- Value [1] Good Laws and Market Economies
- No nation can have a strong market economy as long as most of its people remain on the outside just looking in. The existence
of such massive exclusion generates two parallel economies, legal and extralegal. An elite minority enjoys the economic benefits
of the law and globalization, while the majority of entrepreneurs are stuck in poverty, where their assets –adding up to more
than US$ 10 trillion worldwide– languish as dead capital in the shadows of the law. To survive, to protect their assets, and
to do as much business as possible, the extralegals create their own rules. But because these local arrangements are full
of shortcomings and are not easily enforceable, the extralegals also create their own social, political and economic problems
that affect the society at large. Since the fall of the Berlin Wall, responsible nations around the developing world have
worked hard to make the transition to a market economy –and have paid for their efforts with bitter disappointment. Populist
leaders have used this failure of the free market system to thrive and wipe out poverty in the developing world to beat their
“anti-globalization” drums. But the ILD believes that the real enemy is within –in the flawed legal systems of developing
nations that make it virtually impossible for the majority of their people –and their assets– to gain a stake in the market.
The people of these countries have talent, enthusiasm, and an astonishing ability to wring a profit out of practically nothing.
THE REAL ENEMY: BAD LAWS What the poor majority in the developing world do not have, is easy access to the legal system, which,
in the advanced nations of the world and for the elite in their own countries, is the gateway to economic success. For it
is in the legal system where property documents are created and standardized according to law. That documentation builds a
public memory that permits society to engage in such crucial economic activities as identifying and gaining access to information
about individuals, their assets, their titles, rights, charges and obligations; establishing the limits of liability for businesses;
knowing an asset’s previous economic situation; assuring protection of third parties; and quantifying and valuing assets and
rights. These public memory mechanisms in turn facilitate such opportunities as access to credit, the establishment of systems
of identification, the creation of systems for credit and insurance information, the provision for housing and infrastructure,
the issue of shares, the mortgage of property, and a host of other economic activities that drive a modern market economy.
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- Value [2] Ability to Listen
- One of the skills that the ILD values most is the ability to listen. Our researchers talk to ordinary people and shantytown
entrepreneurs; they seek out the best sources on the street and in rural areas for information on the practices and norms
of the extralegal sector. ILD researchers also employ in-depth interviews, state-of-the-art surveys, and focus groups. It
is not unusual for ILD researchers trying to understand a particular area of research to live for a period of time among the
people.
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