PERU: ONE COUNTRY, TWO STATES
PERU: ONE COUNTRY, TWO STATES
The Two Countries That Fit Inside Peru
Two countries coexist within Peru, and they rarely look each other in the eye. They are not the Coast and the Highlands, nor Lima and the regions—although those fractures exist. Rather, they are two profoundly different ways of being in the world.
In Peru, two countries live side by side without recognizing one another. One places its trust in the State and in legality; the other relies on direct appropriation and the immediate resolution of conflicts. Two rationalities that intersect every day without acknowledging each other as parts of the same national project.
For one of these countries—the minority—law is the framework for action. Here, the State exists: there are labor contracts, licenses, invoices, judges who arbitrate disputes, offices that register property, institutions that mediate. Slightly more than 30% of the population lives under this umbrella, yet from within the formal urban world, it often seems as if this were the only “real” Peru.
The other country is broader and more diverse. It is the Peru of informality, though that word is too small to contain it. It is the Peru that functions without state intermediation, where survival and accumulation occur through the direct occupation of resources: gold, timber, land, coca, fishing grounds, transport routes, urban space. Here, rules are dictated not by law but by necessity, force, or local agreements. And yet, this world is far more than precariousness: it is also a terrain where social stratification has reproduced—and expanded.
For in this informal Peru, fortunes have also been built: territorial power, political loyalties, and structures of authority that rival the State. The economically powerful actors of the informal world—transport unions, major commercial intermediaries, networks of aggregators, leaders in illegal mining and/or coca cultivation, regional operators—hold decisive weight in the social and political life of the country’s interior. Many have managed to influence or even control regional governments. They are not marginal; they are alternative elites, born of an economic system that does not pass through notaries or courts.
And it is within this scenario that we must understand a crucial political event: Pedro Castillo’s victory in 2021. His rise to the presidency was neither an accident nor an electoral aberration; it was the political expression of the emergence of a new social class seeking a place in power. A class born of informal Peru, with its own identity, with a memory of exclusion, and with ambitions that no longer fit within the narrow framework offered by the formal country.
The Country of Rules: When the State Exists
Formal Peru lives under the conviction—imperfectly demonstrated but upheld as an ideal—that institutions can organize social life.
Its inhabitants negotiate through forms, contracts, regulations, licenses. They value the stability produced by bureaucracy, even when they criticize it. They imagine a relatively predictable future: wages, pensions, registered property, legal certainty.
In this country, citizenship is exercised through institutional channels. If there is a conflict, one seeks a judge. If there is a dispute over a resource, one consults the legal framework. If protection is needed, one turns to the State. This is not a country free from tension, but here violence is seen as a failure of the system—not as a legitimate mechanism for resolving problems.
The Country of Appropriation: When the State Does Not Reach
Beyond the institutional perimeter lies a territory where the law is a distant noise. Rules exist, but they are different: community agreements, local hierarchies, informal leaderships, tacit codes, de facto powers.
Here, life is sustained through direct occupation. The economy operates outside state oversight. Timber is extracted in prohibited zones, fishing occurs where bans forbid it, gold is mined without permits, land is occupied where formal property is unattainable, coca is grown and processed.
But this world is not only inhabited by the poor. It is also the stage where new elites emerge. Informality has not prevented—but rather facilitated—the concentration of economic power. The absence of regulation allows certain activities to generate enormous income for a few. Mining camps, illegal logging networks, large-scale informal transport, agricultural aggregators, commercial intermediaries… Informal Peru has produced its own “rich,” its own strongmen, its own political operators.
Their regional power does not rest on parties or institutions but on economic influence, territorial control, loyalty networks, and the ability to mediate—or impose—solutions where the State is peripheral or impotent.
Two Rationalities That Collide
If we look closely, the fracture between the two Perus is not only economic: it is conceptual. They represent two incompatible ideas of order.
In formal Peru, the State is the arbiter: it regulates, authorizes, sanctions. Conflicts are to be resolved in court. Violence is illegitimate.
In informal Peru, the State is weak, sporadic, or irrelevant. Conflicts are resolved directly, sometimes violently. Legitimacy arises not from law but from effectiveness: from those who can enforce agreements on the ground.
Stratification within the informal world follows this logic: those who accumulate resources become authorities. And authority becomes political capital. In many regions, the major operators of the informal economy wield more real power than any regional governor. It is not surprising that they finance campaigns, organize protests, define alliances, and exert influence.
The Emergence of a New Social Class
Castillo was the first national eruption of a long-invisible social actor: the emerging class of informal and rural Peru, which no longer sees itself represented by the elites of the formal country.
This is the context for the political phenomenon that surprised many: Pedro Castillo’s victory. It was not merely a rejection of Lima’s establishment. It was, above all, the national emergence of a long-marginalized social actor: the rising informal and rural class of Peru.
Castillo channeled the accumulated energy of multiple sectors:
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precarious rural teachers,
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small farmers,
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informal traders,
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transporters,
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artisanal miners,
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populations living under local, not state, norms,
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and also part of the new regional elite which, though informal, holds real economic and political power.
His victory was the unmistakable sign that informal Peru is no longer just an alternative economic sphere: it is a growing field of power, with its own project, its emerging political identity, and a clear awareness of its numbers and strength.
The struggle for the State is no longer between political parties, but between models of social order. Seeking purely administrative or police solutions is absurd.
The Central Question: Who Governs Peru?
The struggle between formal and informal Peru is no longer only economic or cultural: it is a battle for the State.
A fight to define:
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what is legal,
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who decides over territories,
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who distributes resources,
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who represents the country,
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and what national project should prevail.
And it is an open, unresolved struggle that runs through every political crisis, every weak government, every protest, every regional election, and every attempted reform.
Conclusion: A Country in Dispute
Peru is not divided; it is disputed. For the first time in centuries, this dispute is not within the elites but between two models of social order.
The two countries within Peru can no longer coexist without confronting each other. The formal country seeks to reaffirm its institutional authority; the informal country demands recognition and power. The fracture is not chaos: it is the expression of a nation where two competing projects face off without either being able to fully prevail.
It is worth noting that this problem has been thoroughly studied by politicians, political scientists, sociologists, and related fields, all of whom offer partial responses that do not seem to yield effective solutions.
Those of us who have passed through political life see that old formulas no longer apply, and no one proposes new ones capable of generating optimism.
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