The expansion of CCTs

The success of CCTs has inspired a broad academic literature aimed at explaining their rapid regional expansion, coverage, and design features. A dominant explanatory approach has been policy diffusion theory, which frames the regional spread of CCTs as a transnational learning process facilitated by epistemic communities and international organizations such as the World Bank and the Inter-American Development Bank (Franzoni and Voorend, Reference Franzoni and Voorend2011; Sugiyama, Reference Sugiyama2011; Borges, Reference Borges2022). These actors promoted CCTs as technically sound and politically feasible tools for poverty alleviation, helping to consolidate their legitimacy across diverse political contexts.

While diffusion accounts have been instrumental in explaining the timing and form of adoption, more recent scholarship has shifted attention to domestic political and institutional dynamics. A growing body of literature emphasizes how variations in CCT design, such as conditionalities, targeting strategies, and benefit levels, reflect national political coalitions and institutional balances (Brooks, Reference Brooks2015; De La O, Reference De La2015). For example, governments facing strong legislative opposition tend to institutionalize stricter rules to reduce discretion and insulate programs from charges of clientelism. Along the same line, Garay (Reference Garay2016) finds that stronger societal involvement in program design tends to produce more expansive and inclusive welfare models, while technocratic or conservative dominance leads to narrower coverage.

In parallel, scholars have problematized the ideational foundations of CCTs, highlighting how notions of deservingness, efficiency, and austerity are embedded in their design (Somers and Block, Reference Somers and Block2005; Castiglioni, Reference Castiglioni2018; Campos, Reference Campos Ugaz2024). These narratives often reproduce racialized and gendered assumptions, shaping both the targeting logic and societal perceptions of beneficiaries. For instance, Nagels (Reference Nagels2024) shows how countries like Brazil and Mexico integrated gender equality goals into CCT design, while in Peru, Juntos perpetuated social representations of women beneficiaries that reinforced maternalism, assigning women sole responsibility for managing the household.

Another line of research explores the resilience and institutionalization of CCTs over time. Drawing on historical institutionalism, scholars argue that once embedded in state structures, CCTs generate policy legacies that shape subsequent trajectories and reform efforts (Fenwick and Rennó, Reference Fenwick and Rennó2022). These legacies can act as either enablers or constraints, depending on bureaucratic capacity, political coalitions, and institutional architecture.

As CCTs adopted different characteristics across countries, scholars have sought to explain these variations by emphasizing domestic factors (Brooks, Reference Brooks2015; De La O, Reference De La2015; Borges, Reference Borges2022). These studies argue that the design of CCTs reflects institutional balances between the executive and legislative branches: governments facing opposition in Congress tend to adopt stricter rules that limit discretion and reduce the potential for clientelism (Brooks, Reference Brooks2015; De La O, Reference De La2015).

However, this literature shows that most studies implicitly assume a linear and homogeneous trajectory of scaling up, often overlooking how geographic, political, and institutional factors can produce persistent spatial exclusions (Niedzwiecki, Reference Niedzwiecki2018). In this respect, Peru represents a paradox. While many Latin American countries gradually expanded CCT coverage to urban areas, Juntos retained a predominantly rural focus for over a decade, despite increasing urban poverty and several institutional opportunities for reform.

Theoretical and methodological approach

This article adopts a historical institutionalist perspective to examine how past decisions and inherited institutional structures have shaped the possibilities for change in the design of Peru’s Juntos program. Unlike rational choice institutionalism, which emphasizes the strategic interests of individual actors, historical institutionalism highlights how institutional trajectories generate feedback mechanisms that reinforce particular logics of action over time (Pierson, Reference Pierson1993; Mahoney and Thelen, Reference Mahoney and Thelen2009). The analysis incorporates the role of bureaucratic actors to show how they operate within pre-structured institutional and normative frameworks that constrain their room for maneuver.

In the field of public policy, inherited institutional legacies can produce inertia and resistance to change (Pierson, Reference Pierson1993). These legacies often crystallize during critical junctures, moments of heightened uncertainty in which decisions are made that shape long-term institutional trajectories (Capoccia and Kelemen, Reference Capoccia and Kelemen2007, p. 342). This institutionalist lens is complemented by an ideational approach, which considers how cognitive and normative frameworks about poverty and the role of the state have influenced policy decisions. Historical institutionalism emphasizes how the timing and sequencing of events generate both formal and informal institutions that affect public policy. These institutions are also seen as carriers of ideas, shaping how individuals and organizations interpret the world and define their preferences (Fioretos et al., Reference Fioretos, Falleti, Sheingate, Fioretos, Falleti and Sheingate2016, p. 24).

The article employs process tracing as a key methodological tool to draw causal inferences through the sequential reconstruction of events and decisions (Collier, Reference Collier2011). This approach helps demonstrate how certain institutional and ideational legacies functioned as necessary conditions preventing the expansion of Juntos, even in the presence of favorable external conditions and internal reform efforts.

Between 2020 and 2021, 16 semi-structured interviews were conducted in Lima. Key decision-makers interviewed for this study included high-ranking government officials from Juntos, MIDIS, and MEF. These respondents were selected due to their central role in policy decisions typically made by a small circle of actors at the highest levels of government. In this context, technocrats are understood as senior public officials with technical expertise who occupy decision-making positions within the state apparatus, particularly in strategic ministries such as MEF and MIDIS (Dargent, Reference Dargent2015).

However, technocracy in Peru is not monolithic. It encompasses internal factions with differing priorities and degrees of autonomy, shaped by their institutional locations and ideological orientations (Bersch et al., Reference Bersch, Praça and Taylor2017). While some technocrats, often political appointees in social policy ministries, pushed for the expansion of Juntos to address emerging forms of urban poverty, their efforts were frequently constrained by entrenched institutional norms and veto structures. Fiscally conservative technocrats within the MEF acted as powerful gatekeepers, resisting reforms perceived as fiscally risky or politically sensitive. This dynamic illustrates how technocratic governance in Peru can simultaneously produce reformist initiatives and the structural barriers that ultimately limit their realization.

Additional interviews were conducted with former members of Congress and social policy scholars. These interviews helped reconstruct key moments of resistance to reform and captured competing narratives surrounding the program’s design and underlying logic. Fieldwork was complemented by an extensive review of official documents produced between 2005 and 2022, including program evaluations, ministerial resolutions, and technical guidelines, as well as public statements made by program authorities. This documentation enabled the tracking of continuities and shifts in the official discourse on urban poverty over time. Lastly, a detailed review of Congressional Debates from 2005 to 2021 was conducted to examine legislators’ views on the appropriate role of the state in addressing social issues.

The Juntos program

The Juntos CCT was created in Peru in 2005 as part of the national poverty reduction strategy, aiming to provide direct support to the poorest households. Its launch was highly controversial: at the time, then-President Alejandro Toledo had an approval rating of just 10%, and many sectors of civil society suspected that the program would be used for clientelistic purposes in the lead-up to the 2006 national elections (Jones et al., Reference Jones, Vargas and Villar2008).

These concerns were echoed within the MEF, where experts initially opposed Toledo’s proposal to create a cash transfer program modeled after those in Brazil and Mexico. MEF technocrats only agreed to support Juntos once specific safeguards were introduced. These included a strict geographic targeting strategy that limited the program to rural districts with high levels of poverty and child malnutrition. The MEF’s Executive Council also stipulated that the program should begin in areas affected by political violence.

Juntos was initially placed under the Presidency of the Council of Ministers and launched its pilot phase in Chuschi, Ayacucho, a symbolic location where the Communist Party of Peru, Shining Path, declared war against the Peruvian state and society in 1980, marking the beginning of the internal armed conflict (1980–2000). The program then expanded to the regions of Ayacucho, Huánuco, Huancavelica, and Apurímac. At its inception, Juntos provided 200 soles (approximately 50 USD) in monthly cash transfers to women in rural households, conditional on their children’s attendance at school and health services.

An initial budget of 120 million soles was allocated to Juntos. By 2006, additional resources were directed to expand coverage to more households in extreme poverty. Nonetheless, geographic targeting remained intact, allowing districts to be included in a controlled and selective manner. As one former MIDIS official stated, this ensured “there is no doubt that the beneficiaries are in extreme poverty” (personal interview, 2020).

In 2011, the MIDIS was created, and Juntos was transferred from the Presidency of the Council of Ministers to this new institution. This move aimed to shield the program from political interference and consolidate its design. From that point forward, MIDIS became responsible for determining targeting criteria. The initial targeting process for Juntos followed three stages: first, geographic selection of eligible districts; second, household selection within each district using data from the Household Targeting System (SISFOH); and third, a community-based validation stage, later eliminated, which involved local program staff verifying household eligibility. Following the creation of MIDIS, the program’s coverage increased substantially. In 2011, Juntos operated in 700 districts; by 2012, an additional 300 districts had been added.

A significant development occurred in 2014 when MIDIS acknowledged the limitations of SISFOH in identifying Indigenous populations whose livelihoods are primarily non-monetary. In response, MIDIS adopted a multidimensional poverty approach that granted automatic eligibility to all Indigenous communities in the Peruvian Amazon, recognizing both their economic characteristics and their limited access to essential services. By the end of 2014, Juntos operated in 1,156 districts, with the inclusion of 42 Indigenous communities and the region of San Martín. At that point, 29% of enrolled families lived in the central highlands, 22% in the southern highlands, 22% in the northern highlands, 19% in the Amazon, and 8% on the coast (Sánchez and Rodríguez, Reference Sánchez and Rodríguez2016).

In 2015, the departments of Lambayeque (north coast), Ucayali (Amazon), and Arequipa (southern highlands) were added. In 2016, Tacna and Madre de Dios, as well as rural districts in the province of Lima, were incorporated. By the end of that year, the program had reached 668,030 affiliated families. In sum, this section has traced the primarily rural expansion of the Juntos CCT from its creation in 2005 through to 2016, the year of its last major territorial inclusion.

Institutional legacies and policy locks

The election of Alberto Fujimori in 1990 marked the beginning of a profound transformation in Peruvian politics and the institutional structure of the state (Schady, Reference Schady2000). Scholars widely characterize this period as a critical juncture in Peru’s institutional development, during which path-shaping decisions redefined public policy trajectories, state-society relations, and the balance between technocracy and political representation (Crabtree et al., Reference Crabtree and Thomas1998; Levitsky, Reference Levitsky1999; Weyland, Reference Weyland2002). Two key legacies that emerged from this period are particularly relevant to understanding the dynamics of social policy in twenty-first-century Peru: institutional legacies and ideational legacies.

At the institutional level, the MEF became the dominant actor in state decision-making. As part of the neoliberal structural reforms of the 1990s, the MEF was granted significant technical and political autonomy, along with key functions to authorize, supervise, and, when necessary, veto public policy initiatives across all sectors (Dargent, Reference Dargent2011, p. 106). Following the return to democracy, the transitional governments of Paniagua and Toledo did not dismantle this technocratic architecture. Instead, they reinforced it, aiming to avoid the corruption and clientelism that had marked the Fujimori regime (Vergara and Encinas, Reference Vergara and Encinas2016; Jenson and Nagels, Reference Jenson and Nagels2018). This consolidation was accompanied by strict fiscal rules and institutional mechanisms that expanded the MEF’s oversight over public spending.

Simultaneously, the ideational legacy entrenched a technocratic vision of state management grounded in efficiency, austerity, and return on social investment. This economic rationality gained legitimacy not only among business elites but also within the state bureaucracy, where technocrats became the recognized authority on what was considered “technically feasible.” As a result, political parties and social actors were increasingly excluded from decision-making spaces, and only policies that demonstrated measurable outcomes and fiscal sustainability were seen as legitimate (Gálvez and Grompone, Reference Gálvez and Grompone2017, p. 107). In this context, economic growth, through a “trickle-down” logic, was viewed as the primary redistributive mechanism, narrowing the scope for broad or universal social policies.

Together, these institutional and ideational legacies gave rise to two structural policy locks that have shaped social policymaking in Peru. The first is a rural bias lock, which restricted the territorial expansion of the Juntos program to urban areas by combining regulatory constraints with persistent ideas about who deserves state support. The second is a horizontal and fiscal control lock, rooted in the institutional strength of the MEF and oversight bodies like the Comptroller General’s Office. These entities not only act as institutional veto players but have also fostered a culture of fear and risk aversion among public officials, limiting innovation and adaptability (Gálvez, Reference Gálvez2025). Together, these locks operate as negative feedback mechanisms, reinforcing the status quo and limiting institutional responsiveness to new social challenges, such as the growing urbanization of poverty (Béland et al., Reference Béland, Campbell and Weaver2022).

Figure 1. Institutional legacies and policy locks constraining Juntos’ territorial expansion.

The first lock: The rural bias

During the 1990s, Peru’s social programs were widely instrumentalized by the Fujimori regime for clientelistic purposes, especially in electoral contexts (Weyland, Reference Weyland1996; Schady, Reference Schady2000). Among the most significant were FONCODES (created in 1991), which financed community-led infrastructure projects, and PRONAA (created in 1992), which aimed at providing food assistance in rural and urban-marginal areas. Although there was no comprehensive anti-poverty strategy in place, in 1993 the government published the Lineamientos de Política Social, which promoted two central principles: targeted spending and community participation. This led to the creation of the District Poverty Map to guide geographic targeting and the establishment of Núcleos Ejecutores, local committees tasked with executing community-prioritized projects (Mora and Perea, Reference Mora and Perea2008).

While evaluations showed that FONCODES disproportionately favored rural areas in a clientelistic manner (Schady, Reference Schady2000), the focus on targeted assistance and the design of delivery mechanisms ended up channeling resources to urban areas as well, particularly to those with political networks or local organization, reproducing paternalistic and assistentialist dynamics rather than fostering meaningful citizen participation (Tanaka and Trivelli, Reference Tanaka and Trivelli2002).

After the democratic transition, this urban clientelism, combined with efforts to preserve the technocratic logic of policy implementation, prompted a strategic shift: the state’s anti-poverty interventions became increasingly focused on rural areas. This transformation was institutionalized with the creation of the Household Targeting System (SISFOH) in 2004, which was tasked with defining eligibility rules for social programs (Beltrán and Cárdenas, Reference Beltrán and Cárdenas2012). Initially housed under the Presidency of the Council of Ministers, SISFOH was transferred to the MEF in 2005, where it gained greater political autonomy and adopted a stricter approach to minimizing inclusion errors. Within this new institutional framework, extreme poverty was operationalized through variables strongly associated with rurality (such as agricultural employment, low educational attainment, and poor housing conditions), thus reinforcing a structural bias in the allocation of social programs (Álcazar et al., Reference Álcazar, Alvarado and Legonía2018).

At the ideational level, this bias was reinforced by a technocratic culture aligned with orthodox economic thinking. Efficiency, fiscal restraint, and the belief in economic growth as the primary redistributive tool (the so-called “trickle-down” effect) became dominant frames for understanding poverty and social intervention. Within this paradigm, urban poverty was viewed as transient and largely attributable to informality, making it less “deserving” of targeted public assistance. Urban areas were also seen as more susceptible to political manipulation, reinforcing the preference for interventions in rural settings, perceived as more politically neutral and technically manageable.

Taken together, the rural lock became institutionalized through both regulatory and ideational channels. Normatively, it was embedded in eligibility criteria that systematically favored rural territories. Ideationally, it rested on dominant narratives about merit, efficiency, and the risks of politicization. These two dimensions worked in tandem to block future reforms, even when senior bureaucrats attempted to expand the program’s coverage to urban areas despite mounting evidence of growing urban poverty. In this way, the rural lock illustrates how institutional and ideational legacies of the 1990s continue to shape and constrain the contours of Peru’s social policy landscape.

The second lock: Excessive horizontal oversight and fiscal rigidity

The second mechanism that limited the adaptability of the Juntos program was the horizontal control lock, rooted in a tightly regulated institutional environment and an ideational culture centered on accountability and fiscal restraint. This lock emerged through the consolidation of two key forces: the growing oversight role of the Comptroller General’s Office and the dominance of a fiscally conservative technocracy based in the MEF. Unlike the rural lock, which determines where and to whom social policy is directed, this second lock constrains how social programs are designed, modified, and implemented. It limits bureaucratic discretion even in the presence of strong evidence or mounting reform pressures.

In the 1990s, Peru experienced what some have described as institutionalized corruption, a system where corruption was not merely a set of individual deviations but rather a structural pattern that permeated the entire state apparatus. According to the Iniciativa Nacional Anticorrupción (2001), this involved the private appropriation of public resources, institutional capture, and the dismantling of independent oversight mechanisms. This institutional crisis triggered a comprehensive reform of the national control system, which prioritized transparency and minimized discretion in the use of public funds (Calderón, Reference Calderón2006).

In the decades that followed, anti-corruption efforts became central to Peru’s public administration discourse and practice. This led to a robust legal and institutional framework that emphasized transparency, accountability, and efficient resource management. The Comptroller General’s Office assumed an increasingly central role, conducting detailed audits of social programs and reinforcing strict compliance norms.

While these oversight mechanisms helped reduce abuse and enhance legality, they also had unintended effects. Public officials, in their efforts to avoid administrative sanctions, began to prioritize formal compliance over policy outcomes. A management culture emerged that favored low-risk decisions and discouraged innovation. Excessive monitoring fostered what some bureaucrats described as a “culture of fear,” where any deviation from established procedures, even in pursuit of better social outcomes, was seen as a potential liability (Gálvez, Reference Gálvez2025).

Parallel to this, the MEF consolidated its position as the epicenter of Peru’s fiscal rigidity. Its veto power over social policy decisions with fiscal implications, including program expansion or changes to eligibility criteria, extended far beyond budgetary allocation. The MEF imposed a normative logic centered on efficiency, targeting, and fiscal sustainability (Gálvez and Grompone, Reference Gálvez and Grompone2017).

At the ideational level, this lock reflects a deeply entrenched narrative that prioritizes fiscal control, minimizes leakage, and treats any deviation from narrow targeting as a potential vector for clientelism. Even when there is recognition of shifting social realities, such as the growing urbanization of poverty, policy innovation is often blocked by the fear of administrative error or public scrutiny (Álcazar et al., Reference Álcazar, Alvarado and Legonía2018, p. 43). This has resulted in a bureaucratic culture that values compliance over creativity, reinforcing a “risk prevention” logic.

In sum, the combination of enhanced oversight and fiscal orthodoxy constitutes a powerful institutional lock. The Comptroller General’s Office discourages discretion through ex-post surveillance (or the threat of it), while the MEF limits policy space ex-ante by acting as a veto player grounded in fiscal norms. Together, they have reinforced the status quo, making it extremely difficult to adapt Juntos to the changing geography of poverty, even in moments of political or institutional opportunity.

Windows of opportunity

Throughout the trajectory of the Juntos program, several key moments emerged as potential windows of opportunity to expand coverage into urban areas. These junctures combined favorable external conditions, such as the sustained rise in urban poverty, with reform initiatives led by actors within the redistributive technocracy, creating the possibility for a shift in the public policy agenda. However, in the Peruvian case, deeply embedded institutional and ideational legacies acted as internal constraints, ultimately preventing these opportunities from translating into substantive programmatic reform.

Creation of Juntos: Institutionalizing the rural bias

The creation of the Juntos program in 2005, during the government of Alejandro Toledo, marked a critical juncture that institutionalized a rural bias in Peru’s social policy. Its design reproduced an existing logic: territorial targeting focused on rural districts with high levels of poverty and child malnutrition.

Rather than breaking with past approaches, Juntos reaffirmed the technocratic frameworks developed after and in response to Fujimori’s regime’s social policy, which emphasized rural Andean poverty as the main focus of state intervention. This continuity was largely driven by the influence of technocrats within the MEF, who, concerned about avoiding the clientelism associated with earlier programs like FONCODES, conditioned their support on strict rural targeting criteria (Vergara and Encinas, Reference Vergara and Encinas2016). The MEF played a decisive role in defining the program’s territorial reach, establishing that Juntos would operate only in rural districts classified as extremely poor.

Meanwhile, other countries in the region were moving toward broader territorial coverage. In Mexico, Progresa expanded to urban areas in 2002, becoming Oportunidades, following official diagnoses showing that urban poverty had surpassed rural poverty. That year alone, urban families accounted for 36% of all beneficiaries (Hevia, Reference Hevia2009). Similarly, Colombia’s Familias en Acción expanded in 2007 to include displaced households, many of whom were living in urban areas.

These cases offered not only concrete models of policy adaptation but also comparative pressures that highlighted the growing exceptionalism of Peru’s rural focus. In this context, rurality ceased to function merely as a technical targeting criterion and became what this article conceptualizes as a technocratic-ideational lock, combining formal institutional rules (such as geographic targeting thresholds and ministerial resolutions) with deeply embedded ideas about which populations are deserving of public support.

This framework introduced a distinction between two forms of poverty. Urban poverty was seen as temporary, associated with informality, and thus considered less “deserving” of targeted public assistance. Rural poverty, by contrast, was viewed as structural and more legitimately entitled to state support. This narrative was further reinforced by Juntos’ technical targeting guidelines, which initially included 70 rural districts affected by political violence, anchoring the program even more firmly in rural areas.

In sum, the launch of Juntos represented a window of opportunity to design a more universal and territorially inclusive social protection system. However, political risk mitigation and the preservation of technocratic neutrality ultimately prevailed, resulting in the institutionalization of a systematic exclusion of the urban poor from the country’s flagship CCT program.

The creation of MIDIS and the consolidation of the rural bias

The creation of the MIDIS in 2011 marked a key window of opportunity to reform and innovate social protection programs. At the time, President Ollanta Humala enjoyed high approval ratings, having been elected on a center-left platform, and the country was experiencing sustained economic growth. Together, these conditions provided a favorable context for designing more inclusive and expansive social programs.

However, this opportunity was quickly constrained by the inherited design logic that prioritized rural areas in the implementation of the Juntos program. This rural bias, or rural lock-in, was justified both on technical and normative grounds. Technocrats within the MIDIS argued that the rural poverty rate significantly exceeded urban poverty by 38 percentage points in 2012 (INEI, 2012), and thus, the need for intervention remained concentrated in rural settings.

In addition, policymakers shared the belief that urban households had access to more tools, both formal and informal, for economic survival. As noted in interviews, the ministry’s creation coincided with the height of the “trickle-down” discourse, which promoted the idea that economic growth would eventually benefit cities. This narrative overlooked persistent pockets of extreme poverty in urban areas, where growth had failed to reach vulnerable populations.

This ideational framing was institutionalized in key policy documents, particularly the National Strategy for Development and Social Inclusion “Incluir para Crecer.”Footnote ² The strategy defined the program’s target population, known as the Population in the Process of Development and Social Inclusion (PEPI), as households that met at least three of the following four conditions: being located in a rural area, having a female head of household with incomplete primary education or less, speaking an Indigenous language, and being in the lowest income quintile. These criteria reinforced a targeting system that systematically excluded the urban poor.

In sum, while the creation of MIDIS opened a window for reimagining Peru’s social protection system in a more inclusive direction, the persistence of a deeply embedded rural bias, both ideational and institutional, ultimately prevailed. As a result, this moment of potential reform reinforced rather than challenged the program’s territorial limitations, contributing to the ongoing exclusion of poor urban households from the CCT system.

The “Prospera” strategy to address urban poverty

The launch of the “Prospera” strategy in 2016 under the administration of President Pedro Pablo Kuczynski marked a rare moment in which urban poverty gained visibility within Peru’s social policy agenda. At the beginning of his term, Cayetana Aljovín, appointed as Minister of the MIDIS, brought with her a team associated with the private sector and emphasized the need to shift away from “assistentialist” approaches toward more efficient social interventions (El Comercio, 2016).

Yet, during Aljovín’s tenure, urban poverty became a central issue in public discourse. As early as 2016, she repeatedly emphasized in media interviews the importance of addressing urban poverty (RPP Noticias, 2016), and the administration set an ambitious goal of reducing urban poverty to 9% by 2021 (Agencia Peruana de Noticias, 2016). According to INEI, in 2016, there were 3.4 million poor individuals in urban areas, surpassing the 3.2 million living in rural zones.

In response, the MIDIS designed the Prospera strategy, officially launched in February 2017. Its objective was to improve the living conditions of 3.5 million urban poor through three pillars: access to labor markets, access to quality public services, and access to social protection networks. The first phase included initiatives aimed at facilitating the labor participation of women, such as the expansion of the Cuna Más program, which provides early childhood care in urban and peri-urban areas.

However, the strategy deliberately excluded an extension of the Juntos CCT program to urban areas. One major reason was the perception among policymakers that urban poverty was too heterogeneous and spatially diffuse, making it harder to target and more expensive to address. This reflected the operation of the horizontal control and fiscal rigidity, shaped by the MEF and reinforced by strict oversight institutions. Rooted in fiscal austerity, tight budgetary controls, and an institutional culture of risk aversion, this conservative policy environment systematically discouraged the expansion of social rights into urban areas.

Instead of creating a new cash transfer scheme, Prospera was designed as a pilot to coordinate existing programs in selected urban districts, such as San Juan de Lurigancho and Villa María del Triunfo in Lima, as well as districts in the departments of Arequipa and La Libertad.

However, in late 2016, the MIDIS entered a period of high instability. Just one year after taking office, and only a month after Prospera was approved by the Interministerial Commission on Social Affairs, Aljovín was appointed Minister of Energy and Mines. She was replaced by Fiorella Molinelli, and as a result, the pilot project stalled for over 15 months after its official launch.

In sum, Prospera represented a rare moment of political alignment to address urban poverty through policy innovation. Nevertheless, the horizontal control and fiscal rigidity lock, shaped by MEF’s budgetary power and the overriding culture of compliance and risk aversion, ultimately constrained the program’s ability to expand coverage or adapt its redistributive reach. While political will and problem recognition were present, institutional inertia and fiscal orthodoxy blocked the translation of intent into durable reform.

Horizontal expansion of Juntos during the El Niño phenomenon

In addition to the rural lock, Juntos bureaucrats perceived an excessive level of scrutiny from oversight bodies and public spending watchdogs. According to interviews, the strict oversight exercised by the Comptroller General’s Office regarding beneficiary eligibility created significant resistance to program expansion.

Throughout Juntos’ first decade, the Comptroller General’s Office issued repeated reports accusing program officials of allowing large numbers of ineligible households to receive conditional transfers despite not being in extreme poverty (Former MIDIS official, personal interview, 2020). These findings triggered strong political reactions from opposition parties in Congress, who framed such inclusion errors as acts of corruption:

An illustrative episode occurred in the context of the 2017 El Niño emergency, which created a short-term window of opportunity for expansion. The government issued exceptional, unconditional cash transfers of 200 soles to affected households, including some in urban districts. However, these were temporary measures limited to populations residing in officially declared emergency zones.

Although this emergency response enabled transfers in urban areas for the first time, it did not amount to a structural reform. Transfers were not directed at the structurally poor, but rather at disaster-affected populations. Moreover, technical and logistical limitations, especially at the municipal level, prevented the accurate identification and registration of eligible recipients (INDECI, 2018). This lack of formal validation heightened the internal risk perceptions among Juntos officials:

For many bureaucrats, the inclusion of non-registered beneficiaries, particularly in urban settings, was not simply a technical error but a potential legal liability:

In sum, the El Niño episode illustrates how institutional and ideational constraints reinforce one another. On the one hand, existing regulations impose rigid rules for targeting and spending, embedded within a legal framework geared toward control and risk containment. On the other hand, this architecture has fostered a deeply embedded institutional culture of risk aversion.

Even in moments of crisis that created real windows of opportunity for territorial expansion, such as the El Niño emergency, extreme caution prevailed. This logic of fear prioritized compliance and institutional self-preservation over policy adaptation. Ultimately, it reaffirmed the horizontal control lock: a restrictive regime in which social policy is subordinated to rigid legal oversight, often at the expense of its redistributive potential.

Juntos and the tuberculosis intervention in urban areas

On July 27, 2017, Fiorella Molinelli was appointed Minister of the MIDIS. With prior experience in state institutions and a candidacy under the ruling party Peruanos por el Kambio in the 2016 congressional elections, her administration resumed the attention to urban poverty initiated during the previous term. The Vice Ministry of Policy and Social Evaluation was tasked with designing pilot initiatives attached to the Juntos program to address urban poverty (former MIDIS official, personal interview, 2021).

Given the difficulty of applying a model designed for rural contexts, the technical team opted to conduct targeted studies on specific urban vulnerabilities. Critical issues such as adolescent pregnancy and, in particular, the incidence of tuberculosis (TB) were identified, with TB severely affecting impoverished areas of Lima. In 2017 alone, the city recorded the highest number of reported sexual violence cases against children and adolescents (792 cases), along with alarming rates of adolescent pregnancy and TB infection.

Based on these findings, a pilot was designed to deliver CCTs to 734 individuals with TB in Lima, with the potential to scale up to 37,000 beneficiaries nationwide. The pilot would be executed using Juntos’ existing operational systems over a two-year period. The proposal received internal support and was even announced publicly in April 2018 by the program director:

Despite having feasibility studies and technical backing, Minister Molinelli ultimately did not approve its implementation, and the project was abandoned under subsequent administrations. Interviews with MIDIS officials point to both regulatory hurdles and strong ideational resistance:

This testimony illustrates the dominant narrative within MIDIS’ technocratic apparatus. Under this logic, urban poverty is seen as less structural and therefore less deserving of direct interventions such as cash transfers. Urban residents are viewed as having more tools to move forward, while the State’s role is reduced to supporting job creation, not redistribution.

At the same time, the institutional design of Juntos had been calibrated for rural contexts. Expanding to urban areas would not only require political will but also complex regulatory adjustments. The legal and operational architecture of the program, particularly its geographic targeting, was not designed for urban implementation. This institutional rigidity made pilot interventions operationally fragile and difficult to sustain.

In this sense, the original rural targeting of the program reinforced institutional learning that anchored extreme poverty to rural areas and consolidated the idea that the State should only intervene in those cases. This technocratic rationality, based on fiscal efficiency, spending control, and assumptions about the behavior of the poor, became institutionalized as common sense within the public administration, narrowing the scope for more inclusive redistributive alternatives.

Taken together, experiences such as the design of Juntos, the creation of MIDIS, the Próspera Strategy (2016–2017), the El Niño emergency response, and the urban TB pilot (2017–2018) demonstrate that there were concrete windows of opportunity to reform Juntos’ geographic scope and adapt it to new urban realities.

Although some expansion proposals were led by ministers with strong technocratic profiles (such as the Prospera Strategy and the Juntos pilot for Tuberculosis), the initiatives ultimately failed to gain traction. This paradox highlights a core argument of this study: the technocratic legacies of the 1990s created both ideational and institutional constraints that limited reform, even when proposed by actors who seemingly shared the same governing ethos.

These legacies crystallized into two mutually reinforcing locks: a rural bias lock, which tied extreme poverty exclusively to rural areas and constrained geographic expansion; and a horizontal control and fiscal rigidity lock, which prioritized compliance, minimized discretion, and fostered a risk-averse bureaucracy. Together, these constraints entrenched a path-dependent model of social policy that proved highly resistant to reform, even in the face of growing urban poverty and repeated high-level reform efforts.