Institutional Determinants of Development
Chapter 2: The Rule of Law and Development: In Search of the Holy Grail
2. I. The rule of law and development: in search of the Holy Grail INTRODUCTION Recent empirical research on the relationship between the nature and quality of a country’s institutions and development outcomes purports to demonstrate, inter alia, that improvements in the rule of law are likely to have dramatic impacts on development outcomes. For example, as noted in Chapter 1, according to the World Bank, an improvement in the rule of law by one standard deviation from the current levels in the Ukraine to those middling levels prevailing in South Africa would lead to a fourfold increase in per capita income in the long run.1 Similarly, according to Rodrik et al., an ‘increase in institutional quality’ (measured largely in terms of the strength of private property rights and the rule of law) ‘of one standard deviation, corresponding roughly to the difference between measured institutional quality in Bolivia and South Korea, produces a 2 log-points rise in per capita incomes, or a 6.4-fold difference’.2 Reflecting this view of the relationship between the rule of law and development, beginning in the 1990s there has been a massive surge in development assistance for law reform projects in developing and transition economies involving investments of many billions of dollars.3 There has also been a major resurgence of scholarly interest in the relationship between law and development. Proponents of an optimistic view of the relationship between the rule 1 Daniel Kaufmann, ‘Governance redux: the empirical challenge’, in Xavier Sala-i-Martin (ed.), The Global Competitiveness Report...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.