Rule of Law & Development Book Released

Michael Trebilcock (Univ. of Toronto) and Ronald Daniels (Penn Law) recently released a new book on the rule of law and its role in economic development. The book, called "Rule Of Law Reform And Development: Charting the Fragile Path of Progress", is an excellent practitioner's guide to the history of rule of law and it's impact on development (from studies comparing common law and civil law jurisdictions to more recent research by Kenneth Dam and others).

The book is broken down in chapters based upon various legal institutions, such as the judiciary, the police, and tax administration, and also devotes some time to a review of legal education and professional regulationo in development, much like the recent text by Trubek and Santos ("The New Law and Economic Development) addressed at length. The final chapter focuses on how we might reconceptualize the approach to integrating rule of law into development policy by analyzing its effectiveness as a policy tool. It is worth a good read and perhaps integration into the classroom.

Kevin Fandl

Back from Bogotá

I just returned from the Law and Development conference sponsored by Harvard University law school and hosted by the Univerisdad de los Andes in Bogotá, Colombia. David Kennedy chaired the conference and an amazing contingent of speakers provided presentations on topics ranging from trade law to family law, from legal theory to land reform. Presenters came from around the world, most with some Harvard law connection, and convered issues in Latin America, Eastern Europe, and the U.S.

Most significantly, the speakers all appeared to express some inclination that we are at a crucial moment in the law and development field. This once ripe academic area has been sidestepped in favor of globalization and free market reform models for the past two decades, but as developing countries continue to experience low growth, expanding poverty, and growing gaps between rich and poor, both academics and practitioners are breathing new life into the movement. David Kennedy wrapped up the conference with a wonderful summary of the presentations, making it clear that we are on the cusp of a rejuvenated movement that may have a substantial impact on development in the next few years. I will post his comments here when (if) he publishes them.

Kevin Fandl

Labor Regulations and the U.S.-Colombia FTA

There has been a great deal of discussion over the inclusion of labor protections in the recently negotiated U.S.-Colombia Free Trade Agreement. Presidential candidates and Congressional representatives have argued that the agreement should not go forward without the inclusion of provisions for labor union organizing, minimum wages, and other worker protections. Colombia is balking at this post-hoc revisioning of the agreement that the parties negotiated and concluded without such provisions.

Should Colombia accept more stringent labor provisions in their FTA with the United States? On the one hand, it would help existing labor unions and formal workers to secure more beneficial treatment under the law. Yet on the other, with the significant number of unemployed and informally (i.e., without labor law protections) employed workers in Colombia already, more rigid labor laws could reduce the firm demand for additional workers. If a firm today can hire someone formally more cheaply and with less social security benefits, adding more compliance requirements may push them to lower their demand for formal workers and pursue the vast quantities of available informal labor, which has no protections at all. Thus, the result of pushing for more labor protections for Colombian workers could actually result in the provision of less effective protection.

Informal Legal Institutions

Rule of law efforts in developing countries have had little success in achieving their goals of legal reform for the benefit of the majority. A new article by Kevin Davis and Michael Trebilcock provides an excellent summary review of the literature on point and concludes that, while we don't know which legal institutions are necessary for economic growth, we know that they are necessary in some form.

I just uploaded my latest working paper addressing one type of legal institution, informal legal mechanisms. It considers the contribution made by informal dispute resolution, contract enforcement, labor regulation and property titling, carried out largely in the informal economy in developing countries. The article is available here: http://ssrn.com/abstract=1144643.