possibility, real or imagined, of debt re-negotiation or default could limit the extent to which voters in Peru consider these future costs. This paper only considers FONCODES transfers.

Table 2 provides descriptive statistics of socio-economic characteristics, voting patterns and per capita expenditures made by FONCODES. It shows that provinces in Peru vary a great deal on all of these counts. The variation in per capita FONCODES expenditures is particularly noteworthy: some provinces received no transfers whatsoever, while others received more than six times the mean per capita transfer.

Table 2: Socio-economic characteristics, voting patterns, and FONCODES expenditures on

||co|mmunity-|based pro|jects||||
|---|---|---|---|---|---|---|---|
||Mean|St Dev.|Median|25th %|75th %|**Min**|Max|
|Population|97,165|118,630|<br>58,168|28,814|116,486|185|692,265|
|FONCODES index*|15.31|6.03|16.14|11.49|19.57|1.00|28.24|
|Proportion rural|44.92|30.49|49.88|14.40|72.29|0|91.00|
|Pro-Fujimori vote: 1990**|65.37|13.70|65.07|56.32|75.01|17.76|93.35|
|Pro-Fujimori vote: 1993**|50.60|12.05|51.52|45.78|58.77|12.17|80.05|
|Per capita expenditures***|31.18|28.97|24.25|13.59|41.71|0|191.83|

TWs is the "poverty" index used by FONCODES in 1996. It is a weighted mean of 8 variables--the rate of chronic malnutrition amongst schoolchildren, the rate of illiteracy, the proportion of children not in school, and the proportion of households who live in overcrowded housing, who have inadequate roofing, no access to running water, no sewerage, and no electricity, respectively. Higher values of the index are an indication of higher poverty. All values are normalized so that the province with the lowest amount of poverty has a value of the FONCODES index equal to 1.

** Summary statistics for the pro-Fujimori vote in 1990 and 1993 are population-weighted. They do not correspond exactly to the actual fractions voting for Fujimori because of differences between total population and the population of eligible voters. Moreover, electoral data for the second round of the 1990 presidential election is only available for 205 out of 224 provinces which existed at the time.

*** This refers to per capita expenditures made by FONCODES on community-based projects between December 1991 and March 1995, in 1992 soles.

Figures 2 and 3 show scatter diagrams and non-parametric (kernel) regressions of the logarithm of per capita FONCODES expenditures as a function of the proportions voting for Fujimori in the 1990 presidential election and the 1993 referendum, respectively."<sup>5</sup> Figure 2 shows a positive correlation between the 1990 Fujimori vote and expenditures in the December 1991--October 1993 period, while Figure 3 shows a negative correlation between the 1993 Fujimori vote and expenditures in the November 15 Non-parametric regression analysis can be thought of as a moving average. The expectation of Y (in this case, the log of per capita FONCODES expenditures) is estimated conditional on X (the pro-govermnent vote in the 1990 election or the 1993 referendum) without imposing any assumptions about functional form. It is therefore a much more flexible and accurate way to represent bivariate associations than, say, Ordinary Least Squares (OLS). For an excellent introduction to non-parametric regression **s** ee Deaton (pp. 190-203), as well as Silverman (1986) and Hardle (1991). To avoid dropping provinces which received zero transfers, I add 1 to per capita expenditures in every province before taking logs (see Maddala 1983, p. 181, for a similar ad hoc correction).

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