Peru’s multi-level governance framework defines clear but complex regulatory powers across national, regional, and municipal levels, creating co-ordination challenges and capacity gaps in sub-national administrations. While regional and local governments possess autonomy to issue regulations, they often lack technical expertise and mechanisms to ensure coherence with national policies. The PCM is developing a strategy to promote the adoption of regulatory quality tools – such as ex ante and ex post regulatory analysis – through pilot programmes and capacity-building activities. On progress by Peru in selected recommendations, Peru has launched pilots in multiple regions and municipalities, established a phased approach through the 2025 Bylaw, and advanced efforts to standardise procedures and strengthen sub-national regulatory quality.
Regulatory Policy in Peru 2026
Abstract
This chapter reviews the interface and co-ordination mechanisms between the national, sub-national and supra-national levels of government in Peru. It reviews the organisation of regulatory attributions at the sub-national level and points to challenges and opportunities for regulatory policy in Peru’s sub-national governments. The chapter also evaluates the processes in place for transposing directives from CAN into national law and addresses the mechanisms in place to prevent gold-plating. Finally, the chapter assesses Peru’s capacity to consider relevant foreign and international regulatory frameworks when regulating.
Peru is a unitary presidential state, and it has three sub-national layers of government: the Regional Government, the Provincial Municipal Government, and the District Municipal Government.1 Within Peru´s unitary nature, sub-national governments have significant powers to define and implement policies, including issuing regulations, within the legal powers conceded by the Constitution and the applicable laws.
Peru is divided into 26 regional governments, which comprise 24 departments, the constitutional province of Callao and the province of Lima. The province of Lima is independent of any other region and serves at the country’s capital. The other 25 regions have elected regional governments and are in turn divided into provincial municipal governments and district municipal governments.
Powers of local and regional governments to adopt regulations
The national and sub-national levels of governments in Peru have exclusive and shared functions which are described in the CPP, the LOPE, the Organic Law of Regional Governments (LOGR) and the Organic Law of Municipalities (LOM). The LOGR and the LOM constitute the basic framework which defines the regulatory powers at sub-national levels of government, which can be exclusive or shared powers between other layers of government (see Figure 7.1).
The Organic Law of Regional Governments, Law 27867 (LOGR)
Published on 18 November 2002, the law establishes and regulates the regional governments’ structure, organisation, powers, and obligations, and defines regional governments as decentralised or de-concentrated according to the Constitution and the Law of Decentralization Bases. The Law provides Regional Governments with legal personality, with political, economic, and administrative autonomy, in matters falling under its legal attributions.
According to the LOGR, regional governments have two types of legal powers: exclusive and shared attributes. The regional governments have the exclusive faculties to plan the comprehensive development of their own region; implement socio-economical programmes; develop the Regional Development Plan; approve its internal organisation and budget; promote the modernisation of small and medium regional enterprises; promote investments in infrastructure, regional utilities, watersheds, economic corridors and touristic circuits; facilitate the access to international markets for their region’s products and services; manage and assign urban and vacant land; promote sustainable use of forest resources and biodiversity; develop regulation on subjects under their powers; among others.
The shared faculties of the regional governments with the national layer include education services; public health; regulating and developing economic and productive activities for agriculture, fisheries, industry, trade, tourism, energy, oil, mining, transport, communications, and environment; dissemination of culture, among others.
The Organic Law of Municipalities, Law 27972 (LOM)
Published 26 May 2003, the LOM establishes the rules on the creation, origin, nature, autonomy, organisation, purpose, types, powers, classification, and economic regime of municipalities. It also establishes the framework that defines the relationship between municipalities and other public and private organisations, as well as the mechanisms for citizen participation and the special regimes for municipalities.
This LOM defines the municipal governments as basic entities in the territorial organisation of the State. These bodies represent the neighbourhood; promote the appropriate provision of local public services and of a comprehensive, sustainable, and harmonic development of its constituency. Municipal governments have legal personality and political, economic, and administrative autonomy in matters under their legal attributions.
The LOM classifies municipalities according to i) their jurisdiction, into provincial, district and populated centres; and ii) their special regime, as the Metropolitan Municipality of Lima and the border municipalities.
The Law of Decentralization Basis and the LOM provides provincial and district municipalities with exclusive and shared powers. Province Governments exclusive competences incorporate actions focused on the promotion of regional development, including the land usage and the issuing of the technical guidelines for its organisation and the execution of investment plans. The District Governments have as exclusive competences the organisation of the physical space, the administration of local public services, the environment protection, and the promotion of local development, the social participation and the drug consumption prevention and rehabilitation. The shared competences of District and Local Governments are the use of land and physical space, the local public services, the protection of the environment, the promotion of local development, the social participation, the local services and drug abuse prevention and rehabilitation.
Source: Adapted from The LOGR and the LOM.
Figure 7.1 and Figure 7.2 contain a detailed description of the exclusive and shared legal powers of the four levels of government of Peru. These figures depict a complex picture, which calls for the establishment of strong governance arrangements that promote co-ordination across levels of governments to ensure regulatory coherence and promote regulatory quality efforts across all levels of government.
Source: Based on Organic Law of the Executive Power, the LOGR, and the LOM.
Source: Based on Organic Law of the Executive Power, the LOGR, and the LOM.
Sub-national governments in Peru face significant challenges to effectively implement the policies under their purview. One of the reasons is limited technical expertise and institutional capacity. This is one factor behind the low budget implementation capacity of local governments, which in 2021 amounted to 65% of the (end-of-year) budget (OECD, 2023[1]). The lack of technical expertise and capacity constraints also hinder the ability of sub-national governments to effectively issue and implement regulations of high quality.
Good regulatory practices at the sub-national level
To date, there is no legal obligation for sub-national governments in Peru to apply regulatory policy tools, except for some measures on administrative simplification. The General Law includes a provision which states that the PCM, through the SGP, will advise regional and local governments so that the regulations they issue within the framework of their powers are based on evidence, and are the result of a comprehensive, timely, and transparent process of analysis, and with attention to the impacts generated on citizens, in accordance with national policies and regulations.
Given the recent entry into force of the General Law, the PCM is in the process of preparing a strategy to promote the adoption by sub-national governments of the instruments of improvement of regulatory quality mentioned in the General Law. The PCM notes that they plan to prioritise in a first stage the instrument Regulatory Quality Analysis Ex ante, Ex post and Stock, starting with pilot programmes in specific regions, provinces, and municipalities. The intention is to learn from the experience, generate successful cases, and leverage this learning and achievements to expand this programme to other sub-national governments, and add other instruments gradually.
The evidence collected points toward a generalised lack of use of more sophisticated regulatory policy tools by sub-national governments, such as ex ante assessment and stakeholder engagement, and the efforts focus more on measures on administrative simplification and regulatory transparency. In some cases, sub-national governments undertake public consultation of draft regulations, but this is not a systematised or a recurrent practice, nor there are formal processes or methodologies in place. Like the national practice, when draft regulations are prepared, it is usually accompanied by an introductory justification in which a description of the public policy problem and the need to address it is sometimes added. However, this justification cannot be considered to resemble an ex ante analysis of the draft regulation as per OECD best practices in the matter.
Sub-national governments have the obligation by law to implement the use of a TUPA and join the SUT. These initiatives boost transparency and certainty for citizens and business when applying for licenses and permits before any level of government. They are also aimed at reducing burdens through the application of administrative simplification. The PCM actively works with sub-national government in the implementation of the TUPAs, and evidence collected from a group of officials from regional and local governments during interviews indicate that there is a high degree of satisfaction amongst them, mainly because the TUPAs improve the positive perception of citizens toward the government. Among the procedures that have been standardised are construction licenses, permits to open a business, and technical inspections of buildings, among others. The degree of implementation of TUPAs varies across sub-national governments.
Co-ordination between the national and sub-national level
Besides the close co-ordination that the PCM has with sub-national governments on the topic of TUPAs, another relevant mechanism within the Peruvian Government that can help promote regulatory coherence across levels of government is the Intergovernmental Coordination Council (CCI, Consejo de Coordinación Intergubernamental). The main function of the CCI is to:
Strengthen the governance, conduction, implementation and monitoring of the decentralisation process, as a transversal and permanent policy of the State and contribute to territorial development within the framework of the decentralisation process, facilitating and guaranteeing the alignment of policies-objectives, orientations, priorities and resources in the territories; in the perspective of building, managing and monitoring territorial development agendas, which include territorial policy implementation plans and annual and multi-year investment programmes.2
The CCI is headed by the President of the Council of Ministers and has as members the governors of the regional governments and representatives of the provincial municipal mayors. Other members include the ministers of State of Education, Agrarian Development and Irrigation, Health, Transport and Communications, Economy and Finance; the president and vice president of the National Assembly of Regional Governments; and the president of the Association of Municipalities of Peru, amongst others.
One of the operational entities of the CCI is the Executive Committee. The of the CCI meets several times a year and offers a space in which sub-national governments and ministers of the national government present to each other petitions related to problems, obstacles, or initiatives to design and implement public policies. One of the ways to address these petitions is to modify the regulatory framework or issue new rules.
The CCI represents an opportunity to achieve regulatory coherence in Peru, but it is not its main purpose. The PCM informs that in Peru there is not a specific body or mechanism to seek regulatory coherence across levels of government.
Peru engages in practices of IRC on multiple levels. They comprise the promotion of the implementation of regulatory policy tools and practices as part of trade agreements, participation in international fora or through other mechanism to exchange regulatory practices multilaterally or bilaterally, and consideration of international instruments when developing or reviewing domestic law and regulations.
General IRC policies and provisions
There is no overarching policy statement in Peru that promotes a whole-of-government IRC approach. The current legal framework on regulatory quality does not contain specific provisions to consider IRC elements for the process of drafting, implementing, and reviewing regulations, beyond some specific elements in the RIA process mentioned below.
Peru promotes the adoption of regulatory policy tools and practices as part of trade agreements. The Pacific Alliance Free Trade Agreement, which comprise Colombia, Chile, Mexico, and Peru, contains provisions for Member countries to adopt and apply regulatory policy tools in their respective national regulatory frameworks. It includes a chapter on regulatory improvement, with the purpose of adopting and improving regulatory standards and eliminating those regulations that may unjustifiably restrict trade between countries.
Additionally, this trade agreement creates a Committee on Regulatory Improvement, in which representatives of the Member countries participate. Its objective is to ensure the implementation of the chapter on regulatory improvement and identify future priorities on regulatory policy, for instance, sectoral initiatives or reforms, and other IRC co-operation activities.
In other trade agreements signed by Peru, specific provisions have been incorporated that specify mechanisms for the exchange of regulatory practices, defined as regulatory coherence. This refers to the use of good regulatory practices in the process of planning, designing, issuing, implementing, and reviewing regulatory measures to facilitate achievement of domestic and international policy objectives. The objective of regulatory coherence is to enhance regulatory co-operation across governments efforts to further the objectives of promotion of international trade and investment, economic growth, and employment.
These agreements comprise:
The Peru - Australia Free Trade Agreement, Chapter 24 – Regulatory Coherence.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership Agreement, free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam, Chapter 25 – Regulatory Coherence.
Several line ministries and all the economic regulators participate regularly in international fora alongside international peers, in which country representatives present and share good regulatory practices. They also regularly engage in co-operation agreements with peers or development agencies from other countries to exchange lessons and practices on regulatory policy bilaterally.
Consideration of international instruments when developing or reviewing domestic law
Formal requirements to consider international instruments when developing or reviewing domestic law are a common way to ensure that international experience and expertise are considered in domestic rule making.
In Peru, the Manual for the application of Ex Ante Regulatory Impact Analysis contains provisions to consider international standards, evidence, experience, and examples in the process of preparing draft regulation. The following provisions are included:
In the identification of alternatives to regulation, to consider for adoption international standards instead of developing a draft regulation from scratch.
In the identification of impacts, to state whether the draft regulation refers to existing international regulations or standards, common standard approaches, or international dialogue.
In the identification of impacts, to consider the international impact of the proposed regulation, which should cover impacts on flow of import and exports, investment, and trade policy, including obligation with the World trade Organization.
As mentioned in Chapter 4, Evidence-informed regulations, the practice of RIA in Peru is only starting, so there is still no evidence or example of considerations of international instruments when developing or reviewing domestic regulation in the framework of RIA.
For the case of draft technical regulations, which are exempted from the RIA process, the National Institute of Quality of PRODUCE checks whether the standards are aligned with international obligations, and MEF assesses potential impacts on foreign trade.
Co-operating in international fora
Peruvian regulatory agencies engage in a variety of international co-operation fora. For instance, in the telecommunications sector it participates in the International Telecommunication Union, Latin American Forum of Telecommunications Regulatory Authorities (REGULATEL), and the Inter-American Telecommunications Commission (CITEL). In the realm of water and sanitation, it collaborates with the Association of Water and Sanitation Regulatory Entities of the Americas (ADERASA) and RegNET (WHO). Additionally, in the energy sector, it participates in the Ibero-American Association of Energy Regulatory Entities (ARIAE) and the International Confederation of Energy Regulators, highlighting Peru's active participation in global regulatory networks.
Peru is a Member of CAN since its foundation in 1969. The CAN consists of the Andean System of Integration, whose main objective is to achieve a comprehensive, balanced, and autonomous development, through Andean integration, with a projection towards South American and Latin American integration. The other members are Bolivia, Colombia, and Ecuador.
Among the main institutions of the CAN are the Andean Presidential Council, the Andean Council of Ministers of Foreign Affairs, the General Secretariat and the CAN. These institutions work together to co-ordinate the policies and actions of Member countries and promote regional integration.
Negotiation of the national position
One of the avenues in which the CAN dispatches its duties is through the issuance of international instruments. The CAN prepares and issues its standards and regulations through a process that involves the participation of the member countries and the institutions of the organisation itself. The process of preparing and issuing standards in the CAN is carried out collaboratively among the Member countries, with the objective of promoting regulatory harmonisation and facilitating economic and social integration in the Andean region.
Transposition into national law
For the regulations issued by the CAN to be mandatory for Peru, the process involves the incorporation of said regulations into the national legal system. This process is generally done through two main mechanisms:
International Treaties and Agreements: the CAN rules are usually established in international treaties or agreements signed by Member countries. In the case of Peru, once the country has ratified an international treaty or agreement that contains provisions of the CAN, these norms are incorporated into the Peruvian legal system and acquire the status of national law.
Harmonisation through legislation: In some cases, the CAN rules can be incorporated into the Peruvian legal system through legislative processes. This implies that the Congress of the Republic of Peru approves national laws that reflect and are consistent with the provisions and principles established in the CAN regulations. There is no legal requirement to prepare a RIA for legislative initiatives.
Priority Recommendation 5
One of the recommendations on multi-level governance for regulatory coherence calls for Peru to “Develop and implement a strategy to promote the adoption by sub-national governments of the instruments to improve regulatory quality included in the General Law, including by demonstrating progress towards:
Completing and effectively implement the pilot programmes to roll out the Regulatory Quality Analysis in sub-national governments. The lessons learned could support the expansion of the use of this tool and other instruments included in the General Law.
Establishing outlets to exchange experiences amongst sub-national governments such as conferences, capacity building, and training exercises on regulatory quality.”
Peru has developed a plan to engage sub-national governments and promote the adoption of regulatory policy tools across all levels of government. The SGP is currently collaborating on pilot programmes with the regional governments of San Martín and La Libertad, along with six local governments, to gain a deeper understanding of the regional and local context. The initiative aims to assess public officials' technical capacities, analyse the types of regulations issued, and examine the regulatory development process. Additionally, it seeks to identify key challenges in regulatory processes and determine the necessary conditions for more effective regulation, prioritising the implementation of regulatory improvement tools. Upcoming steps include further engagement with additional sub-national governments, strengthening the standardisation of administrative procedures, reviewing and simplifying the existing stock of formalities, adapting regulatory management tools – such as the regulatory quality analysis of procedures and the ex ante RIA – to regional contexts, and delivering capacity-building activities.
Additionally, the national government is working with five regional governments and ten municipalities to assess their governance structures, regulatory processes, and standardisation procedures, aiming to enhance regulatory practices at the regional and local level.
Furthermore, the Bylaw outlines a phased approach to implementing regulatory management tools and practices at sub-national level. The initial stages will prioritise measures aimed at reducing administrative burdens, strengthening the standardisation of administrative procedures, reviewing and simplifying the existing stock of procedures, improving tools such as the Regulatory Quality Analysis of procedures to regional contexts, and developing technical capacities in sub-national governments.
Peru has shown progress in addressing the recommendation. Peru has developed a strategy to promote the adoption of regulatory quality instruments by sub-national governments. The SGP is implementing pilot programmes with regional governments to tailor regulatory management tools to local contexts. Additionally, the government is engaging with regional governments and municipalities to improve rulemaking and enhance regulatory practices. The Bylaw establishes a phased approach to implementing these tools, including capacity-building initiatives and measures to streamline procedures, ensuring broader adoption and effective regulatory improvements at the sub-national level.
Reference
[1] OECD (2023), OECD Economic Surveys: Peru 2023, OECD Publishing, Paris, https://doi.org/10.1787/081e0906-en.