In this Institute of Economic Affairs podcast, IEA Head of Media Reem Ibrahim interviews Elena Panisset, an institutional economist, former World Bank advisor, and founder of Thought for Action. The conversation explores why Latin American economies struggle despite having intelligent leaders and educated populations, examining the critical role of property rights, trust, and institutional reform in economic development. Elena draws on her extensive experience working with Peru, Brazil, Venezuela, and Panama to explain how bureaucratic complexity drives people into the informal economy.
Elena explains how excessive regulation and bureaucratic bottlenecks create impossible barriers for ordinary citizens trying to participate in the formal economy. From taking a year to buy a second-hand car to over two years to get a divorce, she illustrates how government complexity forces 70% of populations into informal markets where they cannot prove ownership, access credit, or reach their entrepreneurial potential. The discussion examines why capable individuals thrive abroad but struggle in their home countries, identifying the absence of secure property rights and continuous trust as the fundamental problem holding back development.
The interview concludes with Elena’s vision for formalising informal economies through simplified regulations and clear property rights frameworks. She argues that without the ability to prove ownership and existence, free markets cannot function properly and entrepreneurship remains stifled. Elena emphasises that reducing bureaucracy and establishing transparent property rights systems are essential for countries to unlock their economic potential and allow citizens the freedom to flourish.
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