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The Other Path: The Economic Answer to Terrorism

3.87  ·  Rating details ·  338 ratings  ·  27 reviews
In this, his classic book on the informal economy of Peru and the reasons why poverty can be a breeding ground for terrorists, Hernando De Soto describes the forces that keep people dependent on underground economies: the bureaucratic barriers to legal property ownership and the lack of legal structures that recognize and encourage ownership of assets. It is exactly these ...more
Paperback, 352 pages
Published September 5th 2002 by Basic Books (first published 1989)
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Jan 04, 2015 rated it really liked it
Shelves: economic-liberty
Four and a half stars. I did read the 1991 'Invisible Revolution' edition and not the more recent 'Answer to Terrorism' edition, and I do not know if there is any difference. I would highly recommend this book for anyone of a smaller government mindset (Libertarians, Propertarians, etc.); this should be required reading of anyone looking into or leaning towards Anarcho-Capitalism. I have read Rothbard's For a New Liberty: The Libertarian Manifesto and recently wrote a very favorable review of ...more
Charles Allan
Jan 15, 2013 rated it it was amazing
In The Other Path, Hernando de Soto makes the populist argument for capitalism and property rights in the 3rd world.

The social and economic environment of many 3rd world nations resembles feudalism, with entrenched economic privileges and near-overt ethnic discrimination. The privileges of the elite are protected by law, which creates economic stagnation for the poor - if they follow the law, which, out of the need for survival, they don't!

So, an informal economy springs up, with noisy
Oct 24, 2007 rated it really liked it  ·  review of another edition
I had little choice about reading this book because I had to review it for a class. But it was surprisingly interesting - mostly because it was a politically motivated book than an academically inspired one.

Much of the book is devoted to a description of how the informal sector formed in Lima, Peru. Basically, the government tried to block peasants from coming to the city by making ridiculously strict laws that didn't allow them to legally live or function there. So they made their own markets,
Alkek Library
Jan 07, 2013 rated it it was amazing
In The Other Path, Hernando de Soto makes the populist argument for capitalism and property rights in the 3rd world.

The social and economic environment of many 3rd world nations resembles feudalism, with entrenched economic privileges and near-overt ethnic discrimination. The privileges of the elite are protected by law, which creates economic stagnation for the poor - if they follow the law, which, out of the need for survival, they don't!

So, an informal economy springs up, with noisy
Jun 04, 2017 rated it really liked it
// From my 2004 book diary:

Academic economic writing for the common man? Yes, both in audience and intent. Like the writings of Joseph Stieglitz, here is a book that takes on serious issues that affect our world today. It deals with them in a measured critical way. Not just complaining about the things that make them so, but also what can be done today and tomorrow to address them.

Hernando De Soto (not to be mistaken with the 16th century Spanish Explorer) addresses the challenge of inequality.
Feb 14, 2009 rated it did not like it
Check out this review in Slate:

"On the white board, de Soto's ideas flatter the imaginations and sensibilities of Davos-types (particularly the American ones). But on the ground, it turns out that de Soto's ideas are doing very little to solve the actual problems of poor people."

For example, when Cambodia adopted a de Soto inspired program, this happened:

"In the nine months or so leading up to the project kickoff, a
Dennis Murphy
Jan 08, 2020 rated it really liked it
The Other Path: The Economic Answer to Terrorism by Hernando de Soto is one of those books that are difficult to read out of order. It is in some ways unfortunate that I read the mystery of capital first, as this book reads like an extended case study that would have been about twenty or so pages in the follow-up book. This is not helped by three additional problems. Most of the book is set out to argue for a case that has since become an anachronism, a lot of the writing is dense to the point ...more
May 17, 2018 rated it really liked it
Hernándo de Soto has a very interesting insight. Definitely, widespread informality in the economy implies a distortion in the legal system. Most of the time, Latinamerican countries have tried to eliminate the informal sector of the economy in a violent way instead of creating a new legal framework which allows it to become part of the formal economy. This book is really good for all those interested in development economics.
Emily Bell
Feb 19, 2017 rated it liked it
I now know some things about the Peruvian economy of the 1980s but still know essentially nothing about Peru. Which is cool, this book is mostly about the weird economic systems in place in Peru in the 80s, so it definitely did its job.
Eh, it was okay.

I think the general thrust of the book - that informality is the result of individuals trying to find a way to improve their lot in life via the free market outside the formal economy, in instances when it is closed to them - is completely reasonable and makes good economic sense. However, the execution of this book leaves a bit to be desired.

First, where, oh where, are the footnotes?! De Soto talks all about the many studies and surveys his organization has conducted that range
Jun 07, 2010 rated it really liked it
Shelves: global-health
This is an interesting book, as much for its historical context as for content. I would recommend it for people interested in Peru or Sendero. For those more interested in development in general I'd recommend de Soto's other book, the Mystery of Capital.
The first section of the book is spent tracing the history of land invasions in the country - for example, San Isidro began as one. The only thing I was curious that didn't get addressed was how this practice in Peru was related to similar trends
Jun 10, 2008 rated it it was amazing
If you only read one book ever about economics this should be it. De Soto's book is not so much about the dry working of an economic system as the triumph of the human spirit against the oppressive "help" of the state. De Soto explains exactly how a government that tries to control the economy for the benefit of its citizens only suceeds in perverting, stifling and distorting the productive impulses of the citizenry. While doing this he also demonstrates how entrepreneurs create ingenious ...more
Aug 29, 2007 rated it liked it
Recommends it for: those working in the int'l development field
Shelves: professional
This book is de riguer if you work in regulatory reform in developing countries. However, it is not a lofty treatise on the subject, its a detailed history of informal economies in Peru - first informal settlements (that become satellite towns) then informal transportation, etc. So in that way, I was glad because a whole book on regulatory reform could be incredibly boring (and I work in the field!) It sometimes bogs down in detail, but overall its very interesting. In addition the subtitle "The ...more
Jan 16, 2009 rated it it was ok
unfortunately, i only got through about 50% of this book. it was an assigned reading for a grad class. the information de soto presents is very intriguing -- about the extralegal sector in peru -- but the text hasn't been updated since its initial late 80s/early 90s publication. as such, much of the info seems dated.

also, while not exactly a neocon, de soto and his ideas come off as a bit TOO friendly toward neoliberalism. his narratives of peru's extralegal business and settlement groups are
Alex McManus
Jan 09, 2015 rated it really liked it
This book helped me realize the energy, creativity, and resourcefulness of our species, especially the entrepreneurial drive of the very poor who figure out ways to survive and thrive when unhampered by the State.

This shelf is dedicated to some of the books that have influenced me as I wrote Makers of Fire. Some of these books did not necessarily influence the book directly, but in terms of general frameworks. Others offered particular ideas that ignited my imagination. Makers of Fire: The
Abram Dorrough
Nov 25, 2016 rated it liked it
While the argument is well researched and explained, the book overall contains much more specific Peruvian history than I was expecting. Of course, it is necessary to give background, but I felt that much the first half of the book was somewhat extraneous given the author's overall intent.

The book is more like three lengthy essays pasted together than an actual book, but as a whole it holds mostly relevant information and provides a unique argument as to how to combat terrorism economically and
Glenn Robinson
Mar 11, 2015 rated it really liked it  ·  review of another edition
Important study of Peru and what happens (or does not happen) when there is excessive regulation. In Peru's case, excessive regulation led to the strangulation of the economy and the creation of black market industries, rogue bus systems, food industries and mass takeover of land in which to build houses. Reduction of regulations led to more prosperity, better living standards and healthier, safer living.
Jun 20, 2007 rated it it was ok
Recommends it for: Policy wonks with time on their hands
I just couldn't do it - the introduction was moderately interesting if a tad self-congratulatory but it just didn't seem to be leading anywhere, I was already pretty convinced about his premise and I just had absolutely no desire to continue reading. If this book changed anyone's life, let me know and maybe I'll try again . . .
Hayley Smith-Kirkham
Jan 06, 2011 rated it really liked it
Um, the title after the colon is "The Invisible Revolution in the Third World," not "The Economic Answer to Terrorism." This must be a newer edition appealing to newer concerns. But fuck that. I just can't find the original.
L. Stephen Wolfe
Jun 23, 2010 rated it really liked it
Recommends it for: People who want to help the poor in other nations.
Recommended to L. by: my wife
Explains why respect for invididual (not just corporate) property rights is the best way to improve living standards among the world's poor people. This book is not easy reading, but should be required for all college graduates.
Ryan Kirwin
May 12, 2010 rated it liked it
Fairly heavy-duty treatment of El Sendero Lumioso (The Shining Path) in Peru. A background to The Mystery of Capitalism. Maybe good for Undergrad / Grad student in Econ / Dev. Econ - pretty dry otherwise.
Apr 20, 2011 rated it liked it  ·  review of another edition
Shelves: german, non-fiction
A very informative book about the situation in Peru, concerning the local work-force, which is organized to a great extent informally.
Informality is the engine that keeps the country running (at least at the time the book is talking about, and surely quite a long time after).
First heard of De Soto when he was acting as advisor to Mario Vargas Llosa's presidential run. Wish I could vote for them up here.

Understand he's updated the book relating to the Shining Path and other terrorist movements. Will have to see the new version.
Dec 30, 2007 rated it it was amazing
This man has actually discovered the secret to world peace and prosperity.
Dec 04, 2008 rated it liked it
Shelves: development
Hernando de Soto's look at informal economies...very interesting.
Nov 30, 2008 marked it as to-read
bought this in grad school and started it a while back - time to read something i can learn from again.
Gus Saldivar
rated it it was amazing
Jun 30, 2008
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Feb 18, 2015
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“If you are committed to economic development in your country, should terror suddenly erupt, you cannot just stand on the sidelines claiming that you are an economist or a lawyer or businessman without any expertise in political violence. You have an obligation to use your professional training to try to understand the economic and legal reasons why poor people take tip arms and then identify ways of using that bitterness and anger against the status quo to create an efficient legal sys- tenm under which everyone can prosper.” 0 likes
“The principal enemy of these entrepreneurs is the existing legal s}'stem, which excludes them.” 0 likes
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