The founder and president of the Institute for Liberty and Democracy explains the effort to bring property rights and the rule of law to developing economies.

1 November 2012 - Hernando de Soto is founder and president of the Institute for Liberty and Democracy. A native of Peru, de Soto was educated in Switzerland, where he pursued a career in business before returning to Lima. He is the author of The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000). The following is an edited transcript of the interview, which was conducted by Rik Kirkland, McKinsey’s director of publishing.

Interview transcript

Moving the world into the formal economy
I am chairman of an organization, a nonprofit organization called the ILD, the Institute for Liberty and Democracy of Peru, that over time has specialized in explaining how you evolve from a society where the majority of trade, business, and assets are controlled through customary—shall we say, through unconventional—systems, rather than through law. How do you take that society and move it to the rule of law? Now that’s something you did, of course, in the United States and Europe, but it was in the 18th and 19th centuries.

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