Sources of Fujimori's Popularity: Neo-liberal Reform or Ending Terrorism

Much has been discussed regarding the support for Peruvian President Alberto Fujimori during the implementation of his 'fujishock' program. In the voting behavior literature, the role of Fujimori's success in ending the terrorism is mentioned, but is a mere footnote to the story. However, we present historical analysis, public opinion data and economic statistics to argue that had he not controlled terrorism, Fujimori would not have been able to implement his stabilization programs and maintain popular support. We first show that the problem of terrorism was paramount and Fujimori's success in ending it was greatly rewarded in terms of personal support. Second, we show that the subsequent gains in the economic situation can be traced to improvements in security, because the political and social risks inherent in terrorism significantly curtail domestic and foreign investment.