The constitution of 1979 mandated the establishment of regional governments in Peru. Regionalization was part of the original APRA program of the 1920s. In 1988 the APRA government finally imitated the process with a law providing for the creation, administration, and modification of regions, which would replace the former departments. Between 1987 and 1990, the APRA government also issued corresponding laws creating eleven of the twelve regions called for under law, with the Lima/Callao region remaining under negotiation (see fig. 13). In 1991 debates in Congress continued on the Lima/Callao and San Martín regions, with the latter voting to separate from La Libertad Department. The highly politicized debates centered on whether senators should be elected by region or by national district, and on the method that regional assemblies are elected. Five of the regions held their first elections for regional assemblies on November 12, 1989, in conjunction with the municipal elections, and the other six regions held elections in conjunction with the April presidential elections.

By law each regional assembly consisted of provincial mayors (30 percent), directly elected representatives (40 percent), and delegates from institutions representative of the social, economic, and cultural activities of the region (30 percent). In 1990 APRA and the United Left (Izquierda Unida--IU) dominated the regions, with APRA controlling six, IU three, and the Democratic Front (Frente Democrático--Fredemo) only one.

The process of regionalization was more one of administrative shuffling than of substance. However, the regional governments faced the same resource constraints that substantially limited the ability of municipal governments to implement independent activities. The central government is in theory supposed to transfer funds and assets, such as state sector enterprises, to the regions, but in practice this has only happened piecemeal. This tendency had been exacerbated by the severity of the economic crisis and the poor fiscal situation inherited by the Fujimori government. The dynamic was made more conflictive as the regional governments were controlled by parties in opposition to the central government. The cutting of resources allocated to regional governments in the 1991 budget was a good indication of the constraints that regional governments would face for the foreseeable future. Moreover, the executive had taken back some powers that were originally given to the regions, such as control over the national tourist hotels. The regional governments, meanwhile, had heightened the debate with actions such as the refusal to pay the executive what was owed for electricity tariffs.

Data as of September 1992