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August 18, 2008 3:54 AM   Subscribe

I have just started reading 'The Mystery of Capital' by the celebrated Peruvian economist, Hernando de Soto. Having lived in Brazil for many years and seen, on a daily basis, the irrepressible entrepreneurial spirit of which he writes, I can relate to the book and whole-heartedly support the fundamental idea running through it that clearly-defined property rights and simplified procedures for starting new businesses represent the best solution to eradicating poverty in the Third World. I have an 18,000-word Masters in International Business thesis to submit by June 2009. I'd appreciate your suggestions, Metafilter.

Originally, I was going to write about the future of Mercosur and the prospect of the emergence of a single-currency zone. The 'informal economy' really interests me though; more than anything, in fact. I majored in International Politics and I spent a lot of time in university reading about free markets and globalisation, supporting the idea in principle but never fully understanding why it didn't always seem to work in practice, especially given the natural capitalism and industry of the greatest part of the world's poor.

I am travelling to India to work with my company for the month of January and anticipate returning to Brazil in February (I'm currently in Spain). I was wondering whether Metafilter, as erudite as you all are, could give me some suggestions for a really fascinating, promising topic into which I could delve deep and write something original involving Brazil, the informal economy and, perhaps, India. Comparisons are often drawn between the two countries, so I think it could be a very happy match indeed. I am willing to read extensively and carry out extensive field work.

I'm looking for a good balance between something sufficiently academic and theoretical on the one hand, and on the other something that will sustain the reader's interest and not end up turgid and too 'ivory towerish'.

I would love to read your thoughts on the book itself, and any suggestions for my thesis.

On a separate but related note, I would like to know the best way to get in contact with De Soto himself.

Thanks!
posted by Zé Pequeno to Education (8 answers total) 1 user marked this as a favorite
 
I forgot to mention that I'm also interested in anything to do with microfinance.
posted by Zé Pequeno at 3:57 AM on August 18, 2008


Maybe finish the book before deciding to base your thesis on it?
Is your thesis supervisor okay with you using that book?
posted by k8t at 4:53 AM on August 18, 2008


Hello K8t, I'm not necessarily basing my thesis on the book but on the idea of informal economies in general, like I said. Thanks for your contribution though!
posted by Zé Pequeno at 5:12 AM on August 18, 2008


Não sou economista e não sei nada sobre de Soto, pois mesmo assim....

I like your ideas here...

Consider: (1) The correlation (assuming there is one, though there must be) between informal vs. formal economy and government; or (2) The effect of a single-currency zone on informal economy (using, perhaps the intro of the euro in an economically similar country as a comparison); make educated predictions on the effect of mercosur economics on various sectors over time.

Just an idea...
posted by mateuslee at 5:24 AM on August 18, 2008


Perhaps consider the role that microfinance institutions like Grameen Bank can play in the formalization of the informal economy? From what I understand microfinance is a very hot question in India.
posted by nasreddin at 5:37 AM on August 18, 2008


Could you write about how the informal economy is treated in Brazil, India and in other countries in South America? Does that make a difference to their respective wealth?
posted by sien at 5:39 AM on August 18, 2008


One of the reasons that Brazil and India are fun to compare is that they both have such internal disparities. On the one hand, nationally they are simultaneously industrial democracies with staggeringly unequal societies (meaning that the poor are really poor and the rich are really rich). At the same time, there are huge geographical differences within each country: they both have states that are relatively democratic and with well-functioning bureaucracies, and other states that are basically feudal.

Those internal discrepancies are where I would suggest looking, rather than at broad national themes. How is the functioning of the informal economy different in Ceará compared to Rio Grande do Sul, or Orissa compared to Kerala?

Also, by now de Soto is old hat — he has his lovers and his critics, and his ideas have been implemented in various ways in a lot of places. That means that you don't just have to look at his ideas as abstract concepts; instead you can find places where both small- and large-scale projects were based on his book in both Brazil and India.

But really this needs to be a conversation between you and your thesis adviser. Pulling in ideas from AskMe is no worse than any other way, but unless your adviser is on board with your direction, bad things will ensue.
posted by Forktine at 5:50 AM on August 18, 2008


You could try reaching de Soto through the UNDP commission he co-chairs:

http://www.undp.org/legalempowerment/

Fork is right - he's not exactly the newest idea on the block, but he has been influential in changing some assumptions in development thinking and some of his insights remain valid. William Easterly has taken on some of that thinking; its been rejected by Jeff Sachs, Bono, Bill Gates and others who believe that development is primarily a problem of quantity of assistance rather than its quality. And this may be the interesting direction for your thesis - to what extent has bi-lateral or multi-lateral assistance been positive or negative force; to what extent was the target country able to influence the course of assistance and to what extent were assistance decisions simply imposed by outside entities; to what extent are huge private donors like Gates Foundation any better or worse than governments or multi-lateral organizations.
posted by RandlePatrickMcMurphy at 7:46 AM on August 18, 2008


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