17 Feb The Rule of Law as a Condition of Development?
A proposition at the center of much international development work in the past decade or more has been the importance of institutions – whether one talks about “good governance” or the “rule of law” or other terms referring to institutions of governance in a society that permit stability across time. The claim has always seemed to engage the happy coincidence – rather than tradeoff – between morality and efficiency. A society increases its wealth by having available to it institutions of good governance, starting with lowered levels of corruption, greater public accountability of institutions, and perhaps running all the way over to accountability through specifically democratic institutions.
One problem, of course, is that China seems to defy this model, or at least a democratic version of it. Undemocratic, authoritarian, corrupt, and yet somehow maintaining sufficient coherency to achieve economic growth of a breathtaking kind. It is a model of growth and, more importantly perhaps, legitimacy of an internal kind that has enormous appeal many other places in the world where regime leaders have no particular desire to be democratically accountable or to promote the rule of law, either. The ability to point to an authoritarian model of growth that is not based merely on resource extraction is enticing to many as a new model of internal growth and legitimacy – and one of the many effects is to increase China’s appeal as a leader among nations in the world as an alternative to the US on that very basis.
It is also quite true that the story of China’s success is still quite new. Americans in particular are prone to ignore the weaknesses in the Chinese social economy, including its demographics and the difficulties of industrial policy. It is a bit premature to count the outcomes of the Chinese explosion in growth as though it were history a century old and we could look to assess it as though it were the first or second world wars. Nonetheless, China’s economic story of the past two decades or so raises important questions as to the role of the rule of law and institutions in economic growth.
So I’m pleased to say that I will be chairing a panel tomorrow, Friday, at UVA on East Asia and the rule of law in economic growth, at the annual symposium of the JB Moore Society, the international law society at the law school. I know very little about East Asia, but I know a fair amount about development, and the panelists – I’m merely moderating – are all experts. The panelists are Nicholas Kissas of US AID, John Ohnesorge at University of Wisconsin Law School, and Katherine Southwick of the ABA’s Rule of Law Initiative.
(This is the 60th anniversary of the JB Moore Society at UVA, and the overall program is on the rule of law. It has a great lineup for the other two panels as well – ASIL’s Elizabeth Andersen, Freedom House’s Lisa Davis, Wash U’s Brian Tamanaha, UVA’s Dick Howard, USIP’s Collete Rausch, the JAG School’s John Reese, UVA’s Thomas Nachbar, and UVA’s John Setear.)
China is one model but of course if you are looking for longer term visions you would also look at Japan, Korea, Taiwan and Singapore. You could also compare India.
There may also be something going on which we might call differentiated rule of law. Commerce spaces are ones where the rules are complied with in terms of contractual obligations (leave aside IP). If contracts are complied with and enforceable, you can build a whole bunch of development on that.
Best,
Ben
A state that can command its economy can create remarkable growth by using the most efficient economy of its time as a template and taking out the inefficiencies. Stalin did it; Hitler did it; Japan did it; China is doing it.
The problem is that an economy so created is brittle; it has no institutional capacity to evolve.
In the short run, democracies look chaotic and totalitarian states look stable. But the very things that make democracies seem chaotic in the short run make them stable in the long run; and vice versa for totalitarian states.
Similarly for economies: The things that make free economies look chaotic in the short run are the very things that make them stable in the long run; the things that make directed economies stable in the short run make them brittle in the long run.
Interesting thoughts, International Lawyer. But I wonder if that’s really true? Consider that China has existed as a totalitarian state in one form or another for roughly 3+ thousand years longer than the US has existed as a nation. I have to wonder exactly how long that “long run” is. Really, history seems like just a long journey in exchanges of power. Whomever holds that power “wins” whatever the ideology.
Liz: “One form or another” is exactly my point; totalitarian states fail catastrophically. But more generally: “China has existed as a totalitarian state in one form or another for roughly 3+ thousand years longer than the US has existed as a nation.” No, it hasn’t. China before Mao was no totalitarian state; it was an anarchic collection of warlords. It’s an example of Mancur Olson’s Roving Bandit and Stationary Bandit. The Party became a Stationary Bandit by putting down the Roving Bandits. It took thirty years, but the Stationary Bandit realized that that it could extract more tribute by providing people with institutions rather than Cultural Revolutions. To Mr Anderson’s basic point, China has provided institutions, and those institutions are a major source of its growth. Mr Anderson (with all due respect) is probably too young to remember the Cultural Revolution, but I’m not. It doesn’t take much in the way of institutions to improve on that. I did projects in China in the 1980s (and 90s and 00s), and the growth of institutions in China is remarkable. As Mr Davis points out (and, most profoundly, Professor Olson and Mr Hobbes pointed out) institutions need not be democratic — or… Read more »