The Other Path: The Invisible Revolution in the Third World

Uses Lima, Peru, as a case study and describes in absorbing detail the surprising and revolutionary world of the so-called informals, black marketeers who work outside the law. 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, this book 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 this book is its political analysis. The author 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.