Chapter 5: Building the rule of law with an economic focus
There is no way a market system can work efficiently in the absence of clear, enforceable laws regarding property and contractual rights and obligations. (Shihata 1991b, p. 228) [E]stablishing the rule of law is a long-term project which no-one knows how to accomplish. Meanwhile, recent experience confirms that explosive economic progress can occur in the absence of the rule of law. (Tamanaha 2011, p. 245) [P]roof that economic growth and stronger law can go hand in hand does not prove that law reform can actually cause economic growth in the first place. (Dam 2006, p. 231) Having examined the rhetoric and practice of the rule of law from the perspective of law and order, I now move to look at it from the perspective of economic development, not least as the latter is an often-posited reason for focusing on the rule of law as a developmental priority. While I sometimes draw on material that would be broadly included under the rubric of the new institutional economics (Nye 2008) in this chapter, I do not present the relationship between law and economics in the same manner. Rather than focusing on transaction costs, or considering primarily property rights, I am more concerned to understand both the rhetorical link made between law and development (widely promulgated by the World Bank), and a wider range of intersections between economic behaviour(s) and legal aspects of development.
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