I pre-ordered this book in advance, 6 months before it was
actually published in 2004 -- when it first came out, it was very exciting to
lots of people. The book actually inspired a big convention in
Now years later, much of what C. K. wrote about in his book seems self-evident, but that's mostly because the book itself was so widely read. His emphasis is on very large companies like national firms and multinationals. Small business and entrepreneurship are not his personal area of interest. His case (and the strength of the book is that it is all case studies) was that very big companies, because of their over-comfortableness with developed markets, are completely overlooking huge opportunities to profit from products and services pitched to the 4,000 million (!) consumers who are economically at the "Bottom of the Pyramid." Companies can be quite profitable in these markets (he gives many examples) and, while they're at it, they effectively organize the highly inefficient, uncompetitive, and mostly informal markets now serving these people, bringing down costs for the things poor people need, while increasing available choice, and increasing quality.
This is a lovely little 300-page paperback, written originally in Swedish in 2001, translated to English in 2003, but still quite relevant today. It's full of statistics and graphs, but easy to read. It's the most tightly written essay I know of laying out the proven successes of freedom and capitalism, specifically, in poverty reduction. Highly recommended. Here's a testimonial off the back cover:
"The particular charm of this passionate essay is that
capitalism would not interest Norberg if it were not such a mighty engine of
human liberty. It is a young man's book, addressed to the idealistic
young." -- Rosemary Righter, The Times of
Easterly is an economics professor in
Page 11: "How can the West end poverty in the Rest? Setting a beautiful goal such as making poverty history, the Planners' approach then tries to design the ideal aid agencies, administrative plans, and financial resources that will do the job... Setting a prefixed (and grandiose) goal is irrational because there is no reason to assume that the goal is attainable at a reasonable cost with the available means. It doesn't make sense to have the goal that your cow will win the Kentucky Derby. No amount of expert training will create a Derby-winning race cow. It makes more sense to ask, "what useful things can a cow do?" A cow can nicely feed a family with a steady supply of milk, butter, cheese, and (unfortunately for the cow) beef. Of course, you could win the Kentucky Derby if you had a championship-caliber horse, but this book will review the decades of experience that show aid agencies to be cows, not racehorses."
Page 15: "... complexity dooms any attempt to achieve the end of poverty through a plan, and no rich society has ended poverty in this way. It is only when rich-country politicians gaze at the non-voters in the rest of the world that they become Planners. This is another clue to the likelihood of planning: outsiders are more likely to be Planners, while insiders are forced by their fellow insiders to be Searchers."
And at the end of the book, page 383: "With this historical record, perhaps sixty years of Planners is enough. Maybe it is now time to give the Searchers a chance. Even though the biggest payoff comes from local Searchers who solve their own problems, Searchers from the rich West can do good, specific things for poor people."
There is a huge fan club out there for Hernando De Soto, and I'm certainly in it. What's very cool about him is that he's an academic economist who has made major contributions to development theory, but he has done it all by getting out in the real world, and totally getting his hands dirty -- very dirty in fact, to the point, even, of risking his life. Sort of like the Indiana Jones of development economics. An earlier book of his is also very good, The Other Path -- subtitled "the economic answer to terrorism," it is particularly apt today. It was written 20 years ago, and tells the first-hand story of his original work carefully cataloging the strangling power of government bureaucracy in Peru, and his amazing real-life successes actually simplifying procedures for common people and bringing them into the formal economy there in the late 1980s. His work on the ground literally contributed to the defeat of the Sendero Luminoso. So he's an amazing guy.
The Mystery of Capital belongs on any bookshelf alongside
Prahalad's "Fortune at the Bottom." Where Prahalad
talks about the huge potential purchasing power in developing economies,
Really this is more of an annual publication by the World
Bank, but at almost 200 pages it's like a book, and in places it reads like a
book. The project is seven years old now, and was actually inspired by the work
of Hernando
"The Doing Business project encompasses two types of
data. The first come from readings of laws and regulations. The second are time
and motion indicators that measure the efficiency in achieving a regulatory
goal (such as granting the legal identity of the business). Within the time and
motion indicators, cost estimates are recorded from official fee schedules where
applicable. Here, Doing Business builds on Hernando