Excellent news from Egypt

Egypt is making some very big and important reforms.

From an article by Steve Forbes:

...The catalyst is something that's prosaic yet absolutely essential for a sustained, innovation-oriented economic takeoff: property rights...

...Most development experts ignore the elephant in the room--the fact that most people in the world operate outside their country's formal legal systems. In Egypt's case, 88% of all enterprises are extralegal, as is 92% of the country's housing. Egypt and other developing countries do not lack for entrepreneurs; they lack institutions and legal structures that would enable theirentrepreneurs to expand and truly flourish. The Peru-based Institute for Liberty and Democracy, which spurred this project and is headed by economist Hernando de Soto, estimates that Egypt's shadow economy has accumulated $248 billion in assets. But as De Soto notes, "All this activity and all the assets in the extralegal economy are dead capital--assets that cannot be leveraged to obtain credit and investment. To convert all of this dead capital into live capital requires the two cornerstones of a market-based rule of law: legal property rights that cover all of Egypt's assets and good business law for entrepreneurs."...(Thanks to Brothers Judd)

There's a lot of this sort of thing going on in the world right now. (Here's one.)

And it's the power of ideas at work. Even a decade ago you would have heard that Egypt needed "investment in infrastructure," or some such.

Posted by John Weidner at April 3, 2004 7:42 AM