I just finished reading an article for class tomorrow by Warschauer (2005), and there was a section that really resonated with me about Hernando de Soto, an internationally renowned economist and President of the Institute for Liberty and Democracy in Peru. He published a study about the importance of land records for international development. He notes that a lack of transparency in regards to land ownership has devastating results in developing countries.
"In every country we researched, we found that some 80% of land parcels were not protected by up-to-date records or held by legally accountable owners. Nobody can identify who owns what, addresses cannot be easily verified, people cannot be made to pay their debts, resources cannot be conveniently be turned into money, ownership cannot be divided into shares, descriptions of assets are not standardized and cannot be easily compared, and the rules that govern property vary from neighborhood to neighborhood or even from street to street".
According to his research, the total value of real estate held but not "legally" owned by the poor of the developing and former communist nations is equal to some 9.3 trillion dollars. Wow.
He continues by noting that this sum is often many times greater than the total savings and time deposits in banks, the value of companies registered in local stock exchanges, ALL foreign direct investment, and ALL privatized public enterprises PUT TOGETHER.
If a small portion of that capital were unleashed, it could have ENORMOUS benefits for developing countries.
-L
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