Case Studies

From the Streets to Markets: Formalization of Street Vendors in Metropolitan Lima

By Gustavo Marini, Kim Eric Bettcher, Martin Friedl

Reforms of the 1980s and 1990s altered the historical pattern of informal street vending in Lima, Peru, to create superior commercial opportunities for poor vendors. Hernando de Soto’s Institute for Liberty and Democracy (ILD) identified and promoted the crucial elements of growth that had eluded policymakers and businesspeople for decades: property rights, low barriers to market entry, cost-effective regulation, and a democratic policy process.

Developing the Private Sector through Business Associations

By Mark T. McCord

In October 2003, when the Center for International Private Enterprise (CIPE) opened its office in Kabul, Afghanistan, strong and sustainable business associations were in short supply. Establishing an effective, trusted business network was crucial to private sector development. At the time, apart from the Afghan-American Chamber of Commerce (AACC), which was headquartered in Washington, D.C.

Lowering Barriers to Participation in the Formal Economy

By Nafisul Islam

In recent decades, the percentage of Venezuela’s workforce employed in the informal sector has been steadily growing, and by 2003 more people were employed in the informal sector than in the formal sector. This phenomenon – informality – can severely undermine a country’s economic and political progress and stability through weak rule of law and ambiguous property rights. Informal entrepreneurs cannot access the benefits associated with formal businesses, such as bank credit and legal recognition of their businesses.

Making the “Extralegal” Legal

By Nafisul Islam

In the early 1980s, Hernando de Soto, a successful businessman and economist, left Europe to visit his native Peru. During his trip, he was struck by the disparity between the vibrant entrepreneurial spirit of the people and their desperate poverty. To find the reason for this gap between motivation and result, he decided to open a small garment factory in Lima. His first step was to hire four university students who would complete the bureaucratic procedures necessary to obtain a business license.

Promoting a Business Community through Radio

By Sariah Toze

In the decade since the overthrow of the authoritarian Marxist Derg Regime, Ethiopia’s government has implemented an economic reform program designed to stabilize the country’s finances, promote private sector participation in the economy, and attract foreign investment. Yet decades of poverty, civil conflict, highly centralized authority, and unfamiliarity with democratic concepts are not easily overcome. Ethiopia’s transition to democracy depends on strengthening alternative sources of information and broadening political debate.

Scoring Corporate Governance: A Framework for Implementation

The Asian financial crisis of 1997 underscored the need for governance reform not only in the business community but also in national development finance institutions (DFIs). DFIs are established by governments to provide long-term financing and technical assistance to sectors of the economy not served by other providers of capital. Unlike regular commercial banks, development banks provide training and management expertise in addition to financial assistance. They can therefore play a central role in advancing corporate governance reforms.

Institutionalizing Democratic Reform

The Philippines has struggled in the last few decades to establish a democracy capable of addressing the needs of all levels of society. Reforms must strengthen the institutions of government and address inadequacies in business and social sectors in order to build a more representative public governance system. In the words of Dr.

Promoting Government Accountability and Social Participation

In the mid-1990s, most private businesspeople in Georgia felt that they were caught in a “no-man’s land” between the command economy and a market economy. The Georgian Parliament passed 700 new pieces of legislation over five years to help create the legal framework for a market economy. Yet the legal transition was hampered by a lack of mechanisms for effective implementation, administrative lethargy, and contradictions among the different laws.

Building a Coalition Against Corruption

By Nafisul Islam

Bulgaria’s transition to democracy and a market economy in the 1990s was severely constrained by corruption. As state resources were privatized, institutional weaknesses left openings for corruption and allowed the influence of former communist nomenklatura and organized crime. Corruption reached every sphere of life and weakened public confidence in democracy.

Sustaining Policy Reform

By Cristina Grecu

Throughout Romania’s first decade of political and economic transition, the government paid little attention to the needs of the private sector. Although private enterprise became legal in 1990, corruption, weak market institutions, and a lack of information hindered growth. Because the government favored established interests, individual entrepreneurs struggled to keep up with state-owned competitors and had little means of communicating with policy makers, let alone influencing them.

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