Beyond the macroeconomic paradox: Competing efficiencies and Peru’s path from health success to pandemic catastrophe

Cotlear D. · SSM - Health Systems (2026) · DOI: 10.1016/j.ssmhs.2026.100288

Resumen

During the first two decades of the twenty-first century, Peru combined sustained macroeconomic success with one of the fastest declines in child mortality in Latin America—only to record the region’s highest excess mortality during the COVID-19 pandemic. This trajectory from health gains to pandemic catastrophe has been framed as a macroeconomic paradox: how could a country with strong growth, low debt, and improving health indicators prove so vulnerable? This paper argues that the answer lies beyond macroeconomic performance, in the unresolved competition between two distinct conceptions of efficiency—competing efficiencies—that governed health financing over two decades. One conception, embedded in the statutory framework of universal health insurance, emphasized population-wide risk pooling, entitlement-based coverage, and the expansion of services to address demographic and epidemiological change. The other, institutionalized through performance-based budgeting, prioritized cost control and technical efficiency of specific interventions, largely maintaining a focus on maternal and child health. Drawing on a qualitative institutional and policy analysis of secondary data and documentary sources, including comparative evidence from Chile and Colombia and descriptive fiscal and health indicators, the paper shows how the absence of an explicit political resolution between these competing efficiencies helps account for the policy drift documented here, which constrained the evolution of primary care and weakened hospital capacity even as fiscal space for health investment was available. The COVID-19 pandemic is examined as a stress test that revealed the cumulative consequences of this governance tension. The findings highlight the importance of aligning efficiency frameworks with fiscal policy and demographic realities in middle-income countries pursuing universal health coverage. Copyright