This paper presents an overview of published literature on poverty and related concepts in Peru. Its purpose is to contribute to a universal and interdisciplinary understanding of poverty, while at the same time giving due weight to discipline- specific and local understandings. Following an introduction exploring these issues, the next three sections review the differing understandings of poverty offered by economics, anthropology and sociology. The scope of empirical economic analysis has broadened in its analysis of the multiple dimensions of poverty, but remains weak in explaining reasons for the persistence of poverty. The anthropological perspective offers a rich account of local understandings of poverty and has an important role to play in strengthening the voice of poor people themselves in research and policy processes. Sociological perspectives have highlighted the tension between a deterministic explanation of the persistence of poverty and research into how poverty can be influenced by individual and collective action. The last section proposes that these three perspectives can be incorporated into a single framework centred on the concepts of inclusion and exclusion. Peru is conceived of as a sigma society characterised by a profound initial inequality in social assets. The self-interested actions of the main domestic actors prevent block significant reforms, and the capacity of external development agencies to break the impasse can be counterproductive due to the sensitivity of the cultural and political issues involved. In contrast to the ‘tragic optimism’ of Sender, this theory of social exclusion can be summed up as ‘constructive pessimism’