The Peruvian model

Abstract

Peru is an early benchmark of neoliberalism (Odisio, Romero y Ugarteche, 2025; Ugarteche 2025a, 2025b). While Raúl Prebisch and the Economic Commission for Latin America and the Caribbean (ECLAC/CEPAL) (1949) proposed industrialization as a way to address the deterioration of the terms of trade, in Peru, Pedro Beltrán Espantoso and Rómulo Antonio Ferrero promoted the opposing liberal agenda. Between 1950 and 1965, Peru became the example of how this path functioned better than Import Substitution Industrialization (ISI) regarding inflation, exchange rates, and GDP growth. Only between 1970 and 1990 was a different turn recorded, before subsequently returning to the liberal path. Chile attempted to follow this path in the 1950s, but without success. In 1987, Hernando de Soto concluded that a minimal state without political parties was essential, within the Austrian traditions of von Mises, Hayek, Eucken, and ordoliberalism. This paper reviews the historical and political components of this economic phenomenon since its first real application in the 1950s in Peru. It then addresses the underlying ideas and neoliberal ideology, reviews the Peruvian and regional history on the subject, and concludes with some considerations regarding the impact on social policies.