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The Other Path can fundamentally alter the way we perceive
the so-called underdeveloped countries of the Third World, and in particular how
their internal economies and political alliances actually function. The
Other Path uses Lima, Peru, as a case study and describes in absorbing detail
the surprising and revolutionary world of the so-called informals, black marketers
who work outside the law. These "informals" represent 60 percent of
the Peruvian economy; for example, 95 percent of the public transportation in
Lima is owned and operated by private companies. The reason for this underground
economy is the enormous complexity of Peru's legal machinery. Hundreds of new
regulations are passed each week and no private entrepreneur can hope to deal
with the bureaucracy. Through detailed field studies, The Other Path calculates
the enormous economic effects of laws regulating such diverse matters as housing
construction, the establishment of industries, public transport, and trade.
For many readers, however, the greatest contribution of The
Other Path is its political analysis. De Soto provides evidence to support
his theory that Latin America is nearing the end of a stage in its history similar
to the one experienced by European nations when mercantilist regimes dominated
the continent between the fifteenth and nineteenth centuries. He argues that Peru
is already undergoing a revolutionary and irreversible process of transformation.
Hernando de Soto is a Peruvian entrepreneur, born in Arequipa
in 1941. He completed his postgraduate studies at the Institut Universitaire des
Hautes Etudes in Geneva, Switzerland. He has worked as an economist for the General
Agreement on Tariffs and Trade (GATT) and as managing director of Peru's Central
Reserve Bank. He is currently president of the Instituto Libertad y Democracia
(ILD), director of several Peruvian companies, and a member of the United Nations
Committee for Development Planning. | 
