Who becomes mayor of Lima: Rafael López Aliaga or Carlos Bruce?

Lima, the capital of Peru, elects a mayor on October 4. The favorite is Rafael López Aliaga, a conservative businessman who ran the city from 2023 until last October, when he quit to run for president. He lost that race in April, finishing third, 21,209 votes short of the runoff. Peruvian law prohibits a mayor from serving two consecutive terms, which effectively ends his political career as a mayor.

Interestingly, this rule doesn’t apply because of the unique voting system in Peru. Instead of selecting an individual, voters choose a party’s list of candidates. The electoral authority then selects the mayor from the winning party’s list.

On August 4, one day before the deadline to pull out, the candidate for mayor on López Aliaga's list resigned. Luis Rubio gave no reason, and Renovación Popular, the conservative party López Aliaga leads, never replaced him. The mayor slot on its list is blank.

López Aliaga is on that same list, one place below, as first councilman. If the list comes first, somebody must be named mayor from it, and he is the only name left. So he would run Lima again without ever having been a candidate for mayor.

Polymarket puts his chances at 59%. Betting against him, which is what we are planning to do, costs 41 cents per contract and pays about 146% on October 4.

It’s important to note that López Aliaga not only needs to secure a victory but also must have the courts permit him to remain on the ballot. On August 26, a jury in Piura removed a former mayor named Richard Baca Palacios from the ballot for doing precisely this: being the first councilman on a list whose mayoral candidate had resigned. The jury concluded that this combination violates the constitution, regardless of any intended purpose.

However, three days earlier, Lima’s jury had ruled differently. They dismissed the complaint, stating that it was filed in the incorrect form and too late. The appeal was accepted on August 28, and the national court has yet to issue a ruling.

The polls don’t provide a definitive answer either. Five surveys conducted in August showed him with a lead ranging from 1.3 points to 22.1 points. In Lima’s last mayoral election, the outcome was determined by a margin of 52,902 votes out of 5.3 million cast, which is less than one voter in every hundred. Not the best result.

All of this indecisiveness is exactly why Polymarket traders price him slightly higher than a coin flip at 59%. Nevertheless, facts are facts, and from our point of view, they are against him.