Austin Bay links to an essay in the Arizona Republic by Robert Robb that notes securing property rights is the key component to fighting poverty in Africa.
Robb discusses a "widely panned" Bush initiative, the Millennium Challenge Corporation, and its small grant to Madagascar.
In fact, the grant to Madagascar, made this April, was the first. And it was small potatoes, just around $110 million.
But about a third of the money is for a land titling project, and therein lies the hope.
Imagine there was no functional system in the U.S. for titling property. You'd be "renting" indefinitely. A third of the grant to Madagascar is for a land titling project, and as Robb writes, "therein lines the hope."
That the poor in Madagascar wanted, first and foremost, legally protected property rights illuminates the insight of Peruvian economist Hernando de Soto, most clearly explicated in his book, The Mystery of Capital
. De Soto has inventoried the assets the poor in developing countries already control, and they are considerable. But, because the poor do not usually have legally protected property rights to what they possess, they are what he calls dead capital - they cannot be leveraged for economic improvement.
I read The Mystery of Capital
I have decided, therefore, to focus on the United States because, more than 150 years ago, it too was a Third World country. The governments and judiciary of the young states, not yet so legally united, were trying to cope with the law and disorder of migrants, squatters, gold diggers, armed gangs, illegal entrepreneurs, and the rest of the colorful characters who made the settling of the American West so wild and, if only in hindsight, so romantic. To a Third Worlder like me, this picture of the gringo past is astonishingly familiar. Although my colleagues and I have trouble relating to 11,000 on the Dow Jones, we feel quite at home among the squatters in Thomas Jefferson's Virginia or the log cabin settlements of Daniel Boone's Kentucky.
What we take for granted didn't magically appear and wasn't always here. Also, the mental picture we in the U.S. have of poverty outside our borders may not be totally accurate. For instance, De Soto documents that the poor in undeveloped countries have assets, savings of immense value, but they do not have access to the legal tools allowing them to turn these assets into wealth-generating capital.
