Over half of its inhabitants live in the rural sector, the remainder reside in the city itself. The municipality's economy is based on agriculture and livestock production, commerce, mining and tourism.
Many people live in extreme poverty and there is a lack of basic services and infrastructure.
The Council of Cajamara is responsible for the governance of the entire province. In 1993 it realised that achieving effective and sustainable development depended on a process of democratisation and decentralisation of decision making. Each has its own elected mayor and an elected government body. Each district formulates its own planning policy, with input from the new local authorities. By creating a new level of government, the Cajamara Council created a framework for matching the scale of issues to an appropriate level of government.