Peru sits on the Pacific Coast of South America. Ecuador is to the north, Columbia to the northeast, Brazil to the east, Bolivia to the southeast, and Chile to the south. About 5,000 years ago, it was home to one of the first cities in the Americas, a place called Caral Supe.

Peru's colonial history began in the 1530s and is, like many other colonial histories, roughly identical to its mining history. Shortly after Pizarro's arrival near present-day Lima in 1532, Peru became one of the most important sources of the gold and silver to support the expansion of the Spanish empire during the sixteenth century. At one time, virtually all of the metal wealth of South America passed through the ports of Lima on its way to the isthmus of Panama and across to Seville.

Sunday's elections in Peru mark the beginning of another cycle in the country's failed attempts to deal with this legacy.

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First, let's start with the basics. All eligible Peruvians are required by law to vote in the presidential election. There were over 20 candidates running for the post of president, and though there were three clear frontrunners, no candidate received more than 30% of the vote in preliminary tallies. As such, there will be a run-off between the two highest vote getters.

The leading vote getter on Sunday was retired army commander Ollanta Humala. Campaigning as the strongest populist of the three frontrunners and receiving endorsements from both Venezuela's Hugo Chavez and Chile's Evo Morales, Humala rose to political prominence after leading a failed coup attempt in 2000. According to Al Jazeera, He is "an ideological adherent of Peru's 1968-75 left-wing military dictator General Juan Velasco" and has "pledged to punish a [corrupt] ruling class" by significantly increasing the state's role in the economy. His mother has called for homosexuals to face the firing squad and for corrupt politicians to be killed.

According to early returns, the second place finisher and Humala's runoff opponent was former Peruvian president, Alan Garcia. Playing the role of Lula or Michelle Bachelet to Humala's Chavez or Morales, Garcia has walked a middle road -- espousing populist values, but not pledging the aggressive nationalization that Humala has. His tagline is "Peru should not choose between military dictatorship and the dictatorship of money." The last time Alan Garcia was president of Peru (from 1985 to 1990), he oversaw an economic plan that included nationalizing a US oil company, as well as the country's banking and insurance systems, and halting foreign debt payments. He left office in 1990, with inflation so rapid that it was doubling consumer prices on almost a daily basis (in total, Peru's CPI rose of 2.2 million percent during his tenure), and he spent the next eight years in self-imposed exile.

The final contender, and, at this point, the one left out in the cold, is the "pro-business" candidate Lordes Flores. She recently served as a congresswoman and has run on a platform of improving Peru's education and health sectors. She supports free-trade and believes that policies favoring general market liberalization and supporting foreign investment hold the key to bettering the average Peruvian's lot.

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When former World Bank official and current President Alejandro Toledo took office in 2001, he promised economic growth and job creation. His policies were a general continuation of World Bank-mandated policies begun under Alberto Fujimori in response to the economic crisis that Alan Garcia left behind after his first term as president. According to the Washington Post, Toledo's delivered on the economic growth promise, but fallen far short on the job promise: "Toledo promised ... to create 1 million jobs in his five-year term. Despite Peru's average annual economic growth of about 4 percent [including 6.7% in 2005], among the best in Latin America, Peru's economy lost 40,000 jobs."

What's a great way to drive rapid economic growth without attendant gains in employment opportunities? By focusing on our old friend, the mining industry. Modern mining operations require virtually no human input once they are up and running, but are able to generate tremendous sums of money. Again, according to the Washington Post: "mining companies paid $290 million in income taxes to the Peruvian government, 10 percent of the total income tax collected. Tax proceeds have contributed to many social programs outside the mining regions, most notably a low-income housing construction project that has ranked as the most popular program of Toledo's presidency. But the mine companies took more than 10 times what they paid in taxes out of the country as revenue."

As the Post points out, mining wealth has led to a limited amount of widespread good and the support of various socially equitable development projects. As always, though, it makes sense to try and retain as much of that wealth as possible within your borders. And so, over the last 40 years, Peru has ping-ponged between periods of nationalization in which the country retained a large sum of the productive output of its mines (from 1968 to 1975 under Humala's hero Juan Valesco, from 1985 to 1990 under Alan Garcia, and, apparently, from 2006 to 2011 at least under Humala) and privatization in which the government has let increased overall production increase its tax receipts (pre-1968, from 1975 to 1985, and from 1990 to 2006, mostly under the direction of the World Bank).

As Peru's voters point out, neither nationalization nor privatization of its mining wealth has really done the trick.

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Roughly speaking, there are two kinds of economies in the world: those driven by the extraction of natural resources and those driven by the refining of those resources into finished goods. Not only do finished goods economies generate greater wealth, they do so over a broader portion of the population because, at least right now, it takes more people to make a computer circuit than it does to extract the gold that goes into it.

A country whose economy is based on resource extraction is, almost by definition, a colony, no matter whether it's the government or private industry that is controlling that resource extraction.

According to Bloomberg financials, "Peru is the world's fourth-largest copper producer, third in zinc, fifth in gold and the world's largest fishmeal producer. The country has South America's fifth-largest natural gas reserves." Unless the country can produce a candidate that will reduce the reliance on these exports, it is doomed to continue an unproductive cycle of nationalization and privatization.

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