Overview
Why is legal empowerment of the poor a prerequisite for the proper functioning of markets? In this presentation, Hernando de Soto emphasizes that markets cannot exist without good democratic governance, since it is the political system in each country that establishes the legal institutional framework. This framework should be inclusive, so that everyone can participate in the market on equal footing. However, the reality in many developing countries – particularly in Latin America – is that most people have no title to the property they occupy and work informally without the protection of the law. The goal of institutional reforms is to change that, as difficult as it may seem given the appeal of populism and the entrenchment of existing institutions
“I do still believe that we have a democratic deficit. We have gotten somewhat better over time but it's still not enough to give democracy a good name.”
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