Mathieu versus de Soto: A Comment

Abstract

In the previous issue of Forum for Development Studies, and in the context of rural Africa, Paul Mathieu airs some concerns about Hernando de Soto's theory of how formalisation of rights to assets may assist in poverty alleviation. In a sharp rejoinder in the same issue, de Soto ridicules Mathieu and his concerns. Mathieu's points, however, cannot be dismissed so easily. First, governments may be unwilling to implement changes for reasons of both individual power and economic gain. Second, formalisation programmes are costly, and the substantial funds needed for design and implementation do not seem compatible with the current trend of cutting public expenditure. Finally, de Soto does not pay enough attention to the problem of reaching agreements about acceptable and expedient rights systems. An assertion that all rights are compatible on the ground ignores important problems related to conflicting narratives, identities, and legal traditions. Dr de Soto's ideas about poverty alleviation are, as yet, untested in Africa, and critical views on obstacles that may be encountered should be welcomed, not dismissed.

Keywords:

• rights formalisation
• poverty
• Africa
• asset markets
• mystery of capital