Hernando de Soto (economist)

In January 2021, a strike was filed that considered that the Go on Country electoral court had not been properly formed. This strike was declared unfounded by the JEE.

On 24 February 2021, following an approach to advise Francisco Sagasti on the COVID-19 pandemic management in Peru, De Soto announced the first Peruvian shadow cabinet. Mainly composed of his campaign technical team, the main purpose of the opposition cabinet is to offer an alternative in order for the government to concur and apply during the crisis.

De Soto rejected the exclusion of Rafael López Aliaga, an electoral rival in the 2021 elections, for which he appeared at the demonstration of his followers on the outskirts of the JNE, in which Lopez Aliaga was, who praised him.

De Soto announced his candidacy for president in September 2020 under the party Go on Country. Prior to the announcement, De Soto expressed hesitation to formally run for president lest politicizing and potentially delegitimizing work done by the ILD and himself on dead capital.

On 30 October 2020, De Soto presented his technical team, which included the former president of CONFIEP Miguel Vega Alvear, businessman Carlos Añaños, former Fujimori minister and first Vice President Francisco Tudela, former GEIN commander Marco Miyashiro, the former head of the Operation Chavín de Huantar José Williams, the diplomat Álvaro de Soto, among others.

On December 14, 2020, de Soto shared an alleged secret poll in Beto Ortiz's show in Willax Televisión. That poll ranked him first. De Soto spoke in the interview that: "The way this (the cadres) comes to us is because people very close to the state apparatus, it seems, were outraged at the enormous difference between the polls they handle."

Once again In January 2016, de Soto released his second article, How to Win the War on Terror, which focused on defeating terrorism through promoting strong property rights. The article was distributed by Project Syndicate and published in dozens of countries and languages, including in Switzerland by the World Economic Forum in advance of their 2016 forum.

In February 2016, de Soto took a break from countering Piketty's work and wrote an article addressing Pope Francis’s trip to Mexico titled, A Mexican Impasse for the Pope. The article encourages the Pope and the Vatican to address the lack of property rights among the poor in countries like Mexico as a solution to global refugee crises.

In May 2015, de Soto attended the 1st Annual Block Chain Summit hosted by British billionaire Richard Branson at his private Caribbean residence, Necker Island. De Soto was one of three moderators, along with Michael J. Casey, former Wall Street Journal senior columnist and Matthew Bishop, editor at The Economist. Advocates of blockchain technology argue that it is well-suited to acting as a public ledger to help achieve de Soto's objective of formalising the informally-held property rights of groups like the indigenous peoples of Peru.

De Soto presented a property application of Bitcoin to Sheikh Nahyan bin Mubarak Al Nahyan of the United Arab Emirates and financial authorities of Abu Dhabi at a second Blockchain summit held in Abu Dhabi in 2015.

After losing core funding from USAID, ILD laid off the majority of their employees from their San Isidro office. In 2014–2015, de Soto and a small team working out of his house began to attempt to guide the political process in Peru, as presidential elections were due to take place in 2016, by finding solutions to the ongoing national mining crisis. De Soto has been a strong advocate for the formalisation of the informal miners that are scattered throughout Peru. Since 2014, several large national investment projects, including Las Bambas, and Tia Maria have been disrupted by violent protests by informal miners against government regulation and formal extractive industries. In July 2015, de Soto alleged that former Shining Path militants who have taken up the ecological cause were paralyzing some $70 billion in mining investment in Peru. Furthermore, recorded video debates between the former extremists and de Soto were published on ILD's YouTube channel and revealed that the Shining Path militants agree that property rights could be an important part of the solution to social conflicts in Peru. De Soto's stated goal is to determine the roots of informal hostility against multinationals and identify what is needed to build a national social contract on extractive industries that could harmonize their property interests with those of multinationals as opposed to creating conflict.

In October 2014, de Soto published an article in The Wall Street Journal, "The Capitalist Cure for Terrorism", that stated an aggressive agenda for economic empowerment was needed in the Middle East in order to defeat terrorist groups like ISIL. He argued that the U.S. should promote an agenda similar to what was successfully used in Peru to defeat the Shining Path in the 1990s. He also mentions in the article that local policymakers in the Middle East are missing the fact that if ordinary people cannot play the game legally, they will be far less able to resist a terrorist offensive. The article received praise among high-level global Right-Wing politicians such as US presidential candidates Rand Paul and Jeb Bush.

In 2014, de Soto started to refute French economist Thomas Piketty’s thesis by arguing that his recent attacks against capital in his worldwide best seller book Capital in the 21st Century were unjustified. His op-ed article challenging Piketty, ‘The Poor Against Piketty’ (French: Les pauvres contre Piketty) was first published in France's news magazine Le Point in April 2015.

"Capitalism lives in two worlds," De Soto wrote in the Financial Times in January 2012. "There is the visible one of palm trees and Panamanian ships, but it is the other – made up of the property information cocooned in laws and records – that allows us to organize and understand fragments of reality and join them creatively." De Soto argued that the knowledge in those public memory systems, which "helped Capitalism triumph," was distorted over the past 15 years or so. "Until this knowledge system is repaired," he wrote, "neither US nor European capitalism will recover."

Empirical studies by Argentine economists Sebastian Galiani and Ernesto Schargrodsky found a modest relationship between titling and credit market access (contradicting de Soto's research), but have also pointed out that families with titles "substantially increased housing investment, reduced household size, and improved the education of their children relative to the control group". In a 2012 book by Yale University political science methodologist Thad Dunning, he argues that Galiani and Schargrodsky's studies provide "highly credible" claims because the studies rely on true randomization, whereas De Soto's study did not (and is thus vulnerable to confounding variables).

On January 31, 2012, de Soto and his publisher were fined by the Peruvian intellectual property rights organization INDECOPI for excluding the names of co-authors Enrique Ghersi and Mario Ghibellini in newer editions of his 1986 book The Other Path.

After previously working with her father Alberto, de Soto joined Keiko Fujimori with her election campaigns for the 2011 and 2016 Peruvian general election when Fujimori committed to implementing de Soto's property rights reforms. In an interview during the first campaign ok Keiko Fujimori, he also stated that Osama bin Laden's death was achieved thanks to land titling, a concept he holds as a way out of poverty. As part of the Fuerza Popular team, he harshly criticized Peruvians for Change candidate Pedro Pablo Kuczynski, whom he described as a "deserter and coward." In an interview with the newspaper Perú21, De Soto said that Kuczynski "is a gringo who does not know Peru, because there are those who do. He is a foreigner to the Peruvian reality."

In another series of articles that appeared in US and Europe in 2011, de Soto used the findings of ILD field research in Egypt, Tunisia and Libya to make his case for "the economic roots of the Arab Spring." The ongoing Arab revolutions, he argued, were "economic revolutions" driven mainly by the frustrations of 200 million ordinary Arabs who depended on the informal economy for their livelihoods. He pointed to the ILD's earlier 2004 findings in Egypt, which revealed the nation's largest employer with 92% of the property in the informal economy – assets worth almost $247 billion. Also, as proof of the extent of desperation among MENA’s entrepreneurs, he elaborated ILD's exclusive research on Mohamed Bouazizi, the Tunisian street vendor whose public self-immolation in protest of the expropriation of his goods and scale literally sparked the Jasmine Revolution in Tunisia, which spread unrest through the Arab world.

Since 2008, de Soto has been refining his thesis about the importance of property rights to development in response to his organization's findings that a number of new global threats have "property rights distortions" at their root. In essays, that appeared from early 2009 into 2012 in media outlets in the U.S. and Europe, de Soto argued that the reason why the U.S. and European economies were mired in recession was the result of a "knowledge crisis" not a financial one. He has termed housing assets as "dead capital," in his papers on household ownership and deeds.

In 2006, de Soto served as a personal representative of President Alan García, and negotiated the Peru-United States Free Trade Agreement after 11 rounds of negotiation. In 2009, the ILD turned its attention back to Peru and the plight of the indigenous peoples of the Peruvian Amazon jungle. In response to Peru's President García's call to all Peruvians to present their proposals toward solving the problems leading to the bloody incidents in Bagua, the ILD assessed the situation and presented its preliminary findings. ILD published a short videotaped documentary, The Mystery of Capital among the Indigenous Peoples of the Amazon, summarizing its findings from indigenous communities in Alaska, Canada and the Peruvian jungle.

In addition, he has written, with Francis Cheneval, Swiss Human Rights Book Volume 1: Realizing Property Rights, published in 2006 – a collection of papers presented at an international symposium in Switzerland in 2006 on the urgency of property rights in impoverished countries for small business owners, women, and other vulnerable groups, such as the poor and political refugees. The book includes a paper on the ILD's work in Tanzania delivered by Hernando de Soto.

As de Soto began to work with the government of Gloria Macapagal Arroyo in the Philippines in 2004, investigative journalism website Bulatlat described de Soto's work as "rich people's reformism", writing "The secret to de Soto's and ILD's popularity among political, economic and developmental elites ultimately lies in their unashamed conservatism, defense of the status quo and promise of capitalist wealth for the world's poor and exploited. ... Elites get to keep the property they value so much and can continue exploiting and oppressing while the poor – and historically exploited and oppressed – are diverted from systemic struggles by the chimera of becoming wealthy entrepreneurs themselves". In his Planet of Slums, Mike Davis argues that de Soto, who Davis calls "the global guru of neo-liberal populism", is essentially promoting what the statist left in South America and India has always promoted individual land titling. Davis argues that titling is the incorporation into the formal economy of cities, which benefits more wealthy squatters but is disastrous for poorer squatters, and especially tenants who simply cannot afford incorporation into the fully commodified formal economy.

For the 2001 Peruvian general election, de Soto sought to run for president with his Popular Capital party, though he failed to register the party on time in order to participate. At the time, he sought support from left-wing political groups for his candidacy, though they disagreed with his liberal economic policies. He would later become a critic of such groups.

Neoliberal politicians and organizations promoted de Soto's publications, with their endorsements and awards making his books bestsellers. Since the publication of The Mystery of Capital in 2000 and subsequent translations, his ideas have become increasingly influential in the field of development economics. Scholars have disputed that there is a significant relationship between land titles and credit market access.

Time magazine chose De Soto as one of the five leading Latin American innovators of the century in its special May 1999 issue "Leaders of the New Millennium", and included him among the 100 most influential people in the world in 2004. De Soto was also listed as one of the 15 innovators "who will reinvent your future" according to Forbes magazine's 85th anniversary edition. In January 2000, Entwicklung und Zusammenarbeit, the German development magazine, described de Soto as one of the most important development theoreticians. In October 2005, over 20,000 readers of Prospect magazine of the UK and Foreign Policy magazine of the U.S. ranked him as number 13 on the joint survey of the world's Top 100 Public Intellectuals Poll. In October 2016, de Soto was honored with the Brigham-Kanner Property Rights Prize, awarded by the William & Mary Law School during the 13th Annual Brigham-Kanner Property Rights Conference, in recognition of his tireless advocacy of property rights reform as a tool to alleviate global poverty. Hernando de Soto is honorary co-chair for the World Justice Project.

In a recommendation to Fujimori, de Soto called for a "shock" to Peru's economy. De Soto convinced then-president Fujimori to travel to New York City in a meeting organized by the Peruvian Javier Pérez de Cuéllar, secretary general of the United Nations, where they met with the heads of the International Monetary Fund, the World Bank, and the Inter-American Development Bank, who convinced him to follow the guidelines for economic policy set by the international financial institutions. The policies included a 300 percent tax increase, unregulated prices and privatizing two-hundred and fifty state-owned entities. The policies of de Soto caused macroeconomic stability and a reduction in the rate of inflation, though Peru's poverty rate remained largely unchanged with over half of the population living in poverty in 1998. Peru would not see increased growth until the 2000s commodities boom.

In Peru, de Soto's advisory has been recognized as inspiring the economic guidelines—including the loosening of economic regulation, the introduction of austerity measures and the utilization of neoliberal policies—that were ultimately adopted by the government of Alberto Fujimori and established in the 1993 Constitution of Peru. The policies prescribed by de Soto resulted with Peru becoming macro-economically stable following the period of price controls and increased regulation established during the Lost Decade. De Soto would go on to support Alberto's daughter, Keiko Fujimori, serving as an advisor during her presidential campaigns. De Soto worked closely with various Peruvian governments, even serving as a negotiator for the Peru-United States Free Trade Agreement. After years of speculation, de Soto ran for the Peruvian presidency in the 2021 presidential election, placing fourth in an atomized race of 18 nominees.

According to de Soto in 1993, "the virtues of a modern society" were able to be introduced to Latin America as a result of NAFTA. He would later say in 2001 that Mexico's economy and institution would progress due to NAFTA, concluding "All poor countries are lumped together and all rich countries are lumped together; there's this imitation effect".

Between 1992 and 1994, de Soto's ILD piloted a land title program to formally register 200,000 Peruvian households and two years later, expanded the program to Lima and seven other metropolitan areas that held ninety percent of informal housing developments within Peru. The program concluded in 2004 with 1.4 million households being registered and 920,000 land titles being provided.

De Soto resigned from his post as the "Personal Representative of the President" in January 1992, two months prior to the 1992 Peruvian coup d'état, and condemned Fujimori's motivations being influenced by Director of the National Intelligence Service Vladimiro Montesinos, hinting at signs of corruption. In his letter, he called into question "the validity of the anti-drug agreement" that Fujimori adopted. He stated his reasons to resigning as due to "drug trafficking from within the State that sabotages efforts in the fight against drugs", and reportedly due to differences with Montesinos. Both Montesinos and Fujimori would later be indicted for corruption and violation of human rights.

Two months after de Soto resigned, Fujimori launched a self-coup which de Soto again condemned as "stupid, unproductive and blatantly unconstitutional". According to de Soto, one month after the coup the Minister of Economy Carlos Boloña contacted de Soto in desperation, after dozens of countries sanctioned Peru economically by cutting it off from investment and credit in response to the undemocratic event. Boloña resigned from his ministerial post, and de Soto lastly travelled to the 1992 Organization of American States summit in the Bahamas with Fujimori and pressured him to accept democratic elections to prevent another macroeconomic crisis.

The original Spanish-language title of The Other Path is El Otro Sendero, an allusion to de Soto's alternative proposals for development in Peru, countering the attempts of the "Shining Path" ("Sendero Luminoso") to win the support of Peru's poor. Based on five years worth of ILD research into the causes of massive informality and legal exclusion in Peru, the book was also a direct intellectual challenge to the Shining Path, offering to the poor of Peru not the violent overthrow of the system but "the other path" out of poverty, through legal reform. In response, the Senderistas added de Soto to their assassination list. In July 1992, the terrorists sent a second car bomb into ILD headquarters in Lima, killing 3 and wounding 19.

De Soto then began to serve informally as "the President's personal representative" for the first three years of the administration of Alberto Fujimori. De Soto had originally been a part of the economics advisory team of the unsuccessful presidential candidate Mario Vargas Llosa in 1990, but Fujimori later requested de Soto's assistance in resolving the economic issues that were produced by the crisis of the 1980s. The New York Times described de Soto as an "overseas salesman" for the government of Alberto Fujimori in 1990, writing that he had represented the government when meeting with creditors and the United States representatives. Others dubbed de Soto as the "informal president" for Fujimori.

The Washington Consensus would result in socioeconomic exclusion and weakened trade unions in Latin America, resulting with unrest in the region. The consensus resulted with a shrinking middle class in Latin America that prompted dissatisfaction of neoliberalism, a turn to the political left and populist leaders by the late-1990s; in Bolivia, support for Evo Morales was established.

In the World Development journal, a 1990 article by R. G. Rossini and J. J. Thomas of the London School of Economics questioned the statistical basis of de Soto's claims about the size of the informal economy in his first book The Other Path. The ILD responded in the same journal that Rossini and Thomas’ observations "neither [addressed] the central theme of the book, nor [did it address] the main body of quantitative evidence displayed to substantiate the importance of economic and legal barriers that give rise to informal activities. Instead, [they focused] exclusively on four empirical estimates that the book [mentioned] only in passing".

Upon its signing, de Soto expressed support for the creation of the North American Free Trade Agreement (NAFTA). When announcing NAFTA at the Annual Meeting of the Boards of Governors of the International Monetary Fund and World Bank Group on 27 September 1989, President George H. W. Bush – who had adopted de Soto's work for the United States' foreign policy towards the economies of developing countries – praised de Soto for helping inspire free trade.

In his speech announcing NAFTA at the 1989 meeting, Bush stated:

Between 1988 and 1995, de Soto and the Institute for Liberty and Democracy (ILD) were mainly responsible for some four hundred initiatives, laws, and regulations that led to significant changes in Peru's economic system. The ILD became involved with the Peruvian economy at the end of President Alan García's term. De Soto's group began to grown and advertised to the Peruvian public promoting their legislative goals, borrowing some advertisements from American lotteries.

De Soto has published two books about economic development: The Other Path: The Invisible Revolution in the Third World in 1986 in Spanish (with a new edition in 2002 titled The Other Path, The Economic Answer to Terrorism) and in 2000, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free a,.mw-parser-output .citation .cs1-lock-free a{background:linear-gradient(transparent,transparent),url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited a,.mw-parser-output .id-lock-registration a,.mw-parser-output .citation .cs1-lock-limited a,.mw-parser-output .citation .cs1-lock-registration a{background:linear-gradient(transparent,transparent),url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription a,.mw-parser-output .citation .cs1-lock-subscription a{background:linear-gradient(transparent,transparent),url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:linear-gradient(transparent,transparent),url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:#d33}.mw-parser-output .cs1-visible-error{color:#d33}.mw-parser-output .cs1-maint{display:none;color:#3a3;margin-left:0.3em}.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}ISBN 978-0465016150). Both books have been international bestsellers, translated into some 30 languages.

His younger brother Álvaro served in the Peruvian diplomatic corps in Lima, New York City and Geneva and was seconded to United Nations in 1982. He retired from the U.N. in 2007 with the title rank of Assistant Under-Secretary-General; his last position was as the UN Special Coordinator for the Middle East Peace Process.

With the assistance and funding of Fisher and the Atlas Network, de Soto created the Institute for Liberty and Democracy (ILD) in 1981, one of the first neoliberal organizations in Latin America. De Soto would later state "Anthony gave us enormous amounts of information and advice on how to get organized. ... It was on the basis of his vision that we designed the structure of the ILD". In 1984, de Soto received further assistance from the United States president Ronald Reagan's administration, with the National Endowment for Democracy's Center for International Private Enterprise (CIPE) providing ILD with funding and education for advertising campaigns. In 2003, the CIPE would later describe the ILD as being one of its most successful programs. Other funding was then provided by United States Agency for International Development (USAID) and the Smith Richardson Foundation, with USAID assisting the ILD with staging international networks to propagate their ideals. The ILD would then seek popular support in Peru by making informal housing their main concern.

De Soto returned to Peru on the behalf of gold placer investors at the age of 38 in 1979 at a time when neoliberal policy was moving from the fringes of economic theory to mainstream practice. Upon de Soto's return in 1979, he met with Friedrich Hayek, a free market proponent who helped create the Mont Pelerin Society. Hayek, who sought to promote neoliberalism through a network of "second hand dealers", choosing de Soto. After making connections with Hayek, de Soto was acquainted with Sir Antony Fisher, a British businessman who created the Atlas Network, a nonprofit libertarian umbrella group that consolidated funds and research from businesses in the United States and Europe in order to create neoliberal organizations in developing countries.

In exile, de Soto was educated in Switzerland where he attended the International School of Geneva. He studied social psychology in National University of Saint Augustine in Arequipa, Peru. He returned to Geneva and received a bachelor's degree in economics from the University of Geneva. In 1967, he earned a master's degree in international law and economics from Graduate Institute of International Studies, also in Geneva.

Another strike was filed against him by a citizen, because he points out that Hernando de Soto "has entered in the Academic Training section of the resume, which has the academic degree 'demi license en sciences economiques' awarded by the University of Geneva, which would have been obtained in 1964.”. But since this degree or title is not registered with SUNEDU, false information would be declared and it should be excluded from the candidacy.

Hernando Soto Polar (commonly known Hernando de Soto /dəˈsoʊtoʊ/; born June 2, 1941) is a prominent Peruvian economist known for his work on the informal economy and on the importance of business and property rights. His work on the developing world has earned him praise worldwide by numerous heads of state, particularly for his publication The Mystery of Capital and The Other Path. He is the current president of the Institute for Liberty and Democracy (ILD), a think tank devoted to promoting economic development in developing countries located in Lima, Peru.

De Soto was born on 2 June 1941 in Arequipa, Peru. His father José Alberto Soto was a Peruvian diplomat and lawyer. After the 1948 military coup in Peru, his parents chose exile in Europe, taking their two young sons with them. His father worked for the International Labour Organization following their exile and would often send de Soto back to Peru during the summer months.