The concentration of decision-making power in the persona of the president and the major swings in policy took an enormous toll on the nation's political system and state institutions. The judicial and legislative branches, already inadequately funded and understaffed, were constantly bypassed by the executive. State institutions, meanwhile, already burdened by excessive bureaucracy, were virtually inoperative because government resources had all but disappeared. Political parties had been increasingly discredited, having failed to provide credible alternatives to the malfunctioning state system with which they were associated. Both extrasystem movements, such as neighborhood organizations and grassroots groups, and antisystem movements, such as guerrilla forces, particularly the Shining Path (Sendero Luminoso--SL), had increased in size and importance. The breach between the Peruvian state and civil society had widened. The political system was fragmented and polarized to an unprecedented degree, and society, which was immersed in a virtual civil war, had become increasingly praetorian in nature.
PERU, IN 1980, was one of the first countries in South America to undergo the transition from long-term institutionalized military rule to democratic government. By 1990, however, Peru was in the midst of a social, economic, and political crisis of unprecedented proportions that threatened not only the viability of the democratic system but also civil society in general.
Despite the desperate nature of the socioeconomic situation and the extent of political polarization, Peru successfully held its third consecutive elections in April and June 1990. Agronomist Alberto K. Fujimori, a virtual unknown, defeated novelist Mario Vargas Llosa by a wide margin. The victory of Fujimori and his Cambio '90 (Change '90) front was seen as a rejection of traditional politicians and parties, as well as of Vargas Llosa's proposed orthodox economic "shock" program.
For more recent information about the government, see Facts about Peru.
On April 5, 1992, Fujimori suspended the constitution, dissolved the Congress and the judiciary, and placed several congressional leaders and members of the opposition under house arrest. The measures, which were fully supported by all three branches of the armed forces, were announced in the name of fighting drug traffic. They amounted to an autogolpe (self-coup): a military coup against the government led by the president himself. The government held elections for the Democratic Constituent Congress (Congreso Constituyente Democrático) on November 22, 1992, and municipal elections on January 29, 1993.
Although Fujimori made impressive strides during his first year in the implementation of structural economic reforms, there was substantial popular disaffection owing to the high social costs of the "Fujishock" program and to the government's failure to follow through on promises of a social emergency program to alleviate those shocks. Resource constraints inherited from the previous government severely limited the Fujimori administration's ability to act on the social welfare front. Fujimori lost the support of much of his Cambio '90 front when he turned to orthodox economics. In addition, he was forced to rely on a series of "marriages of convenience" with various political forces in Congress in order to pass legislation. He also had to rely on a sector of the army for institutional support.
More than a decade of steep economic decline had resulted in a dramatic deterioration in living standards for all sectors of society and a vast increase in the large proportion of society that was underemployed and below the poverty line. Per capita incomes were below their 1960 levels. Accompanying the economic decline in the 1980s was a rise in insurgent violence and criminal activity. There was also a marked deterioration in the human rights situation--over 20,000 people died in political violence during the decade.
The crisis had partial roots in the failure of successive governments to implement effective economic policy and to fully incorporate the marginalized (informal) sector of the population into the formal economic and political systems. Politics were dominated by personalities rather than programs and by policy swings from populist policies to neoliberal stabilization strategies.
Despite his wide popular margin, Fujimori faced substantial constraints early on. One was his lack of an organized party base or a working majority in either of the two houses of Congress. Another was that, as a result of hyperinflation, the lack of government resources, and the clear preferences of international lending agencies, such as the International Monetary Fund (IMF) and World Bank, he had little choice but to implement the orthodox shock program that he had campaigned against.
You can read more regarding this subject on the following websites:
Government of Peru - Wikipedia
Peru Country Studies index
Country Studies main page