Peru is at a crossroads. The country is reeling from a surge in violent crime and a series of economic missteps that threaten its hard-won fiscal stability. These are not isolated policy failures; they are symptoms of a deeper issue. Despite nearly two decades of building a capable, evidence-savvy policy community, Peru finds itself confronting the stark consequences of poorly informed—and often deliberately damaging—decisions.
The instinctive response might be to call for more evidence. But what if the problem isn’t a lack of knowledge? What if the problem is that the political system is no longer listening?
This story is not uniquely Peruvian, as I discovered through conversations with think tanks from around the world at the 2025 On Think Tanks Conference. It mirrors trends across Latin America and beyond, where the relationship between evidence and policy is being tested—and, in many cases, broken.
Crime and deficit: two sides of the same coin
The policy failures in Peru’s criminal and fiscal sectors illustrate how damaging poor decisions can be — not only in abstract terms but in lives lost and futures mortgaged.
A recent New York Times article highlighted how government missteps have fuelled a dramatic increase in organised crime, leading to greater violence, insecurity, and emigration. Despite the severity of the crisis, the response has been worryingly superficial and politically expedient. Congress, for instance, lowered the age of criminal responsibility from 18 to 16 — a move widely criticised by legal experts for being ineffective and potentially counterproductive (as well as ethically reproachable).
Other measures have been equally flawed. States of emergency have been declared in high-crime areas, but these have failed to restore order. Meanwhile, rather than empowering law enforcement, the government has undermined prosecutors and the judiciary. Congress has passed laws that make prosecuting criminal networks more difficult by narrowing the legal definition of organised crime, excluding crimes like extortion, illegal logging, and migrant trafficking.
Environmental crime has also been facilitated by policy. Congress has repeatedly extended deadlines for informal miners to formalise, allowing illegal gold mining to flourish. Amendments to the Forestry Law effectively legalised past deforestation, halting investigations and granting impunity to criminal actors in mining and logging zones.
Security analysts and prosecutors alike have been sounding the alarm. But to little effect. There are growing concerns that politicians themselves have links to criminal organisations — or are using legislation to shield their interests. In Peru, political parties have long been vehicles for personal or illicit agendas. The result: criminality is on the rise, and the institutions meant to fight it are being actively weakened.
More concerning, this surge in crime happens in a field starved of research attention. Unlike economic policy, which benefits from a relatively mature ecosystem of data, analysis, and expertise, crime and security remain significantly under-researched and underfunded.
When expertise exists, but is ignored.
In contrast, Peru’s economic policy has long been regarded as a success story. For nearly three decades, the country has enjoyed a reputation for fiscal prudence and institutional strength. The Central Bank and, until recently, the Ministry of Finance have been models of technical competence.
This success was built on strong, evidence-informed policymaking. Yet, even in this context – where evidence is abundant and expertise is readily available – Peru is experiencing a wave of damaging, ill-advised economic decisions.
A recent IMF report outlines the consequences. In 2024 alone, a slew of fiscal policies introduced by Congress and the Executive were estimated to cost 5.7% of GDP – of which 0.8% represents permanent losses. These included:
- Extensions of reduced VAT and corporate tax rates;
- Creation of Special Economic Zones with tax holidays lasting up to 25 years;
- General tax amnesties and reductions, including for undeclared income; and
- Unfunded transfers to local governments, add to public debt.
The report also details government bailouts for Petroperu, the state oil company, including:
- A $1 billion credit line;
- $750 million in capital injections and debt forgiveness; and
- $800 million in assumed debt liabilities.
All of this was done against the advice of Peru’s most respected economists, think tanks, and multilateral institutions – on all sides of the political spectrum. These policies have undermined fiscal stability, weakened investor confidence, and increased contingent liabilities – despite clear, timely, and credible warnings.
It’s not just the executive. The judiciary has contributed too. In 2022, a Constitutional Tribunal ruling awarded Congress the power to propose fiscal measures with long-term budgetary implications, circumventing oversight from the Ministry of Finance and undermining the constitutional framework for fiscal discipline.
State capture: undermining expertise by design
So why is this happening? Why are institutions that once upheld evidence-informed policymaking now presiding over its dismantling?
The answer lies in a broader, more deliberate strategy: state capture.
In Peru, the decline of technical capacity in government did not happen overnight. It began with the erosion of political integrity, accelerated during the COVID-19 pandemic under Martín Vizcarra and then the populist governments of Pedro Castillo and Dina Boluarte. Today, Peru has the world’s lowest presidential approval ratings, and a de facto alliance between the executive and Congress has cemented a regime more focused on the preservation of power than the public interest.
Technocrats in the Ministry of Finance – once pillars of Peru’s economic credibility – are being sidelined. The Fiscal Council, an independent advisory body, has repeatedly raised alarms about unsustainable spending and the collapse of institutional safeguards. But its warnings go largely unheeded.
This one-time very influential body has lost all its bite.
In private, think tanks lament the absence of capable counterparts in government. Where there was once high turnover but some baseline competence, there is now active resistance to expertise. The goal is no longer to govern well – it is to control the levers of state for private or political gain.
This is not a Peruvian anomaly. In the United States, the second Trump administration is reportedly preparing to purge the civil service of independent experts, following lessons learned during his first term. In the UK, the early Brexit years saw a similar (if more restrained) push against technocratic oversight. When expertise becomes an obstacle, the strategy is to hollow it out.
In Peru, that strategy is already well-advanced.
What next? Rethinking the role of evidence
This is not a call to abandon evidence-informed policy; it is a call to reframe how we think about it.
More research on “what works” to reduce crime will not stop politicians from actively enabling criminal networks. More fiscal modelling will not dissuade those who have spent decades trying to bend the system to serve their interests. More workshops, policy briefs, dashboards or evidence repositories won’t rebuild institutions that have been deliberately weakened.
This does not mean we stop investing in research. On the contrary: we need more research on crime, security, and corruption – precisely the areas that have been neglected. But we must abandon the idea that evidence leads the charge.
The real challenge is political. And political problems require political solutions.
It is time to stop thinking in short-term, sector-specific fixes and start thinking systemically. We need to invest in democratic governance, institutional integrity, and the long-term rebuilding of a civil service that is both technically competent and politically protected.
We must recognise that expertise, while vital, cannot stand on its own. It needs allies in politics, the media and civil society. It needs trust.
Because, in the end, this story is not just about bad policies. It is about what happens when we let bad politics overrun good institutions —and when we assume that evidence, on its own, can hold the line.