IESET.
Hypotheses·growth·peru_fujimori_shock_therapy_1990_2000

Peru's 1990-1995 Fujimori shock-therapy package (price liberalisation, fiscal stabilisation under the August 1990 "Fujishock", Brady-style external debt restructuring 1996-1997, large-scale privatisation of SOEs, central-bank independence under the 1993 constitution, and trade liberalisation) produced a structural break in inflation and real-GDP per capita relative to Peru's 1985-1990 hyperinflation trajectory and relative to a Latin American peer pool that did not adopt comparable packages on the same timeline.

The pre-registered claim is (a) inflation collapsed from >7000% (1990) to single digits by 1999, and (b) cumulative log real-GDP per capita 1990-2000 exceeds the Latin American median by at least 0.10 log-points. The mechanism is a fiscal+monetary regime change that broke the inflation-tax equilibrium and restored property-rights credibility for private investment.

PARTIALengine/runs/peru_fujimori_shock_therapy_1990_2000

PARTIAL — mean_gap=-0.7927, |gap|/pre_sd=7.8, p_perm=0.4; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. mean_gap=-0.7927, |gap|/pre_sd=7.8, p_perm=0.4; claim direction ambiguous

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 10 country or place units from 1985 to 2005, using a synth did design.

what was measured
What changed
  • Fujimori shock indicator
What we checked
  • Log income pc constant
  • Log income pc cost-of-living adjusted
  • Cpi inflation yoy
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/peru_fujimori_shock_therapy_1990_2000
1007550250198519952005PERARGBRACHLCOLECUMEX
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show log_gdp_pc_constant across 10 sampled countries over 1985–2005.
The shapes above are stylised — none of the lines are real data.
Placeholder for peru_fujimori_shock_therapy_1990_2000. Published chart will be generated from engine/runs/peru_fujimori_shock_therapy_1990_2000/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T10:15:31Z

Peru's 1990-1995 Fujimori shock-therapy package (price liberalisation, fiscal stabilisation under the August 1990 "Fujishock", Brady-style external debt restructuring 1996-1997, large-scale privatisation of SOEs, central-bank independence under the 1993 constitution, and trade liberalisation) produced a structural break in inflation and real-GDP per capita relative to Peru's 1985-1990 hyperinflation trajectory and relative to a Latin American peer pool that did not adopt comparable packages on the same timeline. The pre-registered claim is (a) inflation collapsed from >7000% (1990) to single digits by 1999, and (b) cumulative log real-GDP per capita 1990-2000 exceeds the Latin American median by at least 0.10 log-points. The mechanism is a fiscal+monetary regime change that broke the inflation-tax equilibrium and restored property-rights credibility for private investment.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if any of (a) inflation does not break below 20% by 1995 and below 10% by 1999 (hyperinflation reversal channel), OR (b) cumulative log_gdp_pc_constant 1990-2000 (Peru minus synthetic peer) is < 0.10, OR (c) gross_capital_formation share of GDP does not rise at least 4 percentage points 1990-2000 relative to peer median.

formal test & threshold
test:      synth_did_plus_inflation_break_plus_investment_share
threshold: cumulative_log_gdp_pc(PER, 1990-2000) - cumulative_log_gdp_pc(synth, 1990-2000) >= 0.10 AND cpi_inflation_yoy(PER, 1999) < 10 AND delta_capital_formation_share(PER, 1990-2000) - delta_capital_formation_share(peer_median, 1990-2000) >= 4

Method

Template
synth_did
Clustering
country
Sample
10 countries · 1985 – 2005
Evidence type
causal

Primary: synth_did with PER treated from 1990, Latin American peers as donor pool. Secondary: event-study on log GDP-pc relative to 1989 baseline. Tertiary: cointegration between credibility proxy (inflation level) and investment share to test whether the regime change had a credible-commitment signature.

Data

VariableSourceTransform
log_gdp_pc_constant
outcome
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
log_gdp_pc_ppp
outcome
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log
cpi_inflation_yoy
outcome
world_bank_wdi:FP.CPI.TOTL.ZGtier 2
level
gross_capital_formation_share_gdp
outcome
world_bank_wdi:NE.GDI.TOTL.ZStier 2
level
fujimori_shock_indicator
treatment
constructed:binary = 1 for PER from 1990 onwardtier 5
binary
terms_of_trade
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
level
copper_price
control
fred:PCOPPUSDMtier 1
log_level
us_policy_rate
control
fred:FEDFUNDStier 1
level
wgi_government_effectiveness
control
wgi:GOV_WGI_GE.ESTtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — peru_fujimori_shock_therapy_1990_2000

Verdict: PARTIAL — mean_gap=-0.7927, |gap|/pre_sd=7.8, p_perm=0.4; claim direction ambiguous

Pre-registration

  • Claim: Peru's 1990-1995 Fujimori shock-therapy package (price liberalisation, fiscal stabilisation under the August 1990 "Fujishock", Brady-style external debt restructuring 1996-1997, large-scale privatisation of SOEs, central-bank independence under the 1993 constitution, and trade liberalisation) produced a structural break in inflation and real-GDP per capita relative to Peru's 1985-1990 hyperinflation trajectory and relative to a Latin American peer pool that did not adopt comparable packages on the same timeline. The pre-registered claim is (a) inflation collapsed from >7000% (1990) to single digits by 1999, and (b) cumulative log real-GDP per capita 1990-2000 exceeds the Latin American median by at least 0.10 log-points. The mechanism is a fiscal+monetary regime change that broke the inflation-tax equilibrium and restored property-rights credibility for private investment.
  • Falsification rule: Not supported if any of (a) inflation does not break below 20% by 1995 and below 10% by 1999 (hyperinflation reversal channel), OR (b) cumulative log_gdp_pc_constant 1990-2000 (Peru minus synthetic peer) is < 0.10, OR (c) gross_capital_formation share of GDP does not rise at least 4 percentage points 1990-2000 relative to peer median.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: PER
  • event_year: 1990
  • n_donors: 9
  • donor_weights (top): {'ARG': 0.6298, 'VEN': 0.3702, 'BRA': 0.0, 'CHL': 0.0, 'COL': 0.0}
  • pre_rmse: 0.6828277998896773
  • pre_period_sd: 0.10175383637722524
  • mean_post_gap: -0.7927207350885753
  • end_period_gap: -0.6740690895366956
  • post_period_years: [1990, 2005]
  • placebo_p_value: 0.4
  • n_placebos: 9
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_pc_constant (outcome, n=14131)
  • world_bank_wdi:NY.GDP.PCAP.PP.KD → log_gdp_pc_ppp (outcome, n=8360)
  • world_bank_wdi:FP.CPI.TOTL.ZG → cpi_inflation_yoy (outcome, n=9066)
  • world_bank_wgi:GOV_WGI_GE.EST → wgi_government_effectiveness (controls, n=5194)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:31+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Data already on disk via WDI/WGI/FRED. Excludes the political-rights cost of the 1992 autogolpe; spec is narrowly economic. Channel- decomposition extension could test whether the property-rights channel (privatisation revenue 1991-2000) explains the investment- share rise.

Authored framework. Read the transparency note.