Rule of Law Reform and Development

Rule of Law Reform and Development

Charting the Fragile Path of Progress

Michael J. Trebilcock and Ronald J. Daniels

This important book addresses a number of key issues regarding the relationship between the rule of law and development. It presents a deep and insightful inquiry into the current orthodoxy that the rule of law is the panacea for the world’s problems. The authors chart the precarious progress of law reforms both in overall terms and in specific policy areas such as the judiciary, the police, tax administration and access to justice, among others. They accept that the rule of law is necessarily tied to the success of development, although they propose a set of procedural values to enlighten this institutional approach. The authors also recognize that states face difficulties in implementing this institutional structures and identify the probable impediments, before proposing a rethink of law reform strategies and offering some conclusions about the role of the international community in the rule of law reform.

Chapter 9: Professional Regulation

Michael J. Trebilcock and Ronald J. Daniels

Subjects: development studies, development economics, law and development, economics and finance, development economics, law and economics, law - academic, law and development, law and economics


I. Normative Benchmarks A. The Role of Professional Regulation in Developing Countries Through regulation, governments have power to articulate norms to which legal professionals must adhere and to establish mechanisms to ensure such adherence. In so doing, however, governments limit the freedom of both individuals and organizations. Thus, regulation must be justified on principled grounds. The most important justification for regulatory intervention with respect to the legal profession is to correct market failure arising from the information asymmetries between legal professionals and their clients. While some clients such as large business will often have few information problems, an imbalance exists in many other cases due to the specialized knowledge required on the part of the professional. Given this knowledge imbalance, legal professionals generally act as agents for their clients, acting on their behalf in making informed decisions about the purchase of services. Such a relationship can be problematic because lawyers will often have a financial interest in advising their clients to purchase services from them or members of their firm. The knowledge imbalance also makes it difficult for clients to judge the value of legal services offered and supplied. Trebilcock, Tuohy and Wolfson find that informational problems in the legal market may be serious, and in the absence of a well-functioning professional agency relationship, market failure may result. They therefore find a prima facie case for regulatory intervention to the extent necessary to establish, maintain and monitor such agency relationships. Another, although less commonly cited, ground for regulatory intervention arises...

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