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Review of de Soto's The Mystery of Capital

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  • Christopher Woodruff

Abstract

In The Mystery of Capital, Hernando de Soto promotes his explanation of why formal capital markets function poorly in developing countries. De Soto argues that much of the population of developing countries lacks access to credit, not because they lack assets, but because ownership of their property is secured informally, which prevents the use of property as collateral. The inability to convert assets into capital keeps the developing world from benefiting from capitalism.

Suggested Citation

  • Christopher Woodruff, 2001. "Review of de Soto's The Mystery of Capital," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1215-1223, December.
    • Handle: RePEc:aea:jeclit:v:39:y:2001:i:4:p:1215-1223
    Note: DOI: 10.1257/jel.39.4.1215
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    References listed on IDEAS

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    1. Jean O. Lanjouw & Philip I. Levy, 2002. "Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador," Economic Journal, Royal Economic Society, vol. 112(482), pages 986-1019, October.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Victor Tanaka, 2010. "The ‘informal sector’ and the political economy of development," Public Choice, Springer, vol. 145(1), pages 295-317, October.
    2. Bellemare, Marc F., 2010. "The Productivity Impacts of de Jure and de Facto Land Rights," MPRA Paper 23639, University Library of Munich, Germany.
    3. Deininger, Klaus & Jin, Songqing, 2009. "Securing property rights in transition: Lessons from implementation of China's rural land contracting law," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 22-38, May.
    4. Benjamin Marx & Thomas Stoker & Tavneet Suri, 2013. "The Economics of Slums in the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 187-210, Fall.
    5. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    6. Miceli, Thomas J. & Kieyah, Joseph, 2003. "The economics of land title reform," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 246-256, June.
    7. Vogl, Tom S., 2007. "Urban land rights and child nutritional status in Peru, 2004," Economics & Human Biology, Elsevier, vol. 5(2), pages 302-321, July.
    8. Max Gallien & Vanessa van den Boogaard, 2023. "Formalization and its Discontents: Conceptual Fallacies and Ways Forward," Development and Change, International Institute of Social Studies, vol. 54(3), pages 490-513, May.
    9. Robert M. Buckley & Jerry Kalarickal, 2006. "Thirty Years of World Bank Shelter Lending : What Have We Learned?," World Bank Publications - Books, The World Bank Group, number 7061.
    10. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    11. Omer Ozgen, 2020. "Impact of Slum Redevelopment Projects on Labour Market Outcomes: Evidence from Addis Ababa," CSAE Working Paper Series 2020-23, Centre for the Study of African Economies, University of Oxford.
    12. Sebastian Galiani & Ernesto Schargrodsky, 2011. "Land Property Rights and Resource Allocation," Journal of Law and Economics, University of Chicago Press, vol. 54(S4), pages 329-345.
    13. M. Shahid Ebrahim & Seema Makhdoomi & Mustapha Sheikh, 2012. "The Political Economy and the Perennial Underdevelopment of the Muslim World," Working Papers 12011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    14. Kemper, Niels & Ha, Luu Viet & Klump, Rainer, 2015. "Property Rights and Consumption Volatility: Evidence from a Land Reform in Vietnam," World Development, Elsevier, vol. 71(C), pages 107-130.
    15. Martin Andersson & Daniel Waldenström, 2017. "Hernando de Soto: recipient of the 2017 Global Award for Entrepreneurship Research," Small Business Economics, Springer, vol. 49(4), pages 721-728, December.
    16. Alhola, Sara & Gwaindepi, Abel, 2024. "Land tenure formalisation and perceived tenure security: Two decades of the land administration project in Ghana," Land Use Policy, Elsevier, vol. 143(C).
    17. Kim, Annette M., 2007. "North versus South: The Impact of Social Norms in the Market Pricing of Private Property Rights in Vietnam," World Development, Elsevier, vol. 35(12), pages 2079-2095, December.
    18. Florencia Torche & Seymour Spilerman, 2006. "Household Wealth in Latin America," WIDER Working Paper Series RP2006-114, World Institute for Development Economic Research (UNU-WIDER).
    19. Marc F. Bellemare, 2013. "The Productivity Impacts of Formal and Informal Land Rights: Evidence from Madagascar," Land Economics, University of Wisconsin Press, vol. 89(2), pages 272-290.

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    More about this item

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights

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