The executive and legislative branches of the Peruvian government appear to be heading for a showdown. Longtime CG friend and awesome economist Cesar Martinelli breaks it down for us in this guest post:
PRESIDENT VS CONGRESS IN PERU
Forget about the soccer war of the 1960s. Peru’s current government may collapse apparently because of disputes about the organization of the Pan American games in 2019. President Pedro Pablo Kuczynski of Peru—or PPK as he is known in Peru—was sworn in merely four months ago, receiving high marks from both domestic public opinion and the international press. A typical profile of PPK in the media like this one written by my colleague at George Mason University, Tyler Cowen, would extoll PPK’s impressive experience as a policy-maker and as a private banker, his connections with international organizations, and his academic pedigree. One of the best-received initial decisions of PPK was to include in his first cabinet the Minister of Education of the previous administration, Jaime Saavedra. With impeccable credentials of his own as a policymaker and academic, including a PhD in economics at Columbia University, Jaime Saavedra has pushed successfully for a revamping of education in Peru, around the recognition of the importance of evaluation and incentives—two themes that are central to the economic view of policy making. Saavedra’s popularity has been cemented by his ability as administrator and his obvious enthusiasm and knowledge of the field, even if there remains in Peru like elsewhere widely different views about the proper role of the state in the education sector, some at odds with Saavedra’s mildly interventionist stance regarding guaranteeing the quality of college education.
These coming weeks, PPK’s government is bound to appear again in the news, and the apparent reason is Minister of Education Saavedra. Yesterday, Saavedra was required to appear in Peru’s Congress to answer a list of questions posed by the majority in Congress, conformed by the followers of Keiko Fujimori, still smarting from the lost of the presidential runoff against PPK, and minor allies. The list of questions, unfortunately, has nothing to do with discussing the direction of the education reform, and reads more like a laundry list of assorted complaints, mainly about the organization of the Pan American games. The debate yesterday in Congress has not been an edifying spectacle, with the spokesperson for the majority roundly declaring that Peru’s recent improvements in the PISA evaluations were the result of some sort of conspiracy promoted by the Peruvian government. We live in a post-truth world, I guess. Absent any real policy disagreement, the only reason the majority in Congress may be moving toward the dismissal of Saavedra is precisely because he is successful and, as such, an asset to the government. A successful administration by PPK would delay or endanger Fujimoristas’ anxiously awaited return to the control of the executive, where most political rents can be generated.
This is what follows next. Fujimoristas have announced that will move toward censoring Saavedra in the coming days. According to the Peruvian constitution, Saavedra will have three days to resign. The executive can reply by promoting a question of confidence regarding the whole cabinet. If the Congress insists, then the whole cabinet must resign, and the President will be forced to form a new cabinet. This may be less daunting than it sounds since the President can in principle reshuffle the cabinet and propose it to Congress as a new cabinet, for instance promoting Saavedra to Prime Minister. And here starts a chicken game. If the Congress rejects the new cabinet or in any other way fails to approve a question of confidence, the President has the ability to dissolve the Congress and call new elections. Therein lies a wonderful irony. The current constitution dates from 1993, and was approved in a referendum promoted by the President Alberto Fujimori, father of Keiko, after illegally seizing power following disputes with Congress. One of the purposes of the constitution of 1993 was precisely to make it easier for the President to legally dismiss Congress.
One can imagine two alternative scenarios. In one scenario, the PPK government caves in, trying to appease Fujimoristas. We have seen that movie before; PPK himself wrote in 1977 a great book describing the economics and politics of Peru in the 1960s, when a reformist and generally well-meaning president was trapped in a tug of conflict with an opposition-controlled Congress. Things did not go very well, and representative democracy gave room to a military takeover. Much has changed in the Peruvian economy and society since then; sadly, rent-seeking and irresponsible behavior by political hacks has not. In the other scenario, PPK promotes a question of confidence and lets Congress inch towards a legal dissolution. This requires something new from PPK, beyond all the highs and lows of his extensive vita—true political leadership.