Lock-in from within: Challenges to expanding cash transfer programs in Peru

Abstract While most Conditional Cash Transfer programs in Latin America expanded from rural to national coverage, Peru’s Juntos program maintained a strict rural focus for 15 years, systematically excluding poor urban households. This article examines the Peruvian paradox: why, despite regional trends and internal efforts to broaden coverage, Juntos remained territorially constrained. Using process tracing and semi-structured interviews with policymakers, senior bureaucrats, former congress members, and policy experts, the study identifies two institutional legacies rooted in the neoliberal reforms of the Fujimori era. First, the institutional consolidation of the Ministry of Economy and Finance (MEF) as a powerful veto player with control over public spending; and second, the diffusion of an ideational framework centered on fiscal austerity, efficiency, and aversion to clientelism. These legacies gave rise to two policy locks, a persistent rural bias and a regime of horizontal and fiscal control, that have limited the program’s adaptability to shifting poverty dynamics and urban demands.