Cover: Crisis in the Peruvian Revolution.

Crisis in the Peruvian Revolution.

by Robert Klitgaard

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Three factors are combining to produce the first crisis in Peru's "noncapitalist, noncommunist revolution." President Velasco's illness has created fears of a political succession struggle among the military and widespread public uncertainty about the direction of present leadership. Peru's economy has faltered due to a number of problems largely beyond the government's control. "Social property," Peru's name for a form of worker-managed enterprise destined to become the dominant sector of a mixed economy also including private and public property, has a high political priority, but it is also a major revolutionary step with potentially large short-run costs. Continuation of the revolution depends on many crucial, near-term decisions about social property; but given today's political and economic situations, any choice could be volatile. 5 pp.

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