That sounds like the conclusion from the book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, by Hernando de Soto (2000).

That sounds like the conclusion from the book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, by Hernando de Soto (2000). In his research he found that the legal system around property was very ineffective for poor people and many developing countries. They followed real life cases trying to bring properties/businesses from the informal sector to being fully registered and taxed. It was often a many year process and expensive. Owners would also have preferred to pay taxed when getting access to fully legal status, access to banking and capital markets an important one. Findings where from places like Peru, Egypt, Philippines (if memory serves me), and contrasted with places like US, Germany, England, Sweden, and Japan. The latter mostly had a well structured, democratic system of property law and registries available to everyone, not just the wealthy or powerful. Edit: Another key element was to open a process to convert squatted land into legal property. Many times formal land ownership was not conforming to lived reality, and some legal title nobody was interested in any longer was blocking legalization of actual use. US homesteading regulations are one example of how that was done, but all western countries mentioned earlier have or had equivalent processes.