The Illusory Promise of the Rule of Law

The Illusory Promise of the Rule of Law

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In this chapter I argue that the seemingly universal advocacy of the rule of law as an instrument for economic development is premised on a mistaken understanding of both law and its relationship to economic development. Rule of law advocates too often treat formal legal institutions as the only means by which developing societies may resolve disputes and regulate markets efficiently without the corruption and political intervention that have crippled economic growth in many parts of the developing world. In doing so, they fail to recognize that a successful legal system plays a deeply political role in its society and is dependent on particular political conditions to be effective. They assume that formal legal institutions are necessary elements for economic growth without realizing that there is little empirical evidence showing that such institutions and doctrines have contributed to economic growth in any way that can be generalized and applied to developing countries today. Mainstream legal reformers observe the fact that developed countries invariably have some form of the rule of law and inductively conclude that the rule of law must have contributed to development. It is more likely that an effective formal legal system is a desirable result of economic and political development, rather than its cause. Nonetheless, the rule of law retains a strong allure for those interested in development, both the aspiring countries and well-intentioned development “practitioners.” It is difficult to find anyone, whether in government, foundations, corporations, or universities, who does not favor encouraging the rule of law in virtually every country and society. The rule of law appeals to two powerful strains in contemporary intellectual and political thought. First, it speaks to the desire for universal truths in a global world. It simplifies complex realities by transforming social and political behavior into legal categories, and it promises to make mutually comprehensible the processes and practices of societies as different as those of Nigeria and Nebraska. Second, the rule of law appeals to our mistrust of politics and political action. It promises order without bureaucracy; governance without government; social choice without politics. Just as the invisible hand of the market produces wealth without intentional human agency, the black box of legal reasoning resolves social and economic disputes without moral judgment or political bias. In an age when politics and social engineering are reviled as wasteful and corrupt, the rule of law presents itself as the perfect complement for a free-market based view of development, offering to fix whatever problems the market fails to fix on its own. At times, it seems that any issue, no matter how far removed from what we normally think of as the province of law, can be addressed profitably via legal reforms. Within months after September 11, 2001, and weeks after America's entrance into Kabul, American observers were calling on the Bush administration to focus on the rule of law. The Baltimore Sun editorialized in April 2002 that “Establishing the rule of law... must be the first priority in Afghanistan. Enduring stability and security can only be achieved under a widely accepted and viable legal and regulatory framework.” Michael Ignatieff agreed, arguing in the New York Times that “helping the Afghans to rewrite the criminal and civil code and train a new generation of lawyers, prosecutors, and criminal investigators” was a necessary first step in Afghan reconstruction and a prerequisite to economic recovery. Raj Bhala, a law professor at George Washington University, argued that “There has to be a ‘rule of law’ culture in place” for reconstruction to succeed, and estimated that an effective legal system could be operational within three years. The idea that training judges or rewriting laws could significantly help reverse the legacies of twenty-five years of civil war, religious zealotry, and political disintegration in the same amount of time that it takes an American law student to become a lawyer is perhaps the most bizarre example of exaggerated hopes for the rule of law, but it is only one of many. Senator Joseph Biden, former chair of the Senate Foreign Relations Committee, has identified the failure of the Chinese to develop the rule of law as “the one thing” that could disrupt U.S.-Chinese relations, while the U.S. government, the Ford Foundation, and others have launched an expensive campaign to engender the rule of law in China. Similarly, a major part of America's effort to help sub-Saharan Africa has been the African Growth Opportunities Act of 2001 ('”AGOA”), which conditions trade liberalization for African exports on a showing that individual countries are establishing the rule of law. While examples are ubiquitous, the message remains the same: appropriate legal institutions have become a core component of any strategy to overcome the poverty, ethnic strife, corruption, economic decline, and political oppression that have plagued parts of the developing world for decades. Such a heavy reliance on legal reform to accomplish political and economic goals is not harmless or risk free. While it is easiest to attack the expense of hiring legal consultants, flying them to exotic locales, and housing them in the proverbial five star hotels, this is not where the real danger lies. Although this cost is not de minimus, neither is it huge in the overall scheme of foreign assistance, and many programs incrementally improve professional competence. Even failed programs may build intellectual and personal bridges that remain beneficial after the fact. Of more concern is the likelihood that Western mischaracterization of the appropriate roles of law will be accepted by developing countries, thus leading to misallocation of domestic effort and attention, and perhaps most important, eventually to deep disillusionment with the potential of law. When the revision of the criminal code does not prevent warlords from creating havoc in Afghanistan and the training of Chinese judges by American law professors does not prevent the detention of political dissidents—or, perversely, enables judges to provide plausible legal reasons for their detention—political leaders on all sides may turn away from law completely and miss the modest role that law can play in political and economic development. This chapter proceeds as follows. In part 1, I distill from the myriad uses of the term “rule of law” two versions that are most relevant and explain why neither is very useful to those interested in economic development. I explain that legal reformers have chosen a narrowly technical and highly formalistic definition of law that denies its political nature and raises false hopes of achieving political goals without the messiness of politics. In part 2, I review the role of law in economic and social development, in the United States and Japan. I argue that law has not played the role expected of it in these cases. I do not deny that law and legal institutions have been important in these countries. Rather, I argue that neither country can provide empirical justification for the types of legal models now being advocated as necessary for economic development in contemporary developing countries. Part 2 ends with the assertion that rule of law advocacy as presently practiced raises false hopes for developing countries and diverts the attention of the development community away from more productive approaches both to the creation of effective legal systems and to development itself In part 3 I attempt to explain why the rule of law retains such a strong hold over the imaginations of contemporary policymakers despite its poor record in practice.

Source Publication

Human Rights with Modesty: The Problem of Universalism

Source Editors/Authors

András Sajó

Publication Date

2004

The Illusory Promise of the Rule of Law

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