[DVaut1]

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But in empirical terms, the places where "natural property systems" exist in the present day are the places where "respect for the rule of law" was *so low* that the states that were there outright failed.

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This is somewhat misleading if not outright false. There are lots of places where the current world where the state hasn't failed but natural property systems are the dominant property rights regime -- they operate on their own local conventions, typically without state interference. These places are located in developing states that more or less ignore these regions and their economies. The states don't "fail" there because the state never and still doesn't have a presence. De Soto, after his near-decade long research, concluded that something in the neighborhood of 65-85% of housing is 'extralegal' (think squatter settlements and the like) in the developing world, and that the vast majority of retail markets and mass transportation in these regions also exist outside of the formal sector and sans state intervention. And keep in mind, most of these places exist within states, not "states that outright failed". Because these places lack norms and laws, people in these natural property regimes can't mortgage their house to raise money for a new venture, or govern and appraise property with agreed-upon rules that hold across neighborhoods, towns, or regions. All of the assets they have (which De Soto thinks are quite considerable) are hard, if not impossible to manage (a fact the West takes for granted and which De Soto credits to our vast network of legal infrastructure). Their property and assets lack fungibility and so lack a market value. Compare these natural property systems to most of the states in the West and it's not even close (as hmk concedes) who outperforms who.