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Will Formalising Property Rights Reduce Poverty in South Africa's 'second
economy'?
Questioning the mythologies of Hernando de Soto
Ben Cousins, Tessa Cousins, Donna Hornby,
Rosalie Kingwill, Lauren Royston and
Warren Smit
PLAAS Policy Brief Number 18, October 2005
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De Soto's influential book
The Mystery of Capital
offers a simple yet beguiling
message: capitalism can be made to work for the poor through formalising their
property rights in houses, land and small businesses.
However, research from
South Africa suggests that many of de Soto's policy prescriptions may be
inappropriate for the poor and may in fact have an adverse impact on their
security and well-being.
The authors of the study argue that more attention
needs to be given to supporting existing social practices that have widespread
legitimacy within communities. They argue that features of extra-legal property
regimes such as: social embeddedness; the importance of land and housing as
assets that help secure livelihoods; the layered and relative nature of property
rights; and the flexible character of boundaries need to be built upon.
The authors conclude that the entire legal and social
complex around which notions of 'formal' and 'informal' property are constituted
needs to be interrogated more rigorously.
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