackle corruption.

Improving Institutions

In the executive branch of government, anti-corruption reform is hindered in multiple ways, including a poor public procurement system, as the law dictates that procurement officers prioritize cost over quality, which often leads to less-qualified contractors winning bids and producing substandard outcomes. The executive also has not created registries for a variety of sectors, such as a land registry. This absence creates opportunities for corruption through opacity.

The government also does not have an effective e-governance system. Agencies and departments maintain data on systems that are not interoperable, and therefore lack the opportunity to share information and work together. Some panelists believe this problem was created on purpose, to preserve opportunities for corruption among bureaucrats and elected officials.

The overall increase in opacity created by the absence of these important transparency tools is compounded by the lack of prosecutorial power. Peru does not have an anti-corruption prosecutor’s office with the resources to fight corrupt practices. Instead, there is a small office with very limited powers that can be disbanded at any time.

Judicial Corruption

Potential corruption in the Peruvian judiciary comes from different sources; it is caused by some judges’ individual willingness to engage in corruption, the co-optation of the judiciary by the executive branch, and the political pressure that independent judges are permanently exposed to from powerful national authorities. For that reason, it is not a surprise that Peruvians perceive the judiciary as the most corrupt institution (34%), only after Congress (60%) and the Executive (42%), according to a Proetica survey. Judges are appointed to a two-year term, and this provides opportunities for the executive branch to exercise power over the judiciary by installing new and favorable judges. Aggravating this issue, prosecutors are sometimes appointed without sufficient experience, worsening the problems created in the absence of a standing anti-corruption prosecutor’s office.

Power to the people

Citizen empowerment and participation is needed to deter corruption, and corruption is an issue that often drives people to engage in civil society. Peruvian civil-society organizations fighting corruption, such as Transparencia and Proetica, have demonstrated the potential of campaigns to enlist and empower people. After devastating floods in 2018, Transparencia trained 700 Peruvians to monitor more than 1,200 public works projects, leading to an 80% drop in discrepancies in associated project spending. Increasing citizen engagement at the local level can catalyze momentum for national level anti-corruption reform in Peru.

The private sector can also play a role in anti-corruption reform. Business associations championing anti-corruption standards and practices can create a domino effect among other businesses and individuals. CIPE’s Andean Regional Anti-Corruption project (2021-2022) made clear the private sector’s willingness to tackle anti-corruption challenges in public procurement.

Image credits: Cesar Gutierrez on Unsplash