This study is based on four years' field work in peasant communities in the most traditional region of Peru, which presents one of the most extreme cases of inequality and rural poverty in Latin America. Presents hypotheses about rural poverty in Peru and Latin America, and constructs a framework of analysis. After giving results of research in the southern Sierra region, it attempts to place the peasant economy in a dynamic context, within the Peruvian experience, with economic growth since 1950 and economic crisis since 1975 respectively. Finally reaches conclusions on the hypotheses on rural underdevelopment, the dynamics of the peasant economy under capitalist development in Peru, and the economic policies that the case studies suggest. -after Author