Location: The Heritage Foundation's Allison Auditorium

Over the past century, the West has gradually developed the structures that allow people to build profitable businesses bolstered by the legally secure contracts that are critical for long-term plans and investments. Based on his groundbreaking research, renowned economist Hernando de Soto concludes that disorder and political instability, growing terrorist and criminal networks, and grinding poverty in many non-Western countries are due in large part to the fact that many of the world's most fragile and dangerous states lack critical legal tools required to process information, identify opportunities, reduce risks, and bring people and assets together. The lack of a fair and reliable legal framework in many countries prevents prospective entrepreneurs from using shares to raise capital, establish business identities empowered to contract with other parties, or partition their assets to limit their liabilities for managing risk. These legal foundations are generally taken for granted in the West and are only dreamed of by Third World entrepreneurs. The result is that markets in most of the world do not work adequately and do not offer the rewards and employment required for people to benefit from globalization. It is this deficiency that permits violent and unscrupulous politicians and criminals to prosper, leading to instability, criminality, corruption, and poverty.

Mr. de Soto is currently President of the Institute for Liberty and Democracy (ILD) in Lima, Peru and the author of the international bestseller The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Most recently, Hernando de Soto was appointed by the Peruvian President Alan Garcia as his "personal representative" to create an "Internal Free Trade Agreement" and lead the effort to resolve the disconnect between globalization and those excluded from the benefits of a more interconnected world.