The poor are not the problem

Many poor countries have the appearance of market economies but are actually mercantilist economies, with small elites enriching themselves through government favours, contracts, and privileges while excluding and marginalizing both local and foreign competitors by government means . . .

Appears in Fall 2005 Issue: The best of Comment
August 1st, 2005

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else by Hernando de Soto (New York: Basic Books, 2000, 276 pp, $41.50)

How do you know in Bali where one man's property ends and another's begins?

Except for the affluent elite, people in Bali do not have access to a formal system of property rights.

Someone may have occupied a home or done business out of a little shop or farmed a patch of land for decades, and no one else may wish to lay claim to the land or buildings, but legally that person would not own it, since they would have no documented title of ownership.

So, according to Peruvian economist and anti-poverty activist Hernando de Soto, in Bali you only know when you are stepping onto someone else's property when a different dog starts barking.

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