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  • The 2017 Global Award for Entrepreneurship Research goes to Hernando de Soto

    The Global Award for Entrepreneurship Research is the most prominent international award in entrepreneurship research with a price sum of EUR 100,000. De Soto’s analyses have had tremendous influence on policy throughout the world and were a main source of inspiration for the World Bank’s Doing Business program. Read More
  • 2017 Award Winner

    Hernando de Soto Peru  Institute for Liberty and Democracy For developing a new understanding of the institutions that underpin the informal economy as well as the role of property rights and entrepreneurship in converting the informal economy into the formal sector.   Read More
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LIMA – Colombian governments have been fighting the Revolutionary Armed Forces of Colombia (FARC) for the past 52 years, with no victory in sight. In early October, a razor-thin majority of voters rejected Colombian President Juan Manuel Santos’s proposed peace deal with the guerrillas.

Compare Colombia’s experience with that of Peru, which defeated its own guerrilla movement, the Shining Path, in less than a dozen years, from 1980 to 1992, with more than 85% popular support. Peru was able to achieve a lasting peace for two reasons.

First, the Peruvian government focused on creating rights for the poor people whom the guerrillas controlled, and it codified those rights in its 1991 agreements with the United States and the United Nations. By contrast, Santos, despite his good intentions, negotiated a peace plan that creates rights for the FARC.

Second, the Peruvian government won strong support from its citizens, because it never ceded its sovereign right as the country’s sole negotiator, nor did it negotiate in territory outside its borders. Santos, on the other hand, surrendered a degree of Colombian sovereignty by allowing negotiations with the FARC to be brokered by the unelected government of a foreign country with its own agenda: Cuba. Then he treated the guerrillas as equals by negotiating substantive matters with them.

These points are crucial, because it is not as though Peru’s government held a strong position against the Shining Path. In 1987, 60% of Peruvian territory was under martial law, and the Rand Corporation and the US Department of Defense predicted that the Shining Path would achieve total victory as early as 1992.

Peru developed a winning strategy when it realized not only that the Shining Path was extremely unpopular – as is the FARC in Colombia – but also that it did not actually control much territory. Rather, the Shining Path had succeeded in creating and operating out of impregnable strongholds in key areas where its members were indistinguishable from the local population, and where the local population was unwilling to report guerrillas to the authorities.By 1990, Peru had finally figured out that the reason poor farmers and miners were unwilling to identify guerrillas in their communities was because the Shining Path protected their rights. These rights, documented in 182 informal ledgers found mainly in the war-torn areas of Ayacucho, Cusco, Apurímac, Junín, San Martín, and Huánuco, designated to certain community members rulemaking authority over private property, investments, lending, and so forth.

Read the full article on Project Syndicate's website

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