As an expert on the issue of property rights I was hired by your office to help in the planning of your government’s program to improve the welfare of your country’s poor. I am glad to inform you that I have been able to come up with the necessary actions that must be taken by your government to achieve such goals. I am well aware of your government’s reputation for having one of the highest proliferations of corruption in the world.
It is not my intention to speak personally against your regime, but being aware of such problems is the key for you to be able to implement the suggestions that your office have had me hired for. I have taken consideration of your country’s developing democratic political system, and as such need not worry about any limitations it might present. I had been informed before by your Excellency that you have read the book by de Soto entitled “The Mystery of Capital”, and is in fact the inspiration of your government’s commitment to reform.
May I refer you to pages 169 and 170 of the book, as I’m confident you’re already aware that it already has the basic outline that would guide your government towards such endeavor. I will emphasize and elaborate in particular three actions that your government must take careful heed, as it would be crucial at this present stage of your program: • The first step that de Soto suggests concerns discovering the extent of extralegal assets that are left untapped by your present economic system (169).
In your country’s case, as it is just starting to realize any formal economic system, these social studies would be very necessary as it would form the core foundations where such a system would base itself upon. Your people must have an economic system that they could easily relate to and understand culturally and socially, away from the technical jargon that orthodox capitalists have utilized for social subjugation, but taking advantage of its economically rewarding mechanisms.
Remember that any reforms that you undertake are insufficient so long as your country’s population has not integrated itself yet to a formal system that would enable them to use their resources optimally (de Soto 223). It would be a fatal mistake if policy-makers forget that it is through people that any form of change, be it economic or social, may be realized (de Soto 224). Your government’s action for this step must thus forward towards a sophisticated level of statesmanship. It would be difficult indeed so long as the people mistrust your regime, so building up such a trust must be your government’s top priority.
• Once this extralegal economic system has been identified, your government should proceed with formally incorporating this system into a legally recognizable entity (de Soto 169). De Soto’s outline has been very clear regarding political and legal strategies to achieve advocacy of a formal social property system, but I would like to emphasize one strategy which is on removing administrative and legal bottlenecks. I would like to emphasize this because if this is taken lightly it would be a serious source of corruption.
You have to mind all costs particularly bureaucratic and other transaction costs. For this the government must set-up an efficient body that will be in charge of regulating the legal implementation of documents and other titular deeds. This, as de Soto outlines, requires modifying of present institutions and bureaucratic practices (169). Specifically, red tape must be cut, costs of legal operation must be brought below that of the extralegal sector, and paperwork must be facilitated with vigilance (de Soto 162).
Transparency of all transactions must be a strong policy. • Operations and commercial strategy are undertaken after all legal systems and governing bodies have been concretized (de Soto 169). Here the most important action is on information dissemination. You government has to let people know the value of utilizing the incorporated social property system to make use of formal means of finance and security such as credit and insurance to maximize their potential as capital generators, and ultimately to achieve social and economic prosperity.
It would be another fatal mistake to assume the poor as self-pitying beggars as their poverty had in fact brought about their culture of entrepreneurship (Banarjee and Duflo 20). It is particularly this culture that we want to harness through legal means as it would uphold not only the poor’s welfare, which is what a government’s efforts should be all about, but also the cultural and financial development of the country as a whole. In summary, the actions that your government must undertake should be rooted on the basics of identification, institutionalization, and information.
Again, the state of your country might seem a hindrance to well intentioned efforts to bring welfare to your country’s poor. This, your Excellency, is your country’s opportunity to finally be seen by the world as it ought to be seen—with admiration and respect.
Banarjee, A. V. and Duflo, E. “The Economic Lives of the Poor”. October 2006: 20. PDF file. 10 May 2008 < http://econ-www. mit. edu/files/530>. De Soto, Hernando. The Mystery of Capital: Why Capital Triumphs in the West and Fails Everywhere Else. Great Britain: Black Swan, 2001.