50 Things That Made The Modern Economy With Tim Harford

Some of the most important parts of our modern economy can't be seen, but they can be heard.

That's what one Peruvian economist concluded while walking through the idyllic rice fields

of Bali, Indonesia, in the 1990s.

As he passed one farm, a dog would bark at his approach.

Then quite suddenly, the first animal would stop, and a new guardian would begin to yap

away.

The boundary between one farm and the next was invisible to him, but the dog's knew exactly

where it was.

The economist's name is Hernando de Soto.

He returned to Indonesia's capital Jakarta and met with cabinet ministers to discuss setting

up a formal register of property rights.

They already knew everything they needed to know, he said, cheekily.

They merely had to ask the dogs of Bali who owned what.

Hernando de Soto is a big name in development economics.

His energetic opposition to Peruvian Maoist terrorists, the Shining Path, made him enough

of a target that they tried to kill him three times.

And his big idea is to make sure that the legal system can see as much as the dogs of

Bali.

But we're getting ahead of ourselves.

The Indonesian government was trying to formalize property rights.

Others have tried to abolish them altogether.

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