Reference no: EM131833392
Read the following excerpt
Informal Work and Dead Capital
"Dead capital" is Hernando de Soto's term for an asset that cannot easily be bought, sold, valued or used as an investment. Despite obvious poverty in the informal sector in Peru, de Soto's work shows that even those who live in slums possess far more capital than anyone realizes. In fact, the informal economy is so large in Peru that almost 70 percent of the working population work in informal arrangements. ... Possessions ... are not represented in such a way as to make them fungible (i.e. easily exchangeable) assets. Dead capital cannot, therefore, create value for the poor. What you're really leaving behind is the world of legally enforceable transactions and property rights. The developed world has devised a formal property system of titles, title registries, and inclusive property law that includes real estate used for homes or businesses. De Soto shows that this is in a large part why some nations are rich while others remain in poverty. He says:
With titles, shares and property laws, people could suddenly go beyond looking at their assets as they are - houses used for shelter - to thinking about what they could be-things like security for credit to start or expand a business.
The moment Westerners were able to focus on the title of a house and not just the house itself, they achieved a huge advantage over the rest of humanity. When purchasing a home, an open records system enables buyers and sellers not only to gauge the value of homes in nearby areas, but to set reasonable prices based on comparative values. Clear titles and title insurance give buyers the confidence they need to make a purchase. No clear title? No sale. The system also gives banks the assurance they need to offer a mortgage. It represents a real house (house, land, a factory, a car, etc.)
6. Many of the owners of houses in 'shanti towns' in the outskirts of Peru's capital Lima, are happy that they do not have to pay land taxes, or municipal rates, as we do in Australia. Is this an advantageous situation to be in for the poor in Peru?
|
Summarize the data displayed in your table
: Summarize the data displayed in your table. Your audience is a business executive or policy maker who wants to know about patterns or relationships.
|
|
Comparative advantage in producing coffee
: When the country trades, its consumption possibilities now has an absolute slope of 3, because it has a comparative advantage in producing coffee
|
|
Evaluate the level of efficiency of audit risk management
: Analyze the actions taken by Cardillo's outside auditors and evaluate the level of efficiency of the audit risk management in this case study.
|
|
What is the cost of the car
: A car dealer offers you a car loan with payments of 4,500, semi-annually, for 4 years. If the posted APR on the loan is 5%, what is the cost of the car?
|
|
Informal work and dead capital
: Dead capital" is Hernando de Soto's term for an asset that cannot easily be bought, sold, valued or used as an investment. Despite obvious poverty
|
|
Develop a situation analysis and sm plan for the enterprise
: An executive summary of the report's findings and recommendation for key areas for the SM marketing plan - develop a situation analysis & SM plan
|
|
Communism bloody century
: In the 100 years since Lenin's coup in Russia, the ideology devoted to abolishing markets and private property has left a long, murderous trail of destruction
|
|
Assumptions of the production possibilities curve
: What are the assumptions of the production possibilities curve? How would they be described?
|
|
Why did the insurance company raise the rates so much
: Why did the insurance company raise the rates so much? How would you estimate a fair insurance rate?
|