Dead capital

Dead capital is an economic term related to property which is informally held, is not legally recognized, and cannot be exchanged for financial capital.^[1] The uncertainty of ownership decreases the value of the asset and/or the ability to lend or borrow against it.^[2] These lost forms of value are dead capital.

The term dead capital was coined by Peruvian Economist Hernando de Soto Polar. De Soto estimated in 2015 that 5.3 billion of 7.3 billion people globally – over seventy percent of the world's population – hold dead capital that is worth US$ 9.3 trillion in assets.^[3] This dead capital owned by poor or middle-class people in emerging economies cannot be realized due to poor policies, ineffective procedures, or bureaucracy.^[3] If these assets in the informal sector were recognized and brought into the mainstream market economy, they could possibly become the key to fostering development.^[4]