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The de Soto effect

Besley, Timothy and Ghatak, Maitreesh ORCID: 0000-0002-0126-0897 (2009) The de Soto effect. Economic Organisation and Public Policy Discussion Papers (EOPP 008). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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This paper explores the consequences of creating and improving property rights so that fixed assets can be used as collateral. This has become a cause célèbre of Hernando de Soto whose views are influential in debates about policy reform concerning property rights. Hence, we refer to the economic impact of such reforms as the de Soto effect. We explore the logic of the argument for credit contracts, both in isolation, and in market equilibrium. We show that the impact will vary with the degree of market competition. Where competition is weak, it is possible that borrowers will be worse off when property rights improve. We discuss the implications for optimal policy and the political economy of policy reform.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2009 the authors
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
JEL classification: P - Economic Systems > P1 - Capitalist Systems > P14 - Property Rights
K - Law and Economics > K1 - Basic Areas of Law > K11 - Property Law
Date Deposited: 07 Oct 2009 16:29
Last Modified: 16 May 2024 11:48

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