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Property rights for the world's poor could unlock trillions in ‘dead capital’. According to one economist, the value of extralegal property globally exceeds 10 trillion dollars.

Ensuring property rights for the world's poor could unlock trillions in ‘dead capital’. According to Peruvian economist Hernando de Soto, the value of extralegal property globally exceeds 10 trillion dollars. Nobody has ever disputed that property rights matter for investment: experts point to a direct correlation between a nation’s wealth and having an adequate property rights system. This is because real estate is a form of capital and capital raises economic productivity and thus creates wealth. Mr de Soto's understanding – that title frees up credit, turning ‘dead capital’ into ‘live capital’ – has prompted governments in other countries to undertake large-scale property-titling campaigns.

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Producer: Ben Crighton
Editors: Richard Knight and Richard Vadon

(Image: Hernando de Soto, Credit: Getty Images)

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9 minutes

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Mon 2 Oct 2017 03:50GMT

Sources and related links

Hernando de Soto - The mystery of capital, New York: Basic Books, 2000

Christopher Woodruff - 'Review of de Soto's The mystery of capital', Journal of Economic Literature Vol 39, December 2001

The World Bank Group - Doing business in 2005

Robert Home and Hilary Lim - Demystifying the mystery of capital: Land tenure, London: Glasshouse Press, 2004

Tim Besley - 'Property rights and investment incentives: Theory and evidence from Ghana', Journal of Political Economy

'The Economist versus the Terrorist' - The Economist

David Kestenbaum and Jacob Goldstein - 'The secret document that transformed China', NPR Planet Money

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  • Sat 30 Sep 2017 02:50GMT
  • Sat 30 Sep 2017 19:50GMT
  • Mon 2 Oct 2017 03:50GMT

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