An Evaluation of Hernando de Soto’s Agenda

Lecture by Edesio Fernandes on Mar. 25, 2010 at the Lincoln Institute of Land Policy. The Peruvian economist Hernando de Soto’s books — The Other Path and The Mystery of Capital — and his consultancy work through the Institute of Liberty and Democracy have been extremely influential in determining the shape of policymaking regarding the treatment of informal settlements in urban areas. As a result, since the 1990s, large-scale land legalization programs have already been implemented in several countries such as Peru and Albania, based on the promise that land titling would entail access to formal credit, reinvigoration of the urban economy and eradication of urban poverty. Given the widespread — albeit often uncritical — embracing of de Soto’s ideas, and considering that there is now sufficient evidence to assess the relevance and impacts of both intended and unanticipated outcomes of the public policies inspired by his ideas, it is imperative to promote a comprehensive evaluation of de Soto’s agenda. Such a critical evaluation has become even more necessary in the current context of financial crisis, widespread housing repossessions and credit crunch.