Hernando de Soto saw in Lima's shantytowns not poverty but frozen wealth, homes held by custom that title could turn into collateral and growth. The idea reshaped development policy, then studies showed what a paper title can and cannot do. The episode lands on a reframe: security of tenure is not the same as paper title.
Who's who
- Hernando de Soto+2 more episodesPeruvian economist who said the poor hold vast untitled assets, dead capital
- Erica FieldEconomist whose Peru study found limited credit effects from titling
- Sebastian GalianiCo-author of an Argentina squatter titling study
- Ernesto SchargrodskyCo-author of an Argentina squatter titling study
- Edesio FernandesLand-tenure scholar who wrote a critical appraisal for the Lincoln Institute
Where it happens
- Lima, Peru+2 more episodesHome of de Soto's think tank and Peru's titling program
- Argentina+2 more episodesSquatter titling study showed housing gains but no credit gain
Timeline
- 1989De Soto publishes The Other Path
- 2000The Mystery of Capital puts the world's dead capital at roughly $9.3 trillion
- 2000sPeru's COFOPRI issues millions of titles and donors scale titling worldwide
- 2007Field's Peru study finds titling shifted labor but had limited credit effects
- 2010Galiani and Schargrodsky's Argentina study finds housing gains but essentially no credit gain
Still debated
Critics question whether the $9.3 trillion figure was ever defensible and whether titling causes dispossession or merely coincides with it. Whether the weak credit channel is permanent or immature, and how to judge de Soto's legacy, remain contested.
