The economic performance of Peru in recent times has been impressive. There is now a transition underway as commodity prices fall, and the key challenge for Peru is how to improve productivity and maintain this growth trajectory. Peru is a territorially diverse country and addressing these challenges will require policies that are designed for the specific needs of different cities and regions. The importance of regional policies is particularly important for the case of Peru. Within the OECD only four countries have a larger land mass. The physical geography of the country is shaped by a thin coastal region, the Andes and the Amazon forest in the interior. These different areas are not well connected and have vastly different levels of service provision and infrastructure. The report sets out how regional policies can be improved to address these challenges. This includes ensuring the preconditions (such as revenues, capabilities and coordinating mechanisms) are in place for decentralisation to work. Lifting national productivity will largely depend on well-functioning cities. The report also includes recommendations for how Peru can develop a comprehensive approach to urban policy, including enhancing linkages with rural areas