Hernando de Soto for World Bank Chief Economist?

According to Mark Davis, writing in National Review: "Instead of maintaining the status quo, new World Bank President Robert Zoellick would do better for the world’s poor and for the credibility of the World Bank’s mission if he did the unexpected. He should reorient World Bank policies around the insights of a Peruvian economist Hernando de Soto, and perhaps install de Soto in the prestigious post of World Bank chief economist.

Millions of poor who operate small businesses in the developing world exist in a legal grey zone. They have no clear, legal title to assets against which they can borrow to expand and grow. And they are always in danger that a visiting policeman or petty official will stop by to extract a bribe for looking the other way.

This is not a trivial matter. De Soto estimates that the amount of “dead capital” in untitled assets held by the world’s poor is at least $9.3 trillion — far in excess of anything the developing world can lend, offer, or even invest. In Egypt, de Soto estimates the poor own 55 times the amount of all foreign direct investment in that country since the time of Napoleon.

In essence, the World Bank is like a county agriculture-extension agency trying to irrigate a dry plain, while Hernando de Soto is the geologist patiently explaining that underneath is an immense and untapped water table."

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