Towards a System Dynamics Model of De Soto's Theory on Informal Economy

摘要

System Dynamics has been recognized as a powerful means to represent theories (Sterman 2000). The value rests not only in the capability of representing interconnected complex structures and simulating behaviors associated with them but also in its strength to communicate counterintuitive and novel ideas. This articles introduces the first phase of a novel project that aims to build a simulation model of the original theory of the Peruvian economist Hernando de Soto (2000). This theory seeks to explain why capitalism has succeeded in particular Western countries while at the same time it has failed in broad regions of the world, primarily in the former communist countries, Africa and Latin America. De Soto presents a very simple and at the same time counterintuitive idea in order to explain why broad regions of the world haven't been able to benefit from capitalism. In short, the core of the theory suggests that the main reason is the inability of such regions to produce capital - in spite of being wealthy regions - because of the lack of representational processes that would make assets visible and productive. According to de Soto (2000) this explains the underdevelopment of many Third World countries and former communist nations.